Guest Blog: Can Your Company Have a Flint Water Crisis?
David B. Jaffe
The harm done to the residents of Flint from contaminated water will be hard to remedy. The state and federal government agencies and people involved in the decision to deliver that water — even with evidence that it was dangerous — won't suffer from the effects of lead poisoning, but they have created major problems for themselves. The flow of criticism of the EPA, Gov. Rick Snyder and his team, the Flint City Council, and the litigation, will not be easily stanched.
Unfortunately, disasters like the Flint water crisis also strike many businesses, including companies that are well run by well-intentioned people. Much has been written about the politics of the Flint water crisis; this article will focus on the business lessons to be learned.
Typically, these stories begin with an imperative from the top. Sometimes it's about adding functionality to a product, but usually, as in Flint, it's about cutting costs. In many companies, employees perceive a clear message from leadership that the initiative is essential and not to be blocked. The initiative is often implemented quickly without adequate study, while leaders dismiss or ignore information suggesting potential problems.
Flint rushed to disconnect from Detroit's water supply. In a company, it might be a
cost-cutting initiative that looks good on the surface, but once enacted, it damages your equipment, releases dangerous chemicals into the environment, or makes your product unsafe. Other initiatives can create the same effect. Sales might suggest contributions to favorite charities of influential officials. If you don't find out whether the contributions benefit the officials, you create an expensive Foreign Corrupt Practices Act problem.
These scenarios really happen in business, and in a stunning number of cases, create a debacle that hurts people, the bottom line of the company and the careers of those involved. For example, Enbridge employees ignored alarms before its 2010 oil spill into the Kalamazoo River. BP had a culture of resisting safety concerns before the Bridgewater Horizon explosion, also in 2010. Charitable contributions were part of Stryker's costly 2013 Foreign Corrupt Practices Act case.
Why does this happen, and how can you prevent it from happening to your company?
Don't just do something, stand there — and think.
Business emergencies require analysis that is both careful and candid. If you as the leader insist on immediate action without rigorous and intellectually honest study, you're sending a message that any action is sufficient — even if it causes more harm than good. Flint had never sourced water from the Flint River, yet the decision to do so was made quickly, without thinking through the risks or how to mitigate them. The leader must allow — and require — an analysis that challenges the initiative and the assumptions behind it.
Don't shoot messengers
When leadership puts out an imperative, it takes courage to challenge proposals, especially after senior leaders express support. Once implementation has begun, it takes even more courage to point out problems. Leaders' urgency, and their egos, can neutralize important information.
When leaders rush to try something new, they need information about potential problems quickly. Unfortunately, there's a natural tendency in organizations to defend the initiative and dismiss challenges. In Flint's case, people who questioned why the water was brown and smelly received "a persistent tone of scorn and derision."
To get information where it needs to go, you need a culture in which questions and challenges are accepted and encouraged. What happens in an organization when someone challenges a leader's initiative? If the company's culture brands this person as "negative," bad initiatives won't be challenged, even if the flaws are glaring. Unless challenges are made and considered objectively, the risk of a Flint-like failure is high.
Leadership requires courage
If it takes courage to challenge an important initiative, it takes as much courage for a leader to address the challenge openly and honestly. Leadership comes with a responsibility to be the person who makes sure that business decisions are sound, especially when demands of the board, stock analysts, or the CEO are loud. The consequences of failing to respond instantly may seem dire.
But the consequences of allowing a dangerous mistake to be made and to continue uncorrected are truly disastrous. Companies needs a culture in which important decisions get analysis, and challenges are not dismissed. Leaders need the courage, commitment, and skills to build and live that culture.
David Jaffe is the principal of Birmingham-based Jaffe Counsel PLC.