A ‘must read’ for the C-suite.
By Dirk Verburg
Ever since the industrial revolution, large corporations have played an important role in our society. Due to the globalization in the past decades, their influence is continuously increasing.
At the same time it seems that the number of scandals caused by these large organizations is growing as well. Established names, such as Barclays, Siemens, Wells Fargo, Ahold, VW, BP, Shell, Worldcomm, Tyco, Enron, Olympus, Arthur Anderson, E&Y, the BBC and many others, have all experienced scandals, and some no longer exist as a result.
What complicates this situation even is that governments and other institutions (e.g. regulators and ‘independent’ accounting firms) do not seem to be able to control, or at least monitor, the way companies in the private sector are operating. One of the most striking examples of this is the subprime crisis which started in 2007 and almost brought the global financial system to a halt.
Even worse, the ‘Panama papers’ provide clear evidence that the behaviour of a number of politicians is closely aligned with similar dubious practices in the private sector.
All in all, this has led to a climate where the general public has started to view experiences corporate scandals as normal. This is demonstrated by the fact that Fortune each year publishes a list of the biggest corporate scandals that happened in that year. Corporate scandals seem to become more a matter of ‘who’ than ‘if’. This is threatening our society as a whole, because there is only one step between experiencing the behaviour of others as normal, and starting to adopt these behaviours ourselves.
Matt Nixon describes organizations that are affected by scandals as ‘Pariahs’ in the Greek sense of the word. In his book he systematically analyses the root causes of scandals, and provides a framework to help companies to prevent them, and to deal with them in an effective manner once they occurred.
Central to the book is the life cycle of ‘Pariah’ organizations. The different stages in the life cycle of Pariahs are:
- Genesis – Beginning
- Hubris – Arrogant overconfidence
- Crisis – Point of failure
- Nemesis – Downfall
- Metamorphosis – Change
- Catharsis – Cleansing and Redemption
The book describes each of these life cycle stages in detail, and comes with specific recommendations for organizations that find themselves at a particular stage.
What makes the book extremely powerful is the persuasive logic of the author, his ability to refrain from oversimplified solutions and the number of examples of well known organizations and scandals (both in the private, as well as in the public sector) used throughout the book.
Despite the fact that organizations should do all they can to prevent (reputational) crises, no sizeable organization is immune to them, no matter how good their compliance frameworks are. For this reason I full-heartedly recommend this book to all members of the ‘C-suite’, as well as to their communication and HR experts.
Originally published May 17, 2017 as a review on Amazon.co.uk
Title: Pariahs, Hubris, Reputation and Organizational crises
Author: Matt Nixon
Publisher: Libri Publishing (15 Mar. 2016)