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Hacking into Leadership

The leadership lessons of the News of the World scandal

When leaders succumb to the temptation to look the other way, to deny blame, to blame others, or to scapegoat individuals in the short term, they and their entire organizations or constituencies end up paying a huge price over the longer term. James Murdoch is currently in the process of learning this lesson at News Corp. While this growing scandal has some unprecedented and unique aspects, it also reinforces lessons that many leaders have learned in the past: blaming low level employees for systemic malfeasance, being biased by personal relationships, and trying to take partial blame are strategies that backfire.

First of all, the question of whether the unethical behavior was the fault of a few "rogue" actors or was actually implicitly, or even explicitly, encouraged by the organization's leadership and culture is one that always arises after organizational malfeasance comes to light. While organizational leaders and others inside an organization are often tempted to blame wayward individuals, (according to the New York Times, News Corporation's James Murdoch said: "Wrongdoers turned a good newsroom bad") external commentators and critics usually cast a wider net of blame. People inside the organization often see bad behavior as the rare exception, while outsiders focus on bad behavior as being more common and normative. Great leaders take personal responsibility, and adopt the dictum that Harry Truman kept on his desk in a plaque that read "the buck stops here."

Secondly, the scandal reveals how important relationships are to how, and even if, blame gets assigned. Professional relationships inside of the organization may have caused leadership to look the other way in order to protect favored individuals. When he was CEO of General Electric, Jack Welch made it clear to members of his staff that regardless of how much personal affection he had for them, he would make unbiased decisions that were in the best interest of the business, even if it meant terminating them.

Finally, the scandal reflects how trying to take partial responsibility simply does not work. The New York Times quoted James Murdoch in apologizing for the phone hacking, as saying: that the company and the newspaper had "wrongly maintained that these issues were confined to one reporter." Murdoch might learn from the example of Andrew Grove, former CEO of Intel, who described how he and the semiconductor company he led were "in denial" in the early 90's when it was revealed that there was a flaw in the Pentium chip. In the face of an overwhelming negative public reaction when Grove and the company only took half-measures to resolve the crisis, Grove ultimately offered to give a full refund to any customer who wanted one. While Murdoch's decision to close the News of the World might be a decisive move to punish wrongdoing, critics perceive it as a long-planned business move that creates an opportunity for other publications in his media empire to publish on Sundays. Whether Murdoch will need to take additional responsibility and make additional moves to salvage his company and its reputation remains to be seen.