Take-Two Interactive publishes (through its Rockstar Game subsidiary) the violent yet exceedingly popular videogame Grand Theft Auto: San Andreas. The videogame made national headlines recently when an avid gamer learned how to unlock sexually explicit scenes with a prostitute. Instead of apologizing, the company blamed the programmers for uncovering the scene and even game buyers (its customers) for downloading and installing the unlock code.

Because of its initial stupidity of including the scene coupled with its refusal to apologize, the company is about to play a new game called Take-Two Interactive: Corporate Crisis. Level One is a Federal Trade Commission inquiry about company advertising policies; Level Two, a Congressional investigation; and Level Three, a class-action lawsuit by angry parents. Even if the company wins all three levels, it has pretty much guaranteed the entire gaming industry will have additional oversight and scrutiny.

Thanks for playing.

Back to top

During a crisis, is it better to win in the court of law or the court of public opinion? The answer depends upon perception of guilt -- how strongly people believe that you or your company is responsible for the crisis.

When the perception of guilt is low, executives and companies have a good chance of winning in the court of law and the court of public opinion. Pepsi and Wendy's have both experienced hoaxes designed to defraud. In both cases, perceptions of guilt were low, the companies demonstrated their cases effectively, and, ultimately, the companies prevailed.

A high perception of guilt is another matter. We are quick to form perceptions of guilt yet are, for the most part, forgiving and believers in second chances. If the perception of guilt is overwhelming, it is often best to admit wrongdoing, accept the ramifications -- which are often much less in the initial stages -- and move on. People will forgive and forget. Hugh Grant confessing on the Tonight Show two days after his arrest for solicitation immediately comes to mind.

By contrast, we tend to be ruthless and unforgiving when the perception of guilt is high and the accused party attempts to rationalize the situation, blame a third party, or fails to accept responsibility.

Ego is often the sticking point. The will to win at all costs comes with a price, most often for people tangential to the crisis, such as employees and stakeholders. Arthur Andersen was ultimately acquitted in the Enron case, while the company's employees paid the price as the company folded. Martha Stewart got six months in jail, while shareholders of Martha Stewart Omnimedia were pummeled during the two years of her court case.

The perception of guilt is an external phenomenon. Winning in the court of law and the court of public opinion requires putting aside ego and having trusted objective counselors who will provide honest feedback about the external perception of guilt. Only then can the leader make the choice about where and how hard to fight.

Back to top

Next time you need a good icebreaking exercise, try this puzzle. How many squares do you see?

 

1	2	3	4
5	6	7	8
9	10	11	12
13	14	15	16

Scroll to the bottom for the answer.

Back to top

Morgan Stanley recently hired John Mack as chairman and CEO to reverse the company's fortunes, which have lagged behind competitors for several years. He has managed to make headlines several times in his first month, though not necessarily the kind he probably wanted.

First, Mack negotiated a compensation package with specific benchmarks. Unfortunately, those benchmarks had nothing to do with Morgan Stanley performance. Instead, the primary benchmark was the average CEO salary at five competitors (all of whom have outperformed Morgan Stanley) or $25 million, whichever is greater. Uproar ensued and forced Mack to accept a package tied to company performance measures.

Second, Mack began hefty cost-cutting by announcing the elimination of thousands of broker jobs, cuts in training, and a reduction in new hires. The unit has underperformed its competition, and Mack is rightly targeting underperforming brokers. However, Mack had previously said he would not make any rash decisions in the first few months on the job. The move forced him to go out of his way to reassure analysts that brokerage morale was still good and that top performers would not be jumping ship.

Building credibility during the first 100 days is the most important objective for any CEO hired to turn around a company. Without it, employees will cast a skeptical eye on every new idea and every new plan. John Mack may have earned short-term credibility in the eyes of Wall Street analysts but sacrificed long-term credibility with employees whom he is counting on to deliver results.

Back to top

http://www.marumushi.com/apps/newsmap/newsmap.cfm

News moves at warp speed. Thankfully, newsmap is there to keep us current. This online application visually shows which stories are getting the most coverage in seven different categories: world, nation, business, technology, sports, entertainment, and health. Each major story is represented with a box that grows in size depending upon the amount of story coverage at the time on Google News, a news aggregator service that draws from thousands of websites. Newsmap also archives the previous week's news in six-hour increments.

(Make sure to have the latest Flash Player installed on your computer -- http://www.macromedia.com/go/getflashplayer)

Back to top

1ndispensable examines how successful companies have made their products or services indispensable to their customers and recommends strategies for businesses that want to achieve the same success.

Using case studies and personal experience, Calloway pinpoints the five drivers in indispensable businesses that lead to a 90 percent success rate in the marketplace.

1. Create and sustain momentum -- Indispensable companies constantly look for new ideas that will appeal to target audiences. The environmentally conscious grocery store Wild Oats Natural Marketplace took its environmental focus farther by offering new containers made from corn. This seemingly small innovation made Wild Oats huge in the eyes of the environmentally conscious grocery shopper.
2. Develop habitual dependability -- Consistency of performance and dependability are hallmarks of indispensable companies. Calloway uses a cashier from his local Publix store to illustrate this point. The cashier is consistent (even if many of his coworkers aren't), personable, helpful, and professional -- all of which have turned Publix into Calloway's grocery store of choice.
3. Maintain a continuous connection -- Indispensable companies maintain contact with customers on an ongoing basis to strengthen relationships without ever taking clients for granted. Calloway's car dealer provided this continuous connection through the service department and all of the free maintenance work they did on both of his cars. As a result, the dealership is his favorite.
4. Have big picture outcomes -- Indispensable services focus on the overall customer experience and are aligned to customer's goals. Pinnacle Financial Partners provides client accessibility to all executive management and offers a courier deposit pick-up system to help clients fulfill their financial needs in a timely manner.
5. Engage, enchant, and enthrall -- Customers have so many choices that indispensable companies understand that they must engage, enchant, and enthrall the customers in order to keep them in competitive markets. Target has built a loyal following and separated itself from the pack by offering items that are hip and fashionable at competitive prices. Customers truly believe when the company says "Expect more. Pay less."

1ndispensable clearly demonstrates the importance of thinking of the customer every step of the way.

Back to top

Answer to icebreaker puzzle: 30 squares. This exercise is useful in preparing people to look beyond the obvious.