I could not help but feel a sense of sympathy for Walmart’s communications team (IR, corporate comms, PR, internal comms) when reading this past Sunday’s front-cover New York Times story about the company’s bribery scandal (my colleague Jen highlighted the communication implications on Unboxed Thoughts yesterday). While I possess no inside knowledge beyond what the story outlined, I was repeatedly struck by what indicated to me an incident where top-level company officials thought they knew best and proceeded without counsel from a broader circle of advisors. As a communications practitioner, we have all been there. Company officials will often focus on only the legal consequences and not the impact on other constituents. The mindset is that legal trumps all, except when it’s only one facet of an issue like this one. In today’s world, communication is not a “siloed” discipline. Corporate governance is not the sole purview of legal. This responsibility now also falls to IR. But financial impact is no longer limited to IR and now trickles down to PR. My point is that communications is a chain; it’s all interwoven and as the old adage goes, you are only as strong as your weakest link. If you keep one constituency in the dark, you can bet that’s where the trouble will arise.
As I read the in-depth and castigating article, I kept wondering how much of this could have been avoided had the communications team been involved from the very beginning when this scandal was still an internal issue. Perhaps nothing,but perhaps everything. When people are engaging in potential wrong-doing, no one stops to think what happens if we get caught. But when you have the internal resources of those who can help define the situation and potential outcomes, why wouldn’t you ask to hear them? Instead, what you have is a situation where senior management made the decision by themselves – ultimately the wrong decision from legal and communications perspectives – and left the mess, in part, to the communications team to handle. IR most likely spent Monday (and the rest of this week) trying to downplay the potential impact on future financial results – the stock got pounded yesterday – while the corporate communications team plays damage control, debating which members of the media they need to respond to and how. Somewhere in the mix employees are going to need to be communicated to as well.
The good news for Walmart is that they do possess the ability to rectify the situation and rebuild their reputation. It won’t happen overnight, but a focused campaign on highlighting how they are finally addressing this issue, while addressing their internal controls and other systems they are putting in place to avoid similar situations in the future, is a good way to start the process. Of course, if they don’t bring in all aspects of communications to participate, they won’t make any progress.