Primum non nocere
The whole issue of executive compensation is getting explosive again, fueled by the healthcare fight in the US.
The last round of executive compensation debate and media coverage focused on financial sector executives, essentially concentrating on the astronomical dollar amounts of their salaries. The story seemed to have lost its legs after the White House appointed a “Pay Czar” and the economy sprouted “green shoots.”
I’m not suggesting the highest paid hedge fund manager making $3.7 billion, and the next two managers taking home close to $3 billion each in 2007, does not look like excessive compensation. But, let’s face it – it’s not easy to imagine victims behind those mega numbers. That may change with Sick for Profit, a new campaign launched by Brave New Films’ Director Robert Greenwald last month.
What makes this new strategy more effective for the advocates of government-funded, single-payer healthcare insurance is the old, but valid PR adage: images unite, issues divide. Mr. Greenwald made a powerful, six-minute video juxtaposing images of the victims and salaries of CEOs in the health insurance industry. The video’s correlation between executive compensation based on profit and denial of claims for sick and dying patients is inescapable.
One patient was repeatedly denied payment for drugs she needed to stay alive, according to a quote from the video in the Huffington Post. “I tried to explain to them that if I do not have this, I will die. And the only response she gave me was, ‘OK.’”
Stephen J. Hemsley of UnitedHealth is one of the CEOs featured prominently in the video. He made $13.2 million in 2007, only 0.356% compared to the top-earning hedge fund manager in the same year. (Yes, that’s one third of a percent.) However, Mr. Hemsley did well with total value of unexercised stock options worth $744,232,068, according to the Sick for Profit website.
Gut-wrenching scenes of sick people, including babies, side by side with salaries paid to health insurance CEOs has made the mini-documentary a hit on YouTube, with more than 142,000 views. The Sick for Profit website got 15,419 visitors on August 10th alone.
The video and the campaign made me think of Peter Drucker’s chapter called Not Knowingly to Do Harm, in his book Management, Tasks, Responsibilities, Practices. “The first responsibility of a professional was spelled out clearly, twenty-five hundred years ago, in the Hippocratic oath of the Greek physician: Primum non nocere – ‘Above all, not knowingly to do harm,’” wrote the great management guru of functioning capitalism. This applies to any professional, including managers.
Mr. Drucker brings up another issue related to not knowingly to do harm. He cautioned about American managers’ proclivity for violating the rule with respect to:
- Executive Compensation
- Use of benefit plans to impose “golden fetters” on people in the company’s employ
- Their profit rhetoric
The chapter ends with a warning that “…as the physicians found out long ago, it is not an easy rule to live up to. Its very modesty and self-constraint make it the right rule for the ethics that managers need, the ethics of responsibility.”
Leadership Lessons from President Obama
Have you noticed how much our leadership values have changed since the economy tanked? President Obama’s visit to Canada yesterday clearly showed this change, demonstrated by the value of decency, authenticity and, yes, intelligence.
The growing pain of the current economic mess helps to leave behind leadership attributes of the previous era, which ranged from unadulterated greed, arrogance and stupidity on a grand scale. The new American president’s leadership style denotes a clear break with the past and a new era of leadership.
President Obama’s charisma helps, but charisma can only take you so far. Many leaders start with great expectations, and promises they cannot or fail to keep. One of the first challenges Mr. Obama had to overcome were unrealistic expectations of messianic proportions. His inauguration address was a great example of trying to manage high expectations.
The President knows how to get across his objective in a way that connects with his audience. “I came to Canada on my first trip as President to underscore the closeness and importance of the relationship between our two nations, and to reaffirm the commitment of the United States to work with friends and partners to meet the common challenges of our times,” Mr. Obama said. There is a lot of emotion in that statement but, to top it all, he said, “I love this country.”
His unscheduled stop at an Ottawa market to buy sweets and souvenirs for his daughters made the President look like a caring person. It was also the only occasion when he could reach out and shake hands of ordinary Canadians and they responded with love and enthusiasm. Caring is another critical attribute of the new leadership. As the unemployment lines continue to grow daily, it will likely be appreciated more than ever.
What was really interesting was the impact the short visit of only a few hours had on Americans back home. Reading responses to articles in Huffington Post, they ranged from people writing about tears in their eyes to feeling proud again to be Americans.
Now, to bring it back to executive communications, when was the last time your CEO’s speech brought tears to your employees’ eyes or made them proud to work for your company? What did you do to make them think that you really care about them? And, above all: when was the last time you said – in one sentence - what is it you want to do and how is it going to benefit your company?
Aux barricades!
This economic crisis is getting progressively worse. We’re reaching the equivalent of DEFCON 2 but there are only a few signs that businesses are ready for what this crisis is going to do to our society.
The point was driven home when I watched an eye-opening video on Huffington Post from MSNBC. Joe Scarborough, Pat Buchanan and Mike Barnicle interviewed Dr. Zbigniew Brzezinski about his new book he wrote with Brent Scowcroft, and David Ignatius – America and the World: Conversations on the Future of American Foreign Policy.
The possibility of class conflict in America is no longer a figment of imagination spread by the far left. If Pat Buchanan sees it coming, something has changed drastically. With millions and millions of unemployed “…there is this public awareness of the extraordinary wealth that has been transferred to a few individuals… at levels without historical precedence in America,” said Dr. Brzezinski. These individuals are, of course, a few business executives who decided to get or, sometimes, loot what they could, tarnishing everybody with the same accusations.
And yet, there is neither a sense of urgency nor an attempt on the part of executives to differentiate themselves from their tarnished brethren. A recent headline in The Times, “Bankers say sorry – but plead not guilty,” summed up the problem. The interesting part about these apologies, to PR professionals, was the fact that lawyers helped to phrase them. I’m not suggesting cheap spin and mindless excuses. If transgressions were made, then take responsibility. Don’t tell me somebody wasn’t responsible for billions of pounds disappearing into thin air – just read comments from the British public at the end of the online article. The response also begs a question: where was the executives’ PR counsel?
Few, if any, executives are prepared to respond to the current crisis to protect their reputations. The usual crisis communications is not going to do it. Understanding what got us into it and a well-thought-out plan of action for the new normal will separate winners from losers in the next round.
