Managerial Excellence: A case study in not.

It is always risky wading into any topic that involves politics or religion. That said, writing this blog was one that I could not just ignore.

Stephen Harper, the Prime Minster of Canada is often cited in the media as being proud of the managerial excellence that his government has brought to office. I think that is why so many people are shocked that the current Senate has spiraled so far out of their control.

For those reading this blog who aren’t Canadian and may be unfamiliar with the details, there is currently a spending scandal in our Senate involving a number of Senators who are accused of inappropriate spending of their personal office accounts (In Canada, Senators are appointed at the recommendation of the serving Prime Minister and serve until they choose to resign or reach the age of 75). Three senators have been suspended based on these allegations. What has been become the larger political story is whether the Prime Minister, his office (called the Prime Minister’s Office or PMO) and other senior Conservative  party members or Senators acted inappropriately or illegally in what may or may not end up being a “cover-up”.

At issue is whether the Prime Minister knew the details of the reimbursement made by the his Chief of Staff (Nigel Wright) to one of the Senators (Mike Duffy, who had been appointed by Stephen Harper) The reimbursement was a personal gift from Nigel Wright of approximately $90,000 so that Mr. Duffy could repay his expenses in question and therefore allegedly avoid public scrutiny. The media has also reported that the RCMP is investigating whether this payment was illegal.

Our Prime Minister, who is frequently reported in the media as being a very hands-on (some would say a micro-managing) leader and who strictly controls his Ministers and his Government’s message, has publicly refuted the charges claiming that he was unaware of any payments made by his Chief of Staff or any details regarding the current claims of a cover-up. To some, his arguments are accepted while to others, it appears to be a case of either at best, plausible deniability or at worst, outright obfuscation of the truth.  I will leave the politics to those who care to argue for one opinion or the other. Rather, I would like to focus on the managerial implications of this situation.

If we accept the Prime Minister’s claim that he was unaware of what was going on in his office, then we have to assess the allegations of the RCMP investigation that the PM’s Chief of Staff plus a number of other senior members of the PMO (including legal counsel), senior members of the Conservative Party and Conservative Senators were involved and aware of the payment. This leads to the logical question: If the Prime Minister was unaware for a number of months of something of this magnitude occurring in his office, what else is he unaware of? This is not the hallmark of managerial excellence. Mr. Harper has told the press that the action of suspending the senator without formal charges being laid against them was justified because their actions would not be tolerated in the private sector and that these Senators would be fired.

Similarly, I believe, that a CEO who’s executive team caused their company’s reputation to be dragged through the media gutter to the scale of the Senate scandal, and whose defense was that “I didn’t know”, would also be dismissed by their Board.

As a CEO, plausible deniability is not a defence. If you are guilty of not knowing, then you are guilty of not managing, not surrounding yourself with the right people, not creating a culture of honestly and openness, not being in control and not being capable of delivering the outcomes that you were hired to deliver. Whether you knew or not, both are the equivalent of a capital offence when something really bad happens.

Compare this to a recent situation I experienced in the private sector. A senior leader let his personality get in the way of his interactions with another team member. Some of his concerns were justified, but many stemmed from other factors including is leadership style, power and control. The situation escalated over a number of months to the point that the relationship between the two leaders was unworkable. At this point, their boss stepped in. Following individual discussions with both, the three met. The outcome of that meeting would be binary. They were either going to find a way to work together or the company was going to move on without them.  Instead of obfuscation, denial or excuses, the more senior of the two leaders admitted his behavior was unacceptable. In fact, he had a pre-meeting with the other leader to apologize. The actual meeting immediately evolved to the positive and a plan was made to repair the damage and move forward.

Similarly, I believe that if Mr. Harper had simply swallowed his ego, the Senate scandal would long ago have been relegated to yesterday’s headlines. If he had admitted he screwed up in not being forthright when the allegations first surfaced and that this past actions were motivated by feelings of being ashamed to have appointed Mr. Duffy and embarrassed that one of his appointees had behaved in the manner that Mr. Duffy is alleged to have, he would have been forgiven. He also would been able to protect Mr. Wright and Canada would still have the services of Mr. Wright, who by all accounts is a superior businessman and operator.

There are a number of managerial lessons to be taken from the Senate scandal. Many books have been written on the downfall of leaders due to their ego, hubris and inability to acknowledge their mistakes. Many examples exist where the actions after the fact (think Watergate cover-up) cause greater damage than the act itself. Finally, one managerial rule that I learnt early is to do what you do every day as if it would appear as the headline of tomorrow’s newspaper. The corollary is, if you are about to do something which you would not want to be tomorrow’s headline news, then you probably should not do it.

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