Domino Theory

When trouble strikes a Hewlett-Packard or Congress, for instance, the response is almost biblical: Heads are gonna rollFair or not, blame rises to the top

October 31, 2006|By Jonathan Pitts | Jonathan Pitts,sun reporter

Patricia Dunn is out. Joe Torre stays in. Dennis Hastert, for now, is hanging on.

The high-profile jobs of chairing Hewlett-Packard's board of directors, managing the New York Yankees and running the U.S. House of Representatives could hardly differ more in their scope and meaning, but events of recent months have brought leaders of those institutions, and others, face-to-face with a law of human behavior older and more formidable than American corporate life itself.

When crisis hits an organization, someone's going to pay the price.

Few in ancient Jerusalem probably really believed that a hoofed mammal had caused their troubles for the previous 12 months, but that didn't keep the author of Leviticus from calling for a high priest to place his hands on a "scapegoat's" head once a year, confess upon it the sins of the Israelites, and drive the beast away to "bear upon [it] all their iniquities unto a land not inhabited" (16:22).

To Ben Dattner, a professor of industrial and organizational psychology at New York University, little has changed.

"How does the saying go?" he says. "`Heads are gonna roll?' or `Somebody's gonna have to take the fall?' Sometimes it's justified and sometimes it's not, but when there's a major failure, lapse in judgment or some perceived lapse in ethics, people do want to see a single human agent held responsible."

Bosses try to hang on too long. Top dogs only too happy to benefit from group success deny knowledge of what went on below them. Low-level managers might jump first or get pushed out. Responsibility and culpability don't always mesh. And leaders and those near them get caught up in organizational dynamics that, rational or not, might as well be stamped on our behavioral DNA.

Harry Truman set the standard for accountability with that famous sign on his desk: "The buck stops here." But when failure strikes a group, be it corporation, sports team or branch of government, responsibility can seem as elusive as a greased football.

President Bush accepted responsibility in September 2005 for what he termed the federal government's flawed response to Hurricane Katrina - just about the time Michael Brown, the director of the Federal Emergency Management Agency whom Bush had just commended, resigned in disgrace. Ravens football coach Brian Billick admitted to arrogance that had cost the team wins last year but remains boss. He let go his offensive coordinator recently, taking over that job after his team kept struggling to score points.

Then there's Patricia C. Dunn. Two years ago, Hewlett-Packard Co., the Silicon Valley computer giant and the nation's 11th largest company, made her chairwoman of its board of directors. One of her first acts was to write a confidential document meant for board members only. A week later, to her dismay, an account of it appeared in The Wall Street Journal. She had a leaker on her hands. Dunn hired a team of private investigators to find the turncoat.

To John Collard, an Annapolis-based corporate turnaround specialist, Dunn was only protecting her constituents' interests. "Boards report to stockholders," he says. "If there's any sort of wrongdoing that's going to hurt the company, she should take action."

But, according to prosecutors, investigators behaved badly, setting up sting operations, rooting through trash and using false identities to obtain the phone records of board members and journalists. The California attorney general brought fraud and conspiracy charges against Dunn, another HP boss and three investigators. The scandal stunned Wall Street and triggered a purge of the company's upper ranks.

Was Dunn responsible? She says no. "At no time in this investigation was I responsible for designing its methods," she told a congressional panel looking into the matter. "I do not accept personal responsibility for what happened."

"It's her best defense," said Jonathan Turley, a prominent commentator on legal issues. "Not ignorance of the laws [in question], but ignorance of the act."

It's not the first time a business leader has offered such a rationale when something goes badly awry. Jeffrey K. Skilling, recently sentenced to more than 24 years, and the late Kenneth L. Lay argued vainly to a jury that they were unaware of underlings' actions that unraveled Enron Corp. Bernard J. Ebbers, the ex-chief executive of the former WorldCom Inc., sought to portray himself as a "country boy" intimidated by the workings of the global telecom giant he led - before he, too, was sent to prison. And, in Maryland, William L. Jews, CEO of CareFirst BlueCross BlueShield, called himself a mere "potted plant" as the company sought to make changes that would net him and others millions in bonuses.

At HP, however, as early as last February, an officer in the company's own security department had warned higher-ups that the private eyes were using methods that would damage the company's reputation and might be illegal.

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