Head Noise with a Terrorist Chaser

When I first began developing the idea for this column, I never considered covering any relevant current topics or news-related events.

With all the controversy surrounding the Sony/North Korea situation, I couldn’t resist addressing the subject in this column. So, here goes.

“Obama Faults Sony Decision to Pull Film”.   “Obama Faults Pulling Movie”.   Front page headlines from the Wall Street Journal and the local city paper this past weekend. Sunday morning, the Sony story was the lead on Meet the Press and every other morning news program. Then again, on the evening news.

For insult to injury, Saturday Night Live did a pretty hard hitting parody with Mike Myers as Dr. Evil. Sony took some pretty hard shots in that sketch. Still, it was pretty funny.

Let’s take inventory of just some of the events that, it’s pretty safe to say, are causing Sony’s CEO some brain-throbbing caliber Head Noise.

  • Hackers break into Sony’s computer system—bad enough in and of itself.
  • Hackers then spread gossip emails that create major headlines and coverage.
  • At least one senior executive is caught in what most construed as a racially derogatory comment about the President of the U.S. Never, ever a good thing.
  • Much coverage is given to Sony exec’s request for the news media to avoid publishing any of the gossip contained in private emails which caused more coverage than would have otherwise been given to the salacious and gossipy emails
  • Word leaks that employee records were compromised. Those records include lots of personal information, SSNs, etc.
  • Lawyers, supposedly representing employees, file at least 2 class action law suits against the company.
  • Computer security experts readily weigh-in with their opinions to anyone who will listen about how weak Sony’s security really is, in their expert opinion.
  • Employees attempt to cash-in or seek revenge with stories of what they did and didn’t do while the systems were down. The news media always loves a good disgruntled employee story.
  • The CEO takes major heat for not communicating often enough or in enough detail with employees. Hmmm, think he might have been just a tad bit busy trying to figure out what kind of crisis he had on his hands before he said something that could become inaccurate and subject him to even greater criticism and, probably, legal liability?
  • Sony USA’s Japanese parent company publicly back pedals from the entire situation to distance itself. My guess is that they were doing anything but backpedaling with the CEO in private. What’s the word in Japanese for reaming?
  • Then, it gets worse. Sony’s entire distribution channel for the movie publicly bails out on them. And, they all do it in a matter of hours.
  • Sony execs announce that they will not release the movie.
  • No one in the Hollywood establishment, besides George Clooney, steps up to support Sony’s position and cyber terrorist experience.
  • First amendment advocates immediately begin to cry foul and hammer Sony for giving in. Ironically, first amendment precedent is being challenged even though the movie is, at best, a grade B comedy.
  • The U.S. President slams Sony for not talking to him before making the decision not to release the movie.
  • Sony’s CEO is forced to tangle with a U.S. President and publicly dispute the President’s claim that no one at Sony talked to him by stating that Sony execs were in contact with a number of staff members in the White House. Did he win or lose on this issue?
  • Sony “clarifies” their original statement about plans for the movie to say that they will release it, they are just not sure where, when or how.
  • Sony has to go on the offensive—probably an extremely carefully crafted legal tactic– and characterizes the hacker attack as a terrorist act.
  • President Obama—in just an equally carefully crafted political tactic– characterizes the hack attack as cyber vandalism.
  • Sony is out maybe $100 million or more.  Negotiations and, probably legal battles, will follow with the insurance carrier that will drag out for the next 2 years.

Wow, that’s a lot of serious stuff crammed into a very short timeline. Compound all of that with the number of internal legal staff and outside counsel that are whispering in the CEO’s ear as to the degree of liability they potentially have on all fronts. Worse, how much more liability they will have if they do release the movie and something bad does happen or at least that could by some stretch by some lawyer or media hack be attributed to the movie’s release.

The precedent, ramifications, liabilities, freedom of the press issues, employee morale impact, security threats and less than harmonious relations with the White House are way, way more than enough to give a guy a blockbuster size case of insomnia via Head Noise.shutterstock_139305425--blog

Would you have handled anything differently during the course of these events? Was the CEO lax in his oversight of company computer system security or was he fed bad information by his own team about how secure the system was? Can you imagine how much of his time he is spending on managing upward with the head honchos at Sony Japan? Finally, what does he need to do to rebuild employee trust and morale beside give them a free subscription to an identity theft and credit protection service?

 If you have an interesting and/or educational CEO story of Head Noise caliber, write to me at cbishop@capitusgroup.com. I’d love to speak with you and share your story in my Head Noise blog. You can tell your story either on the record or, without attribution

Cameron Bishop is a partner with The Capitus Group. The firm provides comprehensive business value enhancement and transition strategy solutions. Partners and Advisory Directors comprise an experienced team of business professionals who have successfully owned, run, grown and sold companies. Capitus utilizes proven value enhancement and risk reduction techniques to enable superior transition options.

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