In deciding to fine Merlin Entertainments £5m for the accident with its Smiler ride at Alton Towers, one of the factors the judge, Michael Chambers QC, took into account was a press release in which “human error” was cited as an issue for the crash. Instead, he said “catastrophic failure to assess risk and have a structured system of work” was to blame.
It is generally considered that Merlin handled the communications around the Smiler incident well. Its chief executive was not only available for interview rapidly – and was well briefed – but he also visited the people hurt in the accident in hospital. However, the “human error” error was indeed an error. And Merlin’s not alone in falling for this misfiring wizard wheeze to deflect blame.
Wells Fargo, the US bank, tried to finger its staff for the scandal that has seen it fined $185m for allowing employees chasing sales targets to open as many as two million accounts that customers did not authorise. Chief executive John Stumpf was coruscated by US lawmakers when he gave evidence in front of a Senate committee. Senator Elizabeth Warren said: “Your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy PR firm to defend themselves. It’s gutless leadership.” Since then Mr Stumpf has agreed to give up over $40m in shares and compensation and is clinging onto his job by his fingernails.
Closer to home the Labour leadership, Jeremy Corbyn and John McDonnell, blamed a junior team member for the leak of a list of 13 Labour MPs who had supposedly abused their party leader. Mr McDonnell said he had apologised and would meet the MPs in question. However, as a result, the Momentum group in Labour know exactly who is at the top of the list of MPs they will try to get deselected.
Blaming a junior for creating a crisis might seem like a good way out for a boss, but it will be easily and quickly shown up to be, as Senator Warren said, “gutless leadership”.
Harry S Truman, the US president, famously had a sign on his desk saying “The buck stops here”. In other words, “I’m the boss and I’m responsible”. As the boss – the CEO – everyone reports to you, the chief risk officer, the head of HR, the head of retail sales, the chief safety officer. The underling who has failed to put on the safety catch; has mis-sold your products; has abused his position to try and get sexual favours or not deployed the right risk procedures, is somebody you have the power to hire or fire. So his or her mistake is your responsibility. That’s why they pay you the big bucks.
Airlines have cottoned onto this and use it to their advantage. Whenever there is an air incident, airlines are often quick to praise the air crew on how they handled it. This is because this is one of the few elements they control. The aircraft are made by Boeing or Airbus, engines by GE or Rolls Royce, the planes are usually leased from a third party and maintained by contractors, the airports and air traffic control are run by someone else entirely. So the fast action of the well trained pilots and cabin crew when some else cocks up shows how good the airline is.
Of course this can be taken too far. A few years ago, Virgin Trains had a derailment in Cumbria. Sir Richard Branson flew to the scene in his helicopter and – reading from the airline playbook – praised the fast action of the train driver. This had rail experts scratching their head. The train had automatic anti-collision systems which are activated as soon as the train runs into trouble – so you could have had the railway’s version of Lewis Hamilton or Mickey Mouse in charge and it wouldn’t have made a difference.
But then few CEOs can even attempt to match Sir Richard for PR skills. He knows where the buck stops.