Money Beat

From Your Wallet to Wall Street: The Money News That Matters to You From the ABC News Business Team

« Previous | Main | Next »

Pink Slip E-Mail Error

September 04, 2008 1:05 PM

ABC News’ Bianna Golodryga reports: Mad Men, the AMC drama set at a fictitious ad agency in the 1960s, may be a hit with television critics. But a real-life gaffe from a real-life ad agency is not.

On Wednesday afternoon, a senior human resources executive at The Carat agency -- Europe's largest media network, which does both advertising and public relations work -- accidentally sent out an e-mail meant for a few, but seen by many.

Nm_fired2_080903_main The details of that memo have created a wave of embarrassing, negative press. In one fatal stroke of a key, Carat's chief "people officer," Rose Zory, exposed staff to a private e-mail sent to her by senior vice president Rob Hollander. The e-mail confirmed what had been rumored for a few weeks by parent company Aegis Group: layoffs were imminent.

Of course, none of Carat's 14,000 worldwide employees were aware of the dire decision. And if management had its way, they wouldn’t have been for a while. Over the years, Carat had become one of the world's top ad agencies, with more than 100 offices in 60 countries around the world. With a clientele of more than 4,000 top global companies, the sky seemed to be the limit for the extremely competitive firm. The sky and a slowing economy, that is.

Having lost major accounts like Hyundai and New Line Cinema, it quickly became clear that the company could not stay profitable given its current financial status. And this is where things turned ugly. For it's no surprise that a slowing economy has opened the door for job cuts. Particularly among advertisers, who are typically the first industry to pull their business when times get tough.

So what makes the Carat story so interesting? As is usually the case, the problem lies not with the dilemma, but rather with the way it was handled. Here's how the story unfolds. Hollander sent what he believed to be a confidential e-mail to Zory. The message was laid out in Microsoft PowerPoint and Word documents full of "message" points on how to advise U.S. employees that they would be out of a job.

While no specific number was given, it's clear that the cuts would affect a number of employees across various divisions within the company. Careful attention was given to word choice, for example. The company was not "downsizing" but rather "right-sizing." Those who would be given pink slips were to be advised that they could "go home today and come back tomorrow to clean out your desk or office, you are free to do so. We would like you to meet with your manager following our meeting to transition your work. We will be communicating to your team today. Your manager will be contacting clients. We ask that you do not contact your clients to discuss this situation."

But more delicate care and consideration was aimed at the "critical talent" employees who would keep their jobs. "Let them know we are building for the future," it read. "The actions we had to take, although unfortunate, were necessary to right-size the company and … bring in the skill sets we need to effectively service our business and future client needs."

As for how the news would be spun to clients, many of whom would lose their Carat contacts, Hollander came up with the following explanation: "Mary Smith will be moving off your business. Now that we understand your business better, we are replacing her with someone whom we feel will be a better partner for you." In other words, spinning the changes in order to appear more in touch with their client's needs, as opposed to admitting their own financial setbacks.

One source within the company said that IT attempted to recall the e-mails as soon as the blunder was noticed, but it was too late.

Sarah Fay, CEO of Aegis Media North America, the parent company of Carat Agency, told me that obviously what happened was a mistake.

"€œIt was an example of human error and I don'€™t think it's a reflection of the company's integrity or professionalism. It wasn'€™t meant for eyes outside of the agency, and it was in draft form and wasn'€™t considered for final print," Fay said.

"Everyone in the world has had some sort of experience of a mortifying e-mail situation. This is one of those stories. It happens to be a really big one," Fay added. "€œIt's taken on a life of its own and has become very sensationalist. And what people are laughing about is someone's mistake."

As for what steps the company took in response to the blunder:

"We have messaged to the organization in the form of an apology. Management feels bad that people found out about this actions this way,"€ Fay said. "€œThe people should have found out first, on a one to one basis and clients second."

And will anyone lose their job over this?

"€œThere might be some companies. Where a mistake like this happens, heads would roll. But this was not an intended occurrence. So that would be throwing the baby out with the bathwater,"€ Fay said.

All in all, the handling of the situation showed undeniable creative thinking from a company in business to help with, well "creative thinking." But was it an ethically acceptable way to handle a difficult situation?

Most experts say: "No way."

Crisis management expert Eric Dezenhall, founder of Dezenhall Resources, has heard dozens of similar stories about "rogue e-mails" causing major legal headaches for corporations, many of which are his own clients. "E-mail gives people a lobotomy. I cannot believe what people put in e-mail and the scary thing is, there is nothing you can do about it. The only people who understand how dangerous the outcome can be are those who have seen some of their e-mails end up on the cover of The New York Times."

Dezenhall reiterates that the ultimate crisis in many instances isn't the initial crisis at all but rather the spin of the crisis. "Anything that looks premeditated and says 'here is our spin' strikes people as just flat-out dishonest. The act of planning what you're going to say is very distressing to people and causes them to overestimate the effectiveness of the spin."

Michael Kempner, CEO and Founder of MWW Group, a Top-10 PR and communications firm with a specialty in counseling clients through crisis situations, calls the gaffe a "Horrible situation." "It goes right to the credibility of management, both internally and externally," he said. "A situation like this is extraordinarily difficult to recover from. Not impossible but difficult.” Kempner says that he would advise Carat's management to immediately deal with the issue. "That means coming forward with the full set of facts. It’s critical that they are aggressively forthcoming with core internal and external audiences like clients, employees, vendors, partners and the parent company.

In a sign that Hollander understood the ramifications of what he was about to do, his goes on to tell Zory that "This is a tough one. Since we're not opting to get out in front of the press, we will be left to defend. I think we may need to prepare for different contingencies depending on how they may hit us -- because they will hit us. RISK assessment." Ironic given the risk assessment Hollander clearly didn’t think of before considering what could happen if the e-mail got into the wrong hands. His ultimate failure, like so many others before him, was not what he had initially feared most. Laying staff off would most likely have been accepted as part of an overall weakening economy. But the way in which he proposed handling it made the story a personal one. As Dezenhall says, "There's no good way of delivering bad news, there's just a less bad way." Sage advice Mr. Hollander may want to consider before he sends another e-mail.

September 4, 2008 | Permalink | User Comments (24)

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/t/trackback/433071/33088042

Listed below are links to weblogs that reference Pink Slip E-Mail Error:

User Comments

This doesn't sound like a mistake to me. In order for everyone in the company to get this private email, Rose Zory first had to make the decision to click on the forward button, then she had to select the company-wide distribution list as the recipient. Now, many email programs will cache the list of addresses a user send email to, and will bring up that list as soon as you type a letter in the To: box, but for her to 'accidently' select the distribution list would be careless in the extreme. Besides, why was she forwarding such a sensitive email in the first place? Surely the originator sent it to everyone he wanted to see it.

I wonder if she still has a job with Carat...

Posted by: Bob | Sep 4, 2008 2:13:43 PM

That was not a mistake. That was a "Well... see how you like this!" Not that I blame her.

Posted by: Jim Bob | Sep 4, 2008 2:25:51 PM

Gotta love the corporate bigwigs and the cover your ass mentality that these tools use. Bet Hollander hasn't worried too much about how he's paying for groceries next week.

Posted by: Bob Lees | Sep 4, 2008 2:42:50 PM

Previous posts indicate it was probably not a mistake. Doesn't matter now. What is odd though is the response by outsiders. If I were a CEO in discussions with my senior team, I can discuss these matters in a conference room and draft a plan, but not pass this information to HR by the the most economical means, if HR was not present at the meeting(s)? Sounds like somebody doesn't understand their IT infrastructure, and somebody doesn't understand psychology.

Posted by: geofbrewer | Sep 4, 2008 3:44:36 PM

I know no one wants to hear this because it digs at every person with curious tendencies but here goes: A conversation between two parties is their business and no one else’s. If external parties obtain the conversation via recording, forwarding of emails, accidental sending of emails to others, IM'ing, etc - that's unfortunate but apologies and various explanations should not be given just because the information is somehow deemed "hot" to the third party. If it's not illegal, it's none of the third parties business. We live in an extremely curious society, where third parties are stealing information, hacking to get information, lying to get information; Google even takes pictures of our streets - and for what? Losing your job is the absolute worst, but finding out earlier rather than later has very little influence over the pain.

Posted by: mummey | Sep 4, 2008 4:21:23 PM

Sounds to me like at least one more person needs to be released. A CEO this out of touch with reality, not to mention technology should be on the street.

Posted by: idea logical | Sep 4, 2008 4:23:26 PM

"The IT staff attempted to recall the emails" One of the funniest things I ever read, you can't recall emails once they are actually sent, IF the IT department actually said that, they should be canned as well, because they are incompetent.

Posted by: Bob | Sep 4, 2008 4:46:08 PM

Duh, it's a huge mistake, but who can say something like this has never happened to them? It's a big issue with which we must become much more cognizant of as a society as we become increasingly dependent on email communication.

It would have been so easy to try send an email to say allissa, type in 'all-', see her name pop up and hit enter, and not realizing that "all" popped up instead of allissa. This is a particularly high profile, damaging, and sensationalist example, but don't sit on your soapbox and make public judgments and generalizations about the professionalism and worthiness of a person that makes an unintentional mistake. If people didn't make mistakes, we would be machines. This would have never happened in 1985.

Save your judgments for who should get fired, and allow the company make their own difficult decisions. If its own employees don't like the management, they should simply leave on their own terms.

Posted by: Joseph Sipple | Sep 4, 2008 4:56:11 PM

"We have messaged to the organization in the form of an apology"?!? What a horrible example corpobonics...why can't she just say "we apologized to our employees"? Mutilation of language, particularly with the purpose of softening the mind of the listener, just makes me crazy.

Posted by: Jeremy | Sep 4, 2008 5:12:09 PM

Clearly the company was/is a facade-of-competence. They fail most of the Fisher rules, especially market-potential, any semblance of research, labor-relations, cost and accounting controls, ability to grow, but most of all, it fails in management integrity.

If ANY employee loses a job with little to no advanced notice, then it's a sign of incompetence, negligence or highly unethical and is always indefensible.

If the job of any employee is in peril, then the employees have the right to know and the company has the ethical obligation to let them know as soon as possible.

For anyone to suggest that a company has the right to withhold such information is to condone deceit and malfeasance.

Sure, communications between two or more other people is their private domain -- when it becomes a binding decision, on the physical or fiscal welfare of another then it becomes morally and ethically incumbent on those parties to relay the information to those affected.

If my boss says "Tim, pour this plutonium powder into that reservoir" then I might choose to do it or not depending on whether it's legal, but I have a moral imperative to inform those people which may be impacted by this action.

This isn't about whistle-blowing, it's about respect. Companies always say "their employees are their most important assets" yet astoundingly they perpetually and consistently fail to demonstrate their creed.

Posted by: Tim | Sep 4, 2008 5:18:55 PM

This "spin" put a certain degree of dihonesty on things. Lying to clients about changing representatives is the problem here. Fire the author and the idiot who sent it out "accidentally."

Posted by: howzilla | Sep 4, 2008 5:27:55 PM

Here's a tip - get to the point. Basic journalism dictates that you do not get to the "who, what, where...etc." in the 5th paragraph. Shocking that this made it past the editor's desk.

Posted by: Anon | Sep 4, 2008 5:34:58 PM

Companies/people we are all alike. The dollar is all mighty. The people are not. If they were they wouldn't be thinking of ways to make the facts seem less or more than the facts. They must learn this at the colleges they got their education at or maybe forgot what their families thought them at home. I am sure that this will be a lesson on what not to do at job sites when laying off your employees at many schools. Tell them right away, don't delay, work out a plan that benefits the employees to another job, training, and so on ...
They must of not put that legal/private notice at the end of all company emails that notes if you get this and it is not intended for you to inform the sender and destroy all copies ...
I guess that's what makes news we like to read. As they say, every dog gets it's day. Which reminds me, I better go feed them.

Posted by: SIXTO GALLARDO, JR. | Sep 4, 2008 6:13:09 PM

howzilla, I agree. Hey, layoffs happen. Been there, on both sides. I'd rather know about it through a "mistake" than be surprised and have to clean out a desk in an hour, something I've had to stand and observe. If I were a client, I'd be pretty unhappy. If they're spinning this, what other bull are they feeding me? Can I trust anything they do--or say they've done in my monthly billing?

Posted by: LagunaTriMom | Sep 4, 2008 6:42:52 PM

Bob, Yes, there REALLY is a way to recall an email...at least in Outlook Exchange there is. However, it needs to be done quickly, before anyone has time to open and read the email. Also, anyone sending such an important email to the CEO could have restricted permission for the email to be forwarded or could have used the encryption setting. Explore the menus and tools of your email application.

Posted by: Outlook fan | Sep 5, 2008 12:44:07 PM

Zory sounds like a moron.

Posted by: JOE | Sep 5, 2008 1:43:11 PM

From the article: "The message was laid out in Microsoft PowerPoint and Word documents full of "message" points on how to advise U.S. employees that they would be out of a job."

The article exposes a glitch in certain versions of MS Word. A fellow employee and I fell prey to this glitch as well. We weren't fired but it was embarrassing for us and our employer.

Be aware that private notations in Word documents are no longer considered private notations once sent by email. Even if the points were marked in the document format as notations for the receiving persons viewing only, once the email was sent, all eyes can read what is written.

As I learned from the school of hard knocks, in this busy world of information that zips away with the push of a button, it is best to never assume that what is in written form will remain private!

Posted by: A in WA | Sep 5, 2008 2:03:22 PM

I don't call the carrets or bigwigs I call them cashews.

Posted by: GG | Sep 5, 2008 3:06:35 PM

I'm glad the employees found out through the "mistake"! Instead of the employees being humiliated...it was the company's top staff. The plan simply backfired. I once worked for a company that knew in advance they were letting people go. Each week, one or two employees were "let go". Top management would go into the employee lounge and laugh at 'em . Sick. That's why I'm super-determined to succeed as an entrepreneur.
BDavis for...sundaycosmetics.com

Posted by: BDavis | Sep 5, 2008 5:15:06 PM

Well at least the employees know and they can apply for other work before the layoff.

Posted by: mere | Sep 6, 2008 1:46:37 AM

Poor poor Rose, yea right. She is an awful person who cares nothing for people - for her to be in a role of 'people development' is a farce. She is incredibly unkind and rules through fear. I can speak for many who have worked with her - you get what you deserve in life and let's hope she gets hers. What a fool - karma's a bitch, huh.

Posted by: bob | Sep 6, 2008 12:22:37 PM

Karma is a bitch. I can speak for many who have worked side by side with her - she 'rules' through fear, treats her peers disresectfully, and is your typical know-it-all. Life has a way of balancing things and whether she is fired or not, makes no difference - she has made a fool of herself and I am certain there are many people who are laughing at her. She will always be known for this blunder. I guess she's not looking that smart now!

Posted by: bob | Sep 6, 2008 12:33:27 PM

Word to the wise - password protect critical documents. That way if accidentally sent to the wrong parties they cannot be viewed. It was an honest mistake and unfortunately the meida has run with it. Chin up, Rose. This will pass.

Posted by: Chin up | Sep 9, 2008 5:21:33 PM

Chin up - ha...this will not pass. She will always be known for this.

Posted by: Mary | Sep 10, 2008 4:11:16 PM

Post a comment