Emergent Wisdom

With the current furore about crimes committed – at the time of writing, phone tapping and paying police for information have come to light – by media in Rupert Murdoch’s ownership (and James’ Murdoch’s management), there appears to be something important missing in people’s consideration. The revelations about phone tapping at the News of the World that are now showing that illegal practices were both widespread and long in duration are raising serious questions about how much the senior management actually knew. Rupert Murdoch has merely apologised for not investigating it in more depth. In essence his defence before the select committee was essentially that he didn’t know what the underlings at the bottom layer of his organisation had been doing and had thought what was initially discovered was an isolated event. Does that claim withstand scrutiny?Note: Article now updated with developments

There is the important matter of what leadership actually entails. Sometimes it’s easier to understand the issues by considering extreme examples, so let’s go back to the second world war. How many people did Hitler kill? I’m guessing that you’ll probably say something like, ‘6 million Jews plus all the soldiers and civilians – about 10 million?’. Actually, I’ve just looked up the answer and it appears throughout the second world war the figures claimed for total number of deaths ranges between 50-70 million. Many of those were as a result of other Axis powers such as Japan, so it’s a bit difficult to assign an exact number to Hitler. But actually, that’s a little beside the point. Let me rephrase what I asked to highlight a distinction to you: How many deaths was Hitler responsible for, and how many did he actually kill personally?

Ah, that makes it more interesting, because we all hold Hitler responsible for the deaths caused by the Nazis, but it’s entirely possible – without doing some research to check – that since rising to power he may have directly killed no-one at all. Even if he gave orders for a specific person to be executed, if someone else carried it out, it is indirect – he didn’t personally kill them. And the critical issue we are considering here is leadership. Hitler escaped being tried for his crimes by committing suicide, but the war crimes tribunals after the war were about the leaders, not the foot soldiers. Indeed, in war crimes tribunals that have happened since, resulting from conflicts including Rwanda, Liberia and Eastern Europe, it is the leaders who are held responsible.

The fundamental point is that leaders create the conditions in which other flawed human beings will inevitably commit crimes to achieve the leaders objectives. Leaders set the tone of the way things are done. Leaders promote in their chain of command people who see things the same was as they do, with similar values and beliefs. That way, when the leader expresses a particular objective, they know that people they influence or directly command will work to achieve that objective in a manner they approve of.

Over time, the level of morality of a leader permeates the organisation they lead. Let us consider three styles of leadership with differing moral approaches: let us consider that one leader insists on justice, truth and equality, perhaps setting a higher standard than the law requires. The second leader insists on remaining within the law, but apart from that will do what they can get away with. And the third leader will do whatever they can get away with. So now let’s consider a business challenge in a competitive environment. There is an opportunity to get away with something that some people would find offensive, but will give each company a temporary edge on something – let’s say a news story. The moral leader will not allow their staff to use means to get the story that they personally disapprove of, and will punish staff who try to get away with it. Those staff that would rather get away with it will tend to leave the organisation, and go to another, where their activities will be more accepted. Another opportunity occurs, and this time to scoop a story requires some activity that is directly illegal. The first leader will not allow his staff to do that. The second leader will not allow his staff to do that either, and the staff that were inclined to try to get away with it will tend to leave for an organisation that will accept them. The third leader will do whatever he can get away with, and he will accept and even promote staff who are willing to do whatever it takes, regardless of how immoral or illegal it is. That is the simple mechanism by which, over time, the morality of the way in which an organisation behaves is a direct reflection of the leadership.

The usual plea of leaders who are charged with the crimes committed by their underlings is that they didn’t know what was going on and that they weren’t responsible for the manner in which their organisation behaved. Let’s consider that for a moment in Rupert Murdoch’s case. If it was so, then rampant illegal activity going on pretty much under his nose over a prolonged period of time would pretty much make him not a fit and proper person. You can’t take the benefits of ownership without taking responsibility it. But that simply won’t wash in Ruper Murdoch’s case. We know, because former editors of The Sun, The Times and other papers have said so, that Ruper Murdoch is most definitely not a ‘hands-off’ proprietor – he pays close attention, gets involved in detail and has tight control, so it is simply not credible to suggest he wasn’t aware of the manner in which people behaved under his direction.

Of course, I’m not suggesting that Rupert Murdoch is responsible for killing as many people as Hitler, I’m just using Hitler and the Nazis in general as an extreme example to illustrate that Rupert Murdoch’s very long leadership of his organisations means the way they behave is a direct result of his influence. That principle of the responsibility of leadership was accepted after the second world war, and it is accepted in war crimes tribunals today. How is it that Rupert Murdoch thinks we won’t accept that principle in business?

Rupert Murdoch’s decades-long leadership of his news organisations means the way they behave are inevitably going to be reflections of his own personality. To claim he didn’t know specifics is not a defence, when his crime is to create the culture and environment in which crimes are inevitably going to happen. That surely makes him not a fit and proper person.

UPDATE 11th November 2011: Although Rupert Murdoch escapted a second round of questioning, Executive Chairman of News International James Murdoch has had to face a second round of interviews at the Houses of Parliament. James Murdoch has denied being made aware of the contents of the infamous 'For Neville' email that exposes that illegal information gathering was widespread at the New of the World. This has been refuted by the paper's former legal manager Tom Crone who claimed he was most definitely made aware. Member of Parliament Tom Watson, who was one of the victims of hacking and also on the grilling panel, said, "It is plausible he didn't know, but if he didn't know, he wasn't asking the questions a chief executive should be asking". In other words, as I said of his father Rupert Murdoch, he was either dishonest or incompetent. Or possibly even deliberately incompetent by avoiding asking the right questions so he could say without lying that he didn't know - which itself would be dishonest. Well, like father, like son.

Tom Watson's most pointed comment was, "You must be the first mafia boss in history who didn't know he was running a criminal enterprise". Exactly. How credible is that?