Posted: March 17, 2016
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Article Summary On March 10, 2016, the top public relations executive of the massive J. Walter Thompson advertising agency (JWT) filed suit against the agency and its CEO, Gustavo Martinez, accusing Martinez of an “unending stream of racist and sexist comments.” On March 15, Adweek journalist David Gianatasio emailed me in search of “crisis communication” (really outrage management) advice on how JWT should handle the controversy. My brief response emphasized that the agency had to know whether the accusations were basically true or not, and that its strategy should depend on that. A fair amount of my email was included in a March 15 article Gianatasio coauthored with Patrick Coffee and Katie Richards. (I have posted the whole email.)

The JWT Ad Agency Can’t Keep Pretending
It Doesn’t Know If Its CEO Is
a Harasser and a Boor or Not

(a March 15, 2016 email in response to a query from David Gianatasio of Adweek)
Adweek’s March 15 article by Patrick Coffee, Katie Richards, and
David Gianatasio drew from this email.

JWT faces three charges.

The charge the agency has responded to is that CEO Gustavo Martinez was guilty of a long string of racist and sexist remarks and behaviors, creating an environment in which the agency’s chief communications officer, Erin Johnson, felt she couldn’t do her job. The agency’s response is that it takes the charge seriously, has been looking into it, and hasn’t found any supporting evidence so far.

That might be okay if it weren’t for two other charges:

  1. That many senior agency officials knew what Martinez was doing – both because they were witnesses to some of it and because Johnson raised the issue internally – and did little or nothing to stop it; instead they collaborated in retribution against Johnson.
  2. That there is a climate of fear at JWT that prevents people from coming forward with what they know about Martinez’s misbehaviors.

A company might – just might – be able to conduct a credible internal investigation of its own CEO. But nobody can conduct a credible investigation of itself. So how can any company credibly claim to be investigating allegations that it ignored the CEO’s misbehaviors and retaliated against the whistle-blower? And how can any company credibly claim to be investigating allegations that it has created a climate of fear in which its employees are afraid to tell it what they know?

Those sorts of allegations need to be investigated by outsiders. That’s what courts are for.

But even the agency’s response to the first charge, the charge against Martinez, doesn’t cut it. Either Martinez is an out-of-control racist, sexist boor running an ad agency that’s unable or unwilling to rein him in, or Johnson is a vindictive liar or a fantasist. I don’t know which, but I have to think the top people at JWT know which. Even if they’re unsure about some of Johnson’s specific claims, they’ve got to know that other claims – claims about things Martinez did or said in front of others – are either basically true (though perhaps exaggerated) or totally false.

Their choice of a crisis communication strategy obviously depends on which crisis they’re facing: the Martinez crisis (an out-of-control CEO) or the Johnson crisis (a pile of scurrilous false allegations). Pretending they’re still trying to decide which crisis they’re facing is not a viable crisis communication strategy.

Let’s assume that Johnson’s claims are basically true. Under that assumption, what should JWT do and say?

number 1
It needs to get rid of Martinez.
number 2
It needs to acknowledge the basic truth of Johnson’s claims.
number 3
It needs to apologize to her, not just for what Martinez did and said, but for the company’s complicity.
number 4
It needs to take seriously the question of whether Martinez is a one-off or symptomatic of a broader problem at JWT. (And it needs to avoid suggesting that other agencies have the same problem; that may be true, but coming from JWT it will sound like an excuse.)
number 5
It needs to resolve to make changes in the agency culture – both with regard to respect for diversity and with regard to openness to employee concerns and grievances.
number 6
It needs to follow through on that resolution in ways that employees and outsiders can see.
number 7
It needs to make all of the above a higher priority than defending against Johnson’s lawsuit. That is, it needs to realize that its reputational vulnerability is orders of magnitude bigger than its legal vulnerability.

On the other hand, if Johnson’s claims are false, JWT needs to say so. It needs to insist that Martinez is the victim here and Johnson the perpetrator. It needs to marshal the evidence that this is the case and go public with that evidence now, not months or years from now when Johnson’s lawsuit is finally litigated.

I see little value in mealy-mouthed statements that the parent company’s lawyers have been investigating the charges since late February, haven’t found any evidence yet but are still investigating.

Added: March 18, 2016

Martinez Resignation Not a Breakthrough

On March 17, Gustavo Martinez resigned as CEO of J. Walter Thompson, and David Gianatasio of Adweek emailed me for comment. I responded briefly:

So Martinez has resigned “by mutual agreement” between him and his employer. This isn’t much of a development. It won’t help create an environment in the advertising industry where harassment isn’t tolerated and employees feel it’s safe and useful to voice their concerns about senior executive misbehavior.

If JWT and WPP were to announce that they were now convinced that Johnson’s allegations were basically correct, apologize to her, and resolve to make major changes in the agency climate, that would make a difference.

Of course they shouldn’t do that unless they really are convinced that Johnson’s allegations are basically correct.

But the growing impression among insiders – of whom I am not one – seems to be that Martinez was a jerk and worse, that many in the company and industry have known for some time that he was a jerk and worse, and that more and more evidence of his misbehavior is bound to emerge. So JWT and WPP are hoping they can opt out of the controversy by letting Martinez resign – that is, by neither defending him nor excoriating him. That certainly won’t help clean up the agency. I hope it won’t clean up its reputation either.

Patrick Coffee’s March 18 follow-up article quoted my first paragraph, but quite rightly focused on responses from people inside the advertising industry.

Copyright © 2016 by Peter M. Sandman

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