Thursday, June 14

Whacking Wal-Mart: BusinessWeek

If there ever was a case study that I would like to see concluded, it is the continued controversy and media spectacle between Julie Roehm and Wal-Mart. In the end, of the two parties still playing (the rest had the sense to exit gracefully), no one is going to win.

Some members of the media are working hard to make sure of it, looking under every stone for evidence to prove that Wal-Mart is not only unethical but also the embodiment of corporate evil (if you believe some of their accounts). Sure, part of it is Wal-Mart's fault, because if a public relations problem has truly grown out of the case, it is Wal-Mart's apparent inability to keep the story simple: its former marketing executive allegedly based her multi-million dollar advertising campaign decision on who could wine, dine, and woo her the most while using company money to fund an affair.

But that's not the story people are writing. Instead, the latest story to surface in the media's "Whack-O-Wal-Mart" game is BusinessWeek with a write-up penned by Pallavi Gogoi. The lead that Gogoi unearthed from nowhere is the story of Chalace Epley Lowry, who started working at Wal-Mart as an administrative assistant in the communications department in January.

Lowry says she was subjected to a day-long orientation with a heavy emphasis on ethics and was told "if we see something that has the appearance of something unethical we should report it." The person she reported was Mona Williams, vice-president for corporate communications, for what seemed to be related to "insider trading" in Lowry's eyes.

"In all honesty, Mona's transactions could all have been above board," Lowry says, "but I acted in good faith, just pointing out that there might have been some wrongdoing."

According to Wal-Mart, Lowry was confused. The company says she mistook a deferred compensation form for an options exercise request and that Williams did nothing wrong. Williams also learned of the complaint, prompting some inner office tension that resulted in Lowry leaving to find new employment.

There is a lot wrong with this story, but perhaps not in the way some people might think. Although employers might provide ethics training, I suggest employees pursue a better understanding of ethics on their own. Even if your employer tells you to report "the appearance of something unethical" that is not an appropriate solution. Of course, you'll never get this out of the BusinessWeek article.

In this case, Lowry would have been better off asking Williams what the documents were before reporting it. Had the papers been related to stocks and tied to insider trading (as Lowry believed and Wal-Mart refuted after an investigation), she could have given Williams the chance to correct the ethical breach, with an understanding that Lowry would report it if no course correction was made. It's about that simple.

Now I don't believe that Lowry intentionally meant to break her supervisor's trust and breach ethics, but she did. And while that is not the story I read in BusinessWeek, that is what the real story is: give your co-workers an opportunity to correct an ethical breach before going over their heads to report it. If more people did that, maybe there wouldn't be a Roehm/Wal-Mart scuff-up to write about.

Right. Sean Womack could have said, "Gee Julie, those e-mails are a little racy for my taste. Please don't send them." Ho hum. At least he had the good sense to get out of a fight that no one is going to win.
Digg!

6 comments:

Jericho Saved on 6/14/07, 8:28 AM said...

Having been in this situation I totally agree with you. My supervisor did something which I thought could be considered unethical. I approached her, without accusation, & asked what she'd meant to do. Her explanation was something I hadn't considered & made perfect sense. I was the one who misunderstood. I wasn't working for a Wal-Mart but I sure could have ended up with egg on my face or worse.
Another great article. Thanks.

Rich on 6/14/07, 10:36 AM said...

Hey Jericho Saved!

Amazing how things turn out at work when someone thinks to ask the source. Had you been working for Wal-Mart with your approach, your supervior might have just told you what it was and you would have avoided the egg. Ethics don't begin with employers, they begin with the person.

I'm not surprised you would have passed. :)

Rich

KBAM on 6/15/07, 8:03 AM said...

Dunno, Rich. You work the fertile story, but your op-ed's just too tidy. As AdScam's George Parker would say, it needs to be..."Nobu'd."

If not obvious to all, the personal responsibility messages are fair enough. Still, with such a good eye, your context is blogospherically "lite."

BusnessWeek knows the Chalace Lowry incident isn't worthy of inquiry. Apparently, the woman didn't understand the document she saw--and won't fathom the next one. Much irony here, but we digress...

The point: The Roehm v Wal-Mart play isn't really about Julie Roehm. It's allegorical. In geo-political parlance, it's about corporate governance and, to a lesser extent, ethics policy. In micro-economic terms, it's about strategic leadership. Remarkably therewith, the world's largest corporation has hatched a three-peat failure.

While the business press (particularly, the WSJ and BW) may not articulate--or even quite grasp--the business-school case beneath the wreckage, it senses that big lessons lie within.

A few more observations, Rich:

1) At least three principals remain. The cast includes billionaire-supplier Irwin M. Jacobs who, perhaps ill-advisedly, plays himself; and it's possible we'll witness the cameo appearance of WMT's gracious-but-underperforming "yachtsman" and CEO, H. Lee Scott.

2) Sean Womack did not merely fade to black. WMT reportedly bought his silence for about $200k, the value of his bonus (or more likely, his severance benefit if not withdrawn for cause). We note this deal was actually made with Womack's estranged wife, in exchange for supplying her hubby's compromising emails. From an ethics perch, this one's 360° radioactive.

3) There will be winners here. At a minimum, WMT investors will take home greater transparency. And for her tenacity, Roehm should score a story rights payday, plus "a stepladder and paint supplies."

Enough for now. My agenda, you ask?

Modest avenger of the persuasion arts. Nice blog.

--BAM

Rich on 6/15/07, 12:11 PM said...

Hey Kbam,

Thanks for the addition. You touch on several great points, some of which link back to other posts. (Thus, a tiddy op-ed that does more to focus on what correct ethics might be than to weigh in on the larger story).

I could possibly agree Roehm v Wal-Mart has become more than Roehm and maybe allegorical, but is that a good thing or a bad thing? Did the participants make it that way or the media or the social commentors? Those are good questions.

But, as some people know, most of my op-eds go beyond the example I choose to write about and toward something outside the story, like what was the better ethical choice for Ms. Lowry.

Sorry you missed that. All my best — Rich

KBAM on 6/15/07, 5:08 PM said...

Awright, Rich, let's dig in the sandbox.

To begin, your advisory on the handling of "appearances of impropriety" is clear. It's an excellent heads up--when applicable.

But read the BW piece again. You'll see that Lowry..."decided to tell her direct supervisor, Sarah Clark, a senior director in the communications department. Clark encouraged her to report the issue to the company's ethics office."

Oops. Given the circumstances, Lowry arguably lacked standing to consult directly with the possible offender. However naïve, she can't be faulted for engaging her boss.

Alas, Lowry's manager had neither a clue about the document, nor a "best practices" response, nor a scrap of common sense. And thus, department honcho--and WMT "Church Lady"--Mona Williams, was ambushed by her choir. How Baroque! (Might Shakespeare have penned this play?)

With such enlightened staff (not to mention vaunted outside counsel, Edelman "faux blog" PR), WMT won't soon be working off its good will deficit.

Which returns us to Julie Roehm.

Had read your coverage of Roehm v WMT. It's pretty much orthodox and, to no surprise, unforgiving. (While vanishingly small, do note there exists a somewhat opposing point of view--but such is not my calling.)

Now, in an earlier post, you sought the Zen of "Marketing 2.x." Might this contribute?
http://www.businessweek.com/magazine/content/07_26/b4040046.htm?campaign_id=rss_magzn

Allegory is a good thing, yes. We'll parse it for years.

Finally, you said, "Did the participants make it that way or the media or the social commentors? Those are good questions."

Indeed. And your blog is just the vehicle for this inquiry.

Thanks for inspiration.

--BAM

Rich on 6/15/07, 8:27 PM said...

Dig in the sandbox? Ho hum. Okay, out of politeness as long as it furthers the discussion, but I'm pretty selective in playing games if that is all we are doing.

That said, I don't have to re-read the article as one of my points was: just because your employer gives you instructions doesn't mean you have to act like a drone. You know, one of my former students went on to be a whistle blower after notifying his employer to clean up the mess. Good for him.

As I said, ethics doesn't begin with the employer, it begins with the person. Standing has nothing to do with it. That's a perceptional issue; something I wish would change, but that's up to each individual.

Titles are nothing more than illusional and the "standing" argument doesn't hold up. Guessing motivations, on the other hand. Tsk, tsk. A little wisdom goes a long way.

Which brings us back to Roehm. My coverage has more to do with the perception she has created for herself and I am certain a great many would disagree with me. I'm not seeking consensus.

I certainly agree that both sides have taken to the court of public opinion and have professionals calling in play from the sidelines. So sure, the article you reference might contribute. I appreciate it. And I'm glad I could offer some value, even if it is for the sake of inquiry and inspiration.

Again, no real winners here. Do you really think that investors want transparency over dividends? If they get more of one with this company, they might get less of other (and I usually encourage transparency; but maybe not as much as some).

If, and that's a big if, Roehm wins a payday, good for her. But it's very naive to think it was for free. The price is credibility. And she has less every day that she employs her "hyperaggressive" tactics.

Despite what I've written, I don't think it can be called unforgiving. I have nothing to forgive because Roehm didn't do anything to me. Her forgiveness will have to come from elsewhere.

I guess that is all there is to say, but you may feel free to visit again if you like. Of course, I usually enjoy knowing who I'm speaking with, though I won't begrudge you if it needs to be otherwise.

All my best, Rich

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