MLB's Unauthorized (and Ridiculous) Crisis Guide for Owners
The news coverage following this scandal has been distressing for Houstonians. But Jim Crane, the Astros' owner, seems to be persevering. None of the Astros players were penalized. We still have the trophy. And eventually, people will talk about something else (hurry up election 2020).
February 27, 2020 at 01:14 PM
9 minute read
Our hometown Astros have been in trouble. Instead of people writing and talking about how they are the new team to beat, the story has been the cheating scandal where the Astros are "alleged" to have used a trash can lid to signal incoming pitches from the opposing team to the Astros player at bat. Yes, in Houston, when we want to send secret messages, we use trash can lids. They supposedly had some camera system in the outfield that helped make this scheme work. But the Astros is a data-driven team—in the book, "Astroball," Ben Reiter wrote about how they used data and a growth mindset from players to win it all in 2018.
The news coverage following this scandal has been distressing for Houstonians. But Jim Crane, the Astros' owner, seems to be persevering. None of the Astros players were penalized. We still have the trophy. And eventually, people will talk about something else (hurry up election 2020). The Astros have really shown how to handle these sorts of crises, so we thought we'd pull together some of what helped them sidestep this scandal as a roadmap for future owners faced with a crisis.
Here we go:
- Insist on immunity for players. First things first, when faced with a crisis that potentially can impact the team (or any organization)—protect the players. These men are the people who bring people to the stadium. When is the last time you went to a game and got a bobblehead of the general manager? Unless you are a baseball geek, you probably don't even know who he is. He doesn't bat, or make catches or post on Instagram with his significant other. What you have to do when faced with a crisis is protect the people who make money for your entity. The best way to do this is when the MLB or any investigative entity comes knocking, tell them you want a deal before you say anything. Sure, government regulators are reluctant to give out immunity (and there is a cumbersome process to get it, and, as a policy matter, it's generally frowned upon). As a side note, juries also hate it when it seems like the wrongdoer got a pass. But if you are the team owner, you have to protect the players. You tell the MLB and their investigators that no one talks without a deal. The players' union will back you. You may even try to extract some additional concessions, such as the ability to edit whatever report they put together and the ability to choose the investigators (see below). Most importantly, get this deal up front. No one talks without a deal. If this doesn't work, just assert immunity anyway. Tell the MLB that players cannot be prosecuted because, well, no one cares about cheating and it's just part of the game. It may work.
- Fight any involvement by outside experts. Once you have locked down immunity, make sure an outside firm does not get involved. As an MLB owner, you want the folks who have a direct interest in the outcome of the investigation to be the shot callers. I know an outside firm will tell you good investigators have independence and don't have a stake in the outcome. But that's not what you want. You want investigators who will see that if this goes bad for your team, it's going to be a mess for the league. People who understand that cleaning up a crisis quickly and quietly floats all boats. If the MLB insists on an outside law firm, try to get one that has done work for your team before with people who have no experience investigating complex matters. Tell the relationship partner it's really easy—investigations are like playing first base. Anyone can do it.
- Don't apologize. Apologize? Apologize for what? If this strategy doesn't work, escalate to a general apology for how people perceived the crisis. Never admit wrongdoing. Put this on a sticky note next to your laptop. Try to keep the players out of it. If absolutely necessary, tell the players to apologize for the organization about what happened (accept no personal fault). Just tell them they have immunity; they don't have to accept any fault. If you get them thinking too much about the crisis, it could impact player performance and game outcomes. Remember, if you win, the fans will forget (you hope). For the fans, make it a joke. In the Astros case, produce some trash can bobbleheads where you shake the statue and the player smacks the trash can. Or some little bats with the words "can basher" printed on the side. Fans love freebies. You'll have to adopt this example to fit your crisis.
- Contradict yourself. Once the findings come out, the news media may begin to focus on what went wrong. And they may challenge the credibility of the investigation. This is OK, better to have people second-guessing after the fact than to get a bad report. Stay the course. When questioned about the investigation or the underlying facts, keep providing a different story. No fact is too small to contradict. The worst part is over now that the investigation is behind you, and if you hit step #1 on the money, what's the worst thing that can happen? You fire a few people, talk about culture, and then talk about something totally different (see below).
- Change the conversation. When reporters, fans or other stakeholders talk about your contradictions or the flimsy investigations, just talk about something else. Anything. Try to avoid boasting that the allegations did not impact the team's performance. This can stir up more controversy. And when other teams complain, don't respond.
- Don't follow social media (or really any media). This one is hard. Players like to post a lot on social media, and fans like to look at this sort of stuff. Advertisers on social media platforms count on these photos for audience engagement. But as the owner, you can't follow this stuff. Block it out. Stick to the hard copy papers, because it's easy to get an assistant to cut out negative articles. Never happened. If you need to get on Twitter or Instagram, stick to nonbaseball related posts. Cats are safe.
OK, OK. For companies, these six steps are unworkable (well, for anyone, they're stupid). For companies, the challenge and the lesson from the Astros' cheating scandal is to focus on culture and ensure that the organization's leaders encourage employees to make good choices. Turn these steps on their head, and you have the start of some real advice. Before the news of the cheating scandal broke, we wrote an article following the Astros' handling of the Sports Illustrated reporter's comment showing a failure in culture. We were optimistic they could turn it around but didn't have the whole story.
The cultural takeaway for companies is obvious. But it's not a small thing. Compliance and ethics leaders can talk about data and risk and how one helps the other, but those things are only relevant once you have confirmed the basic blocking and tackling is done. There are many examples of cultures that resulted in employees taking risks that, in many cases, were the companies' undoing. Enron is an obvious example (and, sort of ironic, given that the Astros play on the old Enron field). But a number of cultural issues have caused investors to scratch their heads (see Theranos, WeWork, and others now facing funding issues). We see the same issues over and over—culture and governance failures.
Cultural red flags may range from unusual employee turnover or human resources issues, internal theft or other violations of ethics-related policies to ethical lapses by leadership. Start with an outside view and work in—next time you're at a wedding and feeling bold, ask a guest what the chances are that the married couple will divorce, then ask a waiter at the wedding (or the bartender), then ask the owner of the venue. Chances are, your answers will range from very low to statistically significant depending upon inside or outside perspectives. Getting an outside perspective on culture can sometimes help you better assess whether you have a problem.
An effective culture, whether an MLB team or a company, helps people make good choices when they are on the fence about what to do. Vanessa Patrick, a professor at the University of Houston, conducted a work identity study that found that many people identify their home self differently from their work self, and this can lead to ethical lapses. Strategies to collapse the two include flexible work schedules and policies to promote people to be their whole selves at work. Just like within the Astros, many corporate problems start with culture. Sometimes this basic ethics and compliance work does not lend itself to a dashboard or the numbers some programs chase. It's not a slide deck, a memo, or a speech from leadership. It is how employees internalize the company and its governance structure and what choices they make day to day.
The real lesson and advice to MLB owners (and any corporate leader) is to make sure your culture works. And remember the Astros were chasing data too (remember "Astroball"), they just didn't truly see that what they were measuring. Companies chasing compliance data and performance indicators, without strong fundamentals (what the government calls "a paper program), face the same risk.
Ryan McConnell and Meagan Baker Thompson are lawyers at R. McConnell Group—a compliance and internal investigations boutique law firm in Houston, Texas. McConnell is a former assistant U.S. Attorney in Houston who has taught criminal procedure and corporate compliance at the University of Houston Law Center. Thompson's work at the firm focuses on risk and compliance issues in addition to assisting clients with responding to compliance failures. Send column ideas to [email protected]. Follow the firm on Twitter at @rmcconnellgroup.
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