1. What is the underlying communication mistake in this case? Why do you think Howard Tannenbaum sent those e-mails?
2. How do you think Tannenbaum should have communicated his concerns about the information link? Why?
3. What should Tannenbaum do now to try to recover from the negative impact of his e-mails? Suggest specific steps.
The toy industry is highly competitive and can be as cutthroat as any pirate adventure. Yo-ho-ho! Snooping, corporate espionage, and efforts to keep emerging ideas under wraps are all part of life in the toy industry. A certain level of managerial paranoia is expected. But when the private e-mail of an industry CEO was discovered and began making the rounds, it unleashed a firestorm and brought disastrous results on company morale, unwanted media attention, and public embarrassment.
Howard Tannenbaum is the longtime CEO of a major toy company. Over the past few years, his company worked to develop a new product line, called Brainchild, that all concerned believed would be a blockbuster. The passion of Tannenbaum, this new line of toys was so top secret that portions of the line were created and produced piecemeal among the various divisions. In the beginning, it was all very hush-hush. But as the line moved closer to completion, with the expected Christmas season launch date more than a year away, press and industry rumors gained momentum.
At 8:00 a.m. on a June morning, Barry Paine, Tannenbaum's attorney and longtime friend and confidante, arrived at his office, opened his e-mail, and saw a flagged message from Howard:
Barry:
We have a disaster in the making here. Looks like I'm going to have to come down hard on all of my managers. Somebody will go-perhaps several people-before this situation is over. They're obviously getting EXTREMELY slack on design security. I won't say now how I discovered the breach or what was stolen with regard to the new product designs, but suffice it to say that at this point, EVERYONE is suspect. Needless to say, I am FURIOUS! When I find out who it is-and it could be anyone-believe me, heads will roll!!! I'll call you later this morning. WE NEED TO MEET. Thanks for letting me vent. Now, I can compose the REAL e-mail to managers.
Howard
Later that same morning, managers throughout the company received the following:
TO ALL MANAGERS:
We have a situation here in which product design information on the new line, information that should have been under the HIGHEST SECURITY, has been breached. Let me make it clear that each of you is responsible for investigating your division and finding the source of the leak. Please be thorough in your investigation and be TOTALL Y HONEST with me in presenting your findings in this matter. Someone will pay for this. THIS IS TO P PRIORITY!
Howard Tannenbaum, CEO
Many recipients of the e-mail felt personally attacked and threatened. Before day's end, e-mail, phone calls, and rumors were flying. By the following day, Tannenbaum felt pressured into trying to defuse the anger by issuing a second, apologetic e-mail. However, events were already spiraling out of hand, as somehow the contents of the original e-mail to Barry Paine began circulating throughout management and beyond-to employees and at least one member of the press, who dubbed the debacle "Toy-Gate." The perception of a CEO and a company out of control increased, and the stock price took a minor hit.
"The first e-mail left me stunned," one longtime manager said. "But when I saw the e-mail to Paine about how Howard really felt and the level of contempt he showed for all of us, making us all appear incompetent and dishonest-that, for me, is the last straw. Even if I stay, it has destroyed my relationship with Howard forever."
Now Tannenbaum sat, head in hands, in Paine's office. "Barry, I was simply trying to find the truth."