"BrainchildThe 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.

Howard Clarke 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 Clarke, 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 Evans, Clarkes 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 Im going to have to come down hard on all of my man-agers. Somebody will goperhaps several peoplebefore this situation is over. Theyre obviously getting EXTREMELY slack on design security. I wont 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 isand it could be anyonebelieve me, heads will roll!!! Ill 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 find-ing the source of the leak. Please be thorough in your investigation and be TOTALLY HONEST with me in presenting your findings in this matter. Someone will pay for this. THIS IS TOP PRIORITY!

Howard Clarke, CEO

Many recipients of the e-mail felt personally attacked and threatened. Before days end, e-mail, phone calls, and rumors were flying. By the following day, Clarke 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 Evans began circulating throughout management and beyondto 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 Evans about how Howard really felt and the level of contempt he showed for all of us, making us all appear incompetent and dishonestthat, for me, is the last straw. Even if I stay, it has destroyed my relationship with Howard forever.

Now Clarke sat, head in hands, in Evanss office. Barry, I was simply trying to find the truth.

Evans walked over to a bookshelf and pulled an old, well-used volume. Do you remember your Sophocles from school, Howard? In one Greek tragedy, Oedipus the King and his persistent search for truth in the murder of his predecessor, King Laius, followed a path that abandoned reason and led to his own undoing. My friend, in your case, its not the search for truth, but its the path you takewhat you say, how you say it, and to whom you say itthat is important.

OKwhat do you think I should do next?

Questions

1.What is the underlying communication mistake in this case? Why do you think Howard Clarke sent those e-mails?

2.How do you think Clarke should have communicated his concerns about the information leak? Why?

3.What should Clarke do now to try to recover from the negative impact of his e-mails? Suggest specific steps."