Whistleblowers And The Risk To Reputation

by Tony Jaques

Whistleblowers are a well-recognised possibility in most organisations. But how the organisation responds to a whistleblower can help determine whether the problem exposed becomes a reputational crisis.

The important lesson from such cases is that how a whistleblower is handled can sometimes trigger reputational damage even greater than the original issue. Management experts advise that whistleblowers typically try to raise concerns using the “normal channels” before taking the “nuclear option” when they believe no-one is paying attention.

So what can be done to protect the organisation? Effective issue management and crisis prevention revolve around identifying problems early and taking steps to address them. This means whistleblowers should not be seen as a threat, but as a warning that something is not right. Organisations should encourage blame-free upward communication rather than a culture of “shooting the messenger,” plus have a formal process by which individuals can legitimately raise concerns.

The American writers Nystrom and Starbuck suggest that top managers should listen to and learn from what they call “dissenters, doubters and bearers of warnings” to remind themselves that their own beliefs and perceptions may well be wrong.

Similarly, the Australian disaster expert Andrew Hopkins agrees that leaders should not rely on assurances from subordinates that all is as it should be. He describes problems as “lying in wait to pounce,” and says mindful managers should use every means available to probe for these problems and expose them before they can impact detrimentally on the organization.

Indeed, Hopkins goes even further, arguing that mindful leaders should actually welcome bad news. “They recognise that it is often difficult to convey bad news upwards,” he says, “and they develop systems to reward the bearers of bad news.”

Welcoming bad news and rewarding Jeremiahs might seem a stretch for some executives. But there is no doubt that crisis proof organisations have formal systems in place to identify and respond to concerns before whistleblowers feel the need to act. That’s how planned issue management and crisis prevention help protect reputation.

This article originally appeared in the June 15, 2017, Vol 8, No. 12 of Managing Outcomes, a digital newsletter published by Tony Jaques, Director of Issue Outcomes Pty Ltd, for people who work in issue and crisis management.