Sustaining Lesson from HP vs. Mark Hurd: Perception Can Get You Fired - Page 2

Rob Enderle

Larry Ellison's Risk

Larry Ellison has a history of dating employees, which makes any sexual harassment action against Larry an almost sure-thing regardless of whether he did it or not. Now, let's assume the young lady also alleged that he leaked information on the acquisition of one of several companies while he was romancing her. If Larry claimed he was innocent, would his board really believe him, given his history? Would you? And if you didn't believe he wasn't having an affair, would you also not believe that he didn't leak information on an acquisition? Now, if you didn't believe either, and documented your deliberations with other board members as the HP board did-and boards typically do-wouldn't you have the same risks the HP board did and be motivated to fire Larry? Larry already had one really close call and he survived it but he might not survive the next. He got really upset with a Fortune writer who forgot to point out that he had won the case and the woman had gone to jail. The original story, which implies that affairs with employees are a kind of rite of passage for CEOs, dovetails with my own beliefs about bad practices in Silicon Valley with regard to sex with a subordinate.

Realize that Larry doesn't even have to do anything wrong; his background has set up a situation where if he spends an extended period of time unsupervised with a woman he could get fired if that woman gets a little greedy and actually thinks out the scam ahead of time. In fact, he could be blackmailed for the rest of his life against this threat and there are people that are this cunning.

His letters to The New York Times, his hiring of Hurd and his attacks on HP are likely all tied back to his very real concern that if his board believes the same way HP's board does, it is only a matter of time before he gets shot like Hurd did. It may never actually happen, but worrying about it likely keeps Larry up nights. It would me. It may be too late for Larry to undo his history, but it isn't too late for us to learn from his mistakes.

Wrapping Up: Sustaining Lesson

People who don't understand marketing often don't understand that reality really doesn't matter in situations like this, only perception matters. Even in a trial, the jury and judge work off of the perception of the tried event created in the court room. If you create the perception that you committed a crime, like Hurd did through his actions, it doesn't matter that you did or didn't actually do it. In the eyes of those that count, you are guilty. Hurd was fired because he didn't maintain the perception of innocence and Ellison doesn't even have what Hurd had in that regard.

So the lesson here for the rest of us is to avoid activities that make us look bad. Using company funds for questionable activities, accepting gifts from contractors and hanging out with subordinates of the opposite sex in romantic places, regardless of whether they can be justified, look bad and can end a career. The risk is simply not worth it. If guys like Mark Hurd and Larry Ellison can be put at risk, you can as well.

"Avoid the appearance of evil" was advice from my grandmother, and even though it was a misquote, I still think it is good advice to live by.

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