The engineering approach to controversy: silence

August 11, 2007

Veco, a 4000 employee international engineering and construction firm headquartered in Alaska, finds itself at a brewing storm of national significance. Senator Ted Stevens, the longest serving Republican in the Senate with 39 years as a Senator from Alaska behind him is being investigated for corruption. The specific concern seems to be whether or not his home remodeling project was paid for in part by Veco, who could gain from the Senator’s efforts to expand oil production activity in Alaska. Apparently, according to the Economist, the project manager for the Senator’s remodel project was the founder and Chairman of Veco, Bill Allen.

This is the same highly respected senior executive in Alaska who pleaded guilty, along with his VP Rick Smith, to charges of bribery in May of this year.

Having some interest in this company (I did some minor marketing work for them in the past and they have a strong presence in my community) I decided to see how they were communicating about this swirl of controversy and a very serious reputation management problem. Nothing. Yes, there was an old press release from May announcing Mr. Allen’s retirement. But it was attributed to his age and “the events of the last several months” without any reference to what those events might be. This press release also announced that Mr. Allen’s daughter had assumed his role as Chairman. In the light of the comment on the company’s website: “Values are important at VECO. We are committed to a culture that promotes safety and protects the environment” this lack of distancing and obvious strong connection to a now thoroughly discredited leader is troubling. Particularly without any context or explanation.

Then I read that in June 2007, the company was purchased by CH2MHill, the highly respected engineering firm headquartered in Denver. I read the press release about the acquisition. Nope, no reference to the troubles that led to what was undoubtedly a bailout and a protection against complete collapse. Given the international publicity about Steven’s inquiry, it seems that the venerable CH2MHill has adopted a significant reputation issue without giving the slightest indication publicly that they are aware of the hornet’s nest they now own.

I’m not sure about all of this to tell the truth. Mr. Allen, the chairman of a huge engineering firm serving as Senator Steven’s own personal remodeling project manager? Come on. But, what are they to say? I expect more openness and communication from the company–old and new owner as well, but is that smart or realistic. I’m not sure. One thing for certain, their closed position on this is not what I would call transparent communication. Certainly, I would hope they are doing an excellent job of communication privately with customers, employees, industry leaders, other government officials, etc. I hope so. But something tells me that a company or companies who treat such a significant issue in the public eye with such stoic silence is probably also not going to be too progressive or active in communicating with key stakeholders.

All I can say is that based on this, if I was an employee I would be very concerned. If I was a valued customer and this indicates the communication from the company, I’d be looking for a new engineering supplier. And if I was a new customer and had even the minimal level of knowledge about what was going on as I do, I’d never give them a second chance. That is the real price of such silence and lack of transparency.

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