BRAZIL-Lula's declaration

It ain’t necessarily so

The other day the  press quoted Lula as follows: “Starting now, if they arrest me I’ll become a hero. If they kill me I’ll become a martyr. And if they release me, I’ll become president again.”

Lula’s “error” is in considering only the three outcomes as inevitable and centered solelyon his ambition and his person. It is narcissistic in the extreme and does not consider the possible actions of the “Freudian other” nor the conditions under which any of the events could occur.

• Suppose, for example, he is arrested, tried and sentenced by irrefutable evidence that he violated the values of Brazilian society and ruined the lives of millions. The outcome might be that he becomes not a hero but rather a “goat”. 
• Suppose “they” don’t kill him but he dies anyway – a stroke, a heart attack, an accident - provoked by something unrelated to attacks on his person (e.g. smoking, drinking, a piano falls on his head, etc.). His “martyrdom” will not have occurred “for the cause” so the term “martyr” won’t apply. 
• Finally, suppose he is released, runs for president and loses.

In short, Lula presumes that events and people are subordinate to his designs for the natural world of politics, not the other way around.

That’s dangerous, hubristic thinking. It’s what led Adam to eat the fruit from the Tree of Knowledge to acquire the powers and knowledge of God. He did not count on simply being kicked out of Eden and having to work for a living! The Greek Gods reserved their worst punishments for those guilty of hubris.

Lula is facing a crisis and if the quote reflects his thinking and strategy for managing his crisis, he may be making a fatal mistake if he is not considering alternative scenarios.

As I wrote in a previous blog post on management, one of the most important questions in a decision-making situation involving risk is “why?” It is vital in crisis management.

“Why” does Lula consider only the three outcomes of the three possible incidents? What can go wrong with his scenarios? What other scenarios might he consider?

In day-to-day corporate management we all too often hear the response, “Because we’ve always done it this way! Check the files!” That may or may not be a valid response in the current situation. There is no precedent for the constellatioin of problems now facing Brazil so new solutions might be required.

Lula left office with a high popularity rating. That was 5 years and many incidents ago. He has possibly made the mistake that many populists make when confusing populism with popularity. 

Populists tend to presume that events and citizens are “subordinate” to their designs rather than “participants” in a plan. Many populists are also popular but the terms are not synonymous. They might be complementary. Or no, as conditions warrant. For example, Dilma is a populist and is certainly not popular.

Lula’s comments provide us with a valuable lesson in crisis management. He is clearly facing a crisis and has issued a statement that could come back to haunt him.

A crisis management team requires a specific set of skills and attributes the most important of which is to “think outside the box”.  Not every present set of circumstances will be sufficient to resolve the crisis. The team will have to anticipate the consequences of certain actions in a future time period and this means building various scenarios.

Consider the following summary of a full blown crisis management simulation exercise:

Case Study: A crisis simulation exercise

Incident simulated: The misalignment of a valve on a bottle filling machine caused the valve to strike the opening of the bottle and release small shards of glass into the liquid being injected. A consumer saw the shards and notified the press and the news went “viral”. The company learned of the incident from another concerned consumer and the press.

The management: The crisis management team concluded that the following immediate actions were required:

• Locate customers to obtain information re place of purchase, offer to exchange the faulty product with additional product added in to compensate for the incident;
• With the requisite information review distribution records to determine the origin, lot number, etc. of the bottle;
• Conduct a total recall of the product, lot numbers and shipping documents,  from the bottling unit in question and identify the misaligned valve;
• Advise the press that the problem had been identified and resolved and that anyone with a bottle with glass shards should immediately contact the company.
• Develop a follow-on communications strategy to protect the company’s reputation and as possible avoid financial liabilities
• This action immediately attracted the attention of the authorities so a plan had to be devised to determine what agencies and the regulating institutions that would have to be contacted. One was clearly the Ministry of Health.

(Please note that this is a very brief summaryof the actions reviewed and applied. As in all crisis situations, they were accompanied by a tremendous amount of confusion, phone calls, etc. that have been left out in the interest of brevity.)

Mistakes will be made: In the heat of the confusion of the acute stage of a crisis not every decision comes out as planned. Some are provided below for illustration:

• It was decided to have someone from the company make a public statement to assuage the anxiety of the consuming public. The spokesperson called for a press conference to state that the incident had been brought under control and that the glass shards were chemically inert and in the bottle did not present a health hazard. The intent was clear. No one would be poisoned by the incident. At that statement, a reporter (hired for the simulation exercise and not given any script but required to write an article as if he were going to publish it) came back with the question: “You mean it’s OK to find broken glass in one of your bottles?” I leave it to you to imagine the lead sentence of that guy’s article!
• A meeting was arranged with the (simulated) Minister of Health to explain the incident and what had been done and to try to assess what sanctions might be levied against the company. It so happened (in reality) that the current (real) Minister was an announced candidate for the Presidency of Brazil. He immediately realized the concern of the company and suggested that if he were to receive a campaign contribution he would ensure that the incident would be “properly handled” in his department. The company representative immediately rejected the Minister’s offer on the basis of existing compliance rules. No further dialog was possible. The mistake the representative made was not anticipating that approach from the Minister of Health. He should have developed an alternative strategy to keep up his sleeve. Politicians like money first, but they also like media exposure. He might have proposed that he would give the Minister reports on the management of the crisis that could be credited to the Minister. No bribe! Nothing illegal! And the Minister would be able to show his concern for the “people” and have numerous photo ops to his advantage. (That approach was taken in a real incident and worked extremely well!)

End Case Study Summary

This simulation exercise (conducted in real time and using real data with all units of the company) vividly illustrates the weakness of Lula’s approach. He considers only 1 outcome for each threat with no apparent concern for vulnerability-i.e. that something could change the expected outcome of the threat (e.g. being arrested).

We can conclude that Lula, purposely or not, seems to have left himself few options other than to confront the system. This, most certainly, can help your crisis management planning and your long-term strategic planning as well.

Lula’s strategy as initially presented depends almost exclusively on how much “firepower” he can bring to the “street”. 

On the 13^th two protests are scheduled in two different parts of town. One is for Dilma’s impeachment to take place on Av. Paulista and another in support of the PT in the center city. The size, noise level and rhetoric of each are likely to give you some idea of what might follow.

One of the biggest mistakes a self-inflated populist can make is to overestimate his “firepower” on the street. When bullets and billy clubs replace microphones and exalted rhetoric, a lot of things change. Support can diminish quickly.

The flip side of this situation is that tensions keep rising, the government has come to standstill, the economy likewise (except in a few more dynamic sectors) and a show of force is expected for the 13^th.

Analysis:

Now that we have looked at Lula’s initial statements and the declaration of his intended strategy, we can extend our scenario building to possible follow-on actions and assess the credibility of alternative threats. This is the essence of risk management. We must ask the question: “What if the initial approach doesn’t work?

First of all, what do we know about Lula?

We know that he is a consummate politician. Consequently, he is unlikely to close one door without opening another. He is highly likely to have one or several fallback positions. 

Consider a statement he is reported to have made yesterday to Senate President Renan Calheiros in which he noted that if he wanted to he could set Brazil on fire, but he is a man of peace and does not want to do that.

I have heard the same sort of statements from members of the Mob! Implicit in the conditional phrase “if I wanted to…” is the threat that he can and will if necessary. His following comment is that he is a man of peace contradicts his first comment with regard to his demand to confront and take to the streets. Since we have already considered the confrontation approach, it remains to see what other options might be available:

• Mobilization of Labor Unions: Lula’s experience as a union organizer in the 80s created a base for him in the labor movement. His tactics involved everything from walkouts and strikes to passive resistance. You should consider everything from “sabotage” of production and/or machinery and equipment to strike activity, threats to workers, etc. Make sure your first line supervision is on your side. After all, they are management.
• Mobilization of Members of the Foro de São Paulo: This might be a little more remote since it involves getting “outside” groups involved. However, it should not be discarded. This group could organize urban guerrilla operations not unlike those that characterized the IRA when attacking British interests in Ireland. Such actions could cause quite serious disruptions. It’s useful to remember that Dilma Rousseff and José Dirceu are quite familiar with urban guerrilla tactics.
• Mobilization of organized crime groups: The plethora of slum communities (favelas) in Brazil and the problems of street crime and drug traffic offer ample opportunity for fomenting fear and disruption.

The above are all “behind the scenes” tactics that could be used to suggest that opposing Lula and the PT can be “dangerous” as well as “wrong”.

You will need to evaluate the credibility of each threat and I suggest you consult some of the writings of Saul Alinsky with regard to community organizing to carry out your evaluation.

It’s entirely possible that none of the above would materialize, but proper risk management suggests that such actions (and whatever others you can think of) be analyzed in view of current tensions.