Those of you who do not closely follow current culture, (or who may have spent the last weeks on a remote island somewhere) may not have heard that there was an incident at this year’s Academy Awards ceremony where the prize for the Best Picture was initially presented to the wrong team. According to news reports, the envelope for Best Actress was mistakenly given to the presenters by one of the two accountants from PricewaterhouseCoopers (now known as PwC) rather than the correct envelope. As a result, the Oscar for Best Picture was given to the team from La La Land rather than to the correct picture; Moonlight. Disbelief and dismay followed when the mistake was corrected after a significant delay.
This is, of course, a sad event for both of the great teams that made these pictures. The team that was responsible for making what was truly the best picture; Moonlight had their work overshadowed, at least in the short term, by the misdirected award, while the team from La La Land unnecessarily went from the very highest to the very lowest of emotions in a very short time. All concerned were exceedingly gracious about the mistake, but the affair has some obvious implications for both the Academy and for PwC.
There are also lessons in this unfortunate event for those of us who lead organizations that do important things for a living. Aside from the fascination of watching a car wreck happen in slow motion, when you look at what occurred through the lens of leadership, there are some interesting aspects to the incident and what reportedly occurred that could apply to a wide range of organizations and situations.
A team from PriceWaterhouseCoopers has handled the task of counting Oscar votes and keeping the winners secret for over 80 years. This effort, I expect, has developed into somewhat of a routine, and it is very likely that past successes had to some degree made the PwC team fairly confident in their process and in their ability to react if there were a mistake. In fact; when asked about the chance of a problem happening a few days prior, the PwC accountant who actually passed the incorrect envelope to the presenters was asked the procedure if an incorrect name was read, and responded: “We would make sure the correct person [or correct movie] was known very quickly. Whether that entails stopping the show, us walking onstage, us signaling to the stage manager – that is really a game-time decision, if something like that were to happen. Again, it’s so unlikely…”
However; one of the stage mangers for the presentation show reported that after the above interview, that accountant approached both Oscar show stage managers and asked if the answer he had given was indeed correct. Apparently he asked “Is that what we do?” The stage mangers replied “If you know who the winner is, you don’t need to check with each other. You need to immediately go out and rectify the situation, ideally before the wrong winners get to the mic.” And the accountant responded, “OK, good, that’s what we thought.”
In compliance with past practice, both of the accountants had brought a copy of all of the correct award announcement envelopes to the ceremony. Both had reportedly been briefed on a procedure to take if an incorrect envelope were passed out and both had been required to memorize the winners in each category.
What actually happened is that the presenter (in this case, Warren Beatty) opened the envelope he was given and saw that there was something irregular about the card inside. It not only had the name of a movie on it, but it had the name of an actress; which caused him to suspect he had been given the wrong envelope. He hesitated to announce the winner, and finally the other presenter; Fae Dunaway, read the card to the audience. The wrong winning team approached the podium, took the statuettes, and began to make their acceptance speeches. Two of the three producers of La La Land had completed their comments and the third was in the middle of his when the mistake was finally corrected. As best I can tell; more than five minutes passed from the time Warren Beatty suspected he had been given the wrong card to the point at which the mistake was corrected onstage. From the time that Dunaway announced La La Land had won the award until Moonlight was identified as the actual winner was more than two minutes.
Two minutes is a lifetime in an Oscar show. Reuters reported that the PwC accountants realized almost immediately after Dunaway made the announcement that a mistake had been made, but they failed to take timely corrective action and actually had to be pushed onstage. There were also suggestions that the accountants were distracted or had failed to comply with some established procedures; moments before the wrong envelope was passed to Beatty, the responsible accountant tweeted out a picture of Emma Stone in contravention to PwC procedures. The result was two failures; the first when the wrong envelope was introduced into the awards process, and the second when the PwC team was slow to recognize and slow to react to the mistake.
Aside from poor performance by individuals, a peripherally informed observer can draw some conclusions from organizational failures that are likely contributed to this set of mistakes. They serve as both a warning and a lesson to leaders whose organizations are engaged in high-risk but relatively simple tasks that are familiar, where complacency and habit present a real challenge.
Don’t Undertake Risky Tasks for Little Reward
In supporting this effort PwC was taking great risk for very little monetary return, probably expecting they would be able to use their role in a major public entertainment event as an advertising advantage. It is unlikely that PwC makes a significant amount of money for their role in presenting the results of the Oscar voting, and I do not suspect they see a huge uptick in companies bringing them business simply because they support this process. Most companies are well aware that the participation of PwC accountants in the ceremony is not directly related to the traditional roles and responsibilities of an accounting firm. Regardless, the PwC web page makes it clear that their support to the Oscars is a major element of pride as well as something that they leverage to advance their image. The company even makes it a point to take the envelopes to eleven different cities as they travel from Philadelphia to Los Angeles (even visiting Mexico City). This is an apparent attempt to expand the advertising effect of their role. Despite their efforts, it does not seem that this effort translates into a significant amount of business, at least in the entertainment industry, which represents less than 5% of the company’s annual sales. Even if the company does not lose this account as a result of this mistake, the public blow to their reputation has been significant. If PwC is like most companies, it is likely that no one scrutinized the risk-reward profile of doing a task they started sometime in the 1930’s. Don’t let your company do things simply because they have done them before.
Codify the Procedures for Responding in the Event of a Mistake and Rehearse Them
It is evident that, if there was a formal procedure to respond in case of a mistaken award, the PwC accountants responsible to make any necessary correction were unclear on them. It is reported that the evening prior to the awards ceremony they actually asked non-PwC employees how to react if there were a need. When presented with a process failure the PwC accountants froze. Humans who are working in a pressure-filled environment where negative outcomes are perceived as catastrophic are subject to being overwhelmed by the enormity of their situation, which is exactly what seems to have happened here. Proper rehearsal is critical to reacting effectively in these cases, and it is evident that it did not happen in this case.
Brainstorm on Both Success and Failure
One way to help overcome the challenge of complacency is to ensure your team conducts at least one brainstorming event that challenges them to identify what can go right and what can go wrong in any risky undertaking. They should work as a group to develop options to respond to both the consequences of everything going well as well as identifying and developing remedies for three or four of the most significant negative outcomes that the team could face. This kind of effort will help engage the minds of key team members and can go a long way toward overcoming any sense of complacency.
Get Everybody Involved in Preventing a Failure
If there actually was a formal, established PwC procedure that the company expected its team to apply in case of failure, it obviously did not include provisions to rely on a number of people who had key roles in this process. The presenters (who in this case, were the first ones with an opportunity to correct the mistake) and the show stage managers were obviously not enlisted prior to the ceremony to help prevent or correct mistakes. In fact, it seems apparent that one of the presenters knew there had been a mistake before it was made public, and at least a minute before the PwC employees were made aware of it. While there is an understandable need for secrecy in this kind of undertaking, there would have been little risk of compromise of the awardee information if these key participants had been included to help prevent and recover from issues.
Past Success Does Not Guarantee it in the Future
The simple fact that a process has worked a number of times before is no guarantee of future success. PwC teams had effectively supported the Oscars awards more than 80 times prior to this year’s ceremony. The company assigned exceptionally qualified and well experienced auditors to the mission. It appears this level of performance and the quality of the team may have, in fact, contributed to an attitude of inevitability or complacency on the part of the PwC organization. Senior management were clearly not keeping in mind that even events with a low probability of failure will likely experience that failure after enough repetitions have been conducted. Complacency is a problem, specifically because it is so difficult for the team involved in an undertaking to detect. It is a leader’s task to ensure that confidence does not degenerate into complacency and it is clear the PwC leadership did not take effective steps to ensure that did not happen in this year’s ceremony. In most cases; bringing in outside consultants or coaches is helpful to provide a new perspective and help the team understand where they have become complacent on critical missions. Regardless of how it is done; leaders have to ensure that the organization understands the risks associated with routine, but still risky, operations.
What are you doing to prevent complacency from putting your organization at risk? Share your thoughts int he comments below.
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