It has all the makings of a classic business school case study. The top leader of one of the world’s most prestigious institutions comes under attack, accused by current and former staffers for creating a culture of fear. He is sued by a former employee who, among other things, alleges that he is sleeping with his wife, a current employee.
The leader tenders his resignation, hoping that his decision to step down from the job may allow the institution to move forward without distraction. But the media attention in unrelenting, with negative stories appearing in newspapers all over the world.
What to do? Hire a public relations firm for damage control. That’s what Stanford Graduate School of Business Dean Garth Saloner has just done.
“His reputation’s been besmirched in ways that’s it’s going to be very difficult to repair,” says Paul Argenti, a corporate communications professor at the Dartmouth College Tuck School of Business who also advises firms on crisis management.
Well, if anyone can do anything, it’s the Edelman PR firm. The largest privately owned PR agency in the world, Edelman is currently representing the Saudi Arabia government as it manages crises over the impending crucifixion and beheading of a young political critic, and civilian deaths in the Saudi-led military intervention in Yemen. Edelman, highly regarded and highly priced, is now representing Saloner.
“Great PR firm,” Argenti pronounces. “It’s a blue-chip firm. It’s one of the best, if not the best, firms in the world.
SALONER PULLS OUT THE BIG GUN
“It makes perfect sense in some ways. In other ways it’s like taking an atom bomb and dropping it on a very, very small village in a teeny battle. It’s a very very big gun for (Saloner) to pull out.”
But this job may be too much for Edelman. Details of Saloner’s behavior that have emerged from a lawsuit and a divorce case have led not only to the dean being publicly mocked and vilified, but have revealed highly irregular decision-making, and a bitter staff revolt.
Saloner, citing the wrongful termination lawsuit by a former professor who alleges the dean railroaded him out of the business school while sleeping with his wife, announced his resignation last month, on the same day Poets&Quants published a lengthy expose based on the lawsuit and the professors’ divorce. The University and GSB are keeping Saloner on as dean until the end of the academic year, and then he’s to go back to being a professor.
Revelations about his affair with professor Deborah Gruenfeld, and decisions he made about Gruenfeld’s husband Jim Phills, have savaged Saloner’s image on multiple fronts. Masquerading as “Jeni Gee” for Facebook chats with his lover and sending her messages hinting at unbridled lust have made him an object of ridicule, eliciting innuendo such as an online poem rhyming the dean’s last name with an anatomical condition.
DAMAGE TO REPUTATION ON MULTIPLE FRONTS
Of more serious consequence, communications between Saloner and Gruenfeld, when combined with Saloner’s communications with GSB and Stanford staff and officials, show that he clearly failed to recuse himself from decisions about Phills after starting a relationship with Phills’s wife – a major professional misstep, whether or not he was motivated, as Phills alleges, by hostile intent.