Posted in October 2012

“Human Error” Avoidance: the Google Earnings Misfire

Julie Meadows-Keefe

Julie Meadows-Keefe

“Human Error” Avoidance: the Google Earnings Misfire

 

Google rules the world. As someone who teaches companies and individuals about crisis communication, I followed with interest this weeks as Google shares were halted from trading on the NASDAQ due to an early release of earnings.  I waited for the Investor conference call to air on CNBC to see how Google would communicate about it.  Notably, very early in the call, the Director of Investor relations introduced CEO Larry Page.  Mr. Page has been keeping a low profile recently due to an unspecified illness.  In spite of having a hoarse voice, Mr. Page did get on the call to address the earnings report.  He apologized for the “scramble on release” of the earnings report.   He indicated that the “printers” sent them out early as a result of “human error”.  This referred to how earlier in the morning, RR Donnelley, the financial printer advised Google that they had filed Google’s 8k earnings statement without authorization.  Mr. Page then quickly moved things forward, stating that revenue was up 45%  year on year and that this is “not bad” for a teenaged company only fourteen years old. He went on to discuss the simultaneous disruption and opportunity that has been brought about by the abundance of mobile devices.  The challenge Google faces moving forward are monetizing mobile ads and devices as users shift away from pc’s.  There are currently ½ billion androids in the world.  1.3 million Androids are being added each day. Google shareholders were unpleasantly shocked to find out that at one time today, their stock had lost approximately 10% of its value.   Google and its financial printer RR Donnelley face both financial and reputational harm from today’s misfire.

 I see a few things that Google did well today:

 

  • It brought out CEO Larry Page after a period of illness-related absence to directly address the concerns related both to the premature release of the report and to the contents of the report itself.  Google utilized Mr. Page even though his voice was hoarse.
  • Mr. Page addressed it first thing.
  • Mr. Page emphasized how well Google is positioned to meet future challenges.

Google stock recommenced trading prior to the end of the business day.

 

A few things seemed to be missing:

 

  • Too much time elapsed from when the stock stopped trading to when it resumed trading, giving pundits and analysts opportunity to speculate.
  • Google did not seem to be out in front of the issue.
  • Google seemed too quick to blame RR Donnelley and did not own ultimate responsibility for when its own earnings report was released.

Google did not outline steps to demonstrate how it will avoid this in the future.

 

Observing this situation with Google unfold this week on cable and via the web demonstrated to me the following:

 

  • Even in an environment where computer glitches, viruses and even malicious cyber terror can and do sabotage companies, there is a still an active role for humans to take in making mistakes.
  • Human error will always be a variable, but processes can be put in place to reduce their likelihood.
  • When approaching a crucial deadline, there can never be enough communication and verification that everyone knows what role they are playing at what time.
  • There is a communication strategy in place in case something goes wrong.
  • The event is analyzed to identify exactly what happened and what will be done to assure that lessons are learned and the mistake is not repeated.
  • If a mistake like this can happen to a company like Google, it becomes even more important for smaller organizations to have policies and procedures in place to execute required tasks.

 

Google is a dominant global brand that is trusted and brings enormous value to both its users and investors.  This “glitch” will most likely soon be forgotten and the company will continue to be a global leader as it extracts lessons-learned and moves forward into a world that it has impacted perhaps more than any other company has before.

 

Please contact me @julie@esq140.com if you have questions about crisis communication and management.  Learn more about me here.

 

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