The Q&A: "I cannot believe the idiotic things that people do. Mostly men."

Jaime Watt, Canada's leading crisis advisor, on everything that can go wrong at your company. Sex is a big one.

Jaime Watt, in a screen grab from our interview

Jaime Watt is the chairman and founder of Navigator (actual slogan: “When You Can’t Afford to Lose”). Which means he’s who people call if they’re prominent and in big trouble. His bio calls him “Canada’s leading high-stakes communications strategist” and his friend Rob Prichard, the blue-chip Toronto lawyer who was president of the University of Toronto, calls him “Canada’s pre-eminent crisis advisor.” Some people call him other things, because assumptions about his clients have a way of swimming upstream to the advisor, but he’s OK with that as long as people call.

There’s always been much more to Watt than the caricature. He’s been on a bunch of non-profit boards, including these days the Shaw Festival, and he’s the Chancellor of OCADU, the Toronto fine-arts university.

This year he stepped back from his CEO role to more of a board function, following some protracted health challenges. So it’s fitting that his new book, Director’s Crisis Playbook, gives advice to corporate directors about how to handle the worst things that can happen to a company.

When we finished the interview, Watt gave me a promo code that my subscribers can use for a discount when they order the book. I’ve tucked it below a paywall at the end of this interview, which has been edited for length and clarity.

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Paul Wells: You charge good money for your services. Why would you write a book?

Jaime Watt: Years ago, I lived in London, Ontario, and there was one white-tablecloth, fancy restaurant there. It was called Auberge du Petit Prince. Those were in the days when the Wednesday edition of the newspaper was the food day, and it had all kinds of circulars and recipes. Chris [the chef] would always put his recipes in the paper. I said to him, “You charge a fortune, and your restaurant is the sort of place you might go once or twice a year. Why on earth would you put your recipe in the newspaper?” And he said: “Because you still have to know how to cook.”

The truth is, anybody who’s going to swipe it all and not hire us was never going to come to us anyway. They were never going to pay our fees or be part of what we do. Most of the people that are going to hire us read the book and go, “Holy moly, this guy knows a lot more about this than I do. We better hire them.” I get your question asked regularly, but I think we’re in good shape. And although a few people want to steal it all, and I know who they are — we’re fulfilling [the book orders] ourselves — so I know who’s buying it, and some of my competitors are buying it too. So we’ll see how that goes.

PW: In the book’s introduction, Rob Prichard, who is a lawyer, a former University of Toronto president, all-around smart guy, calls you what almost anyone would call you, which is Canada’s preeminent crisis advisor. That can’t have been what you wanted to do when you were 12. How does one become even a middling crisis advisor, let alone the preeminent one?

Watt: I think if you ask many professionals who started out one way, and then their practice, you know, went a little bit to the left, a little bit to the right, I’m sort of that kind of guy. I was in the communications business for a long time. I had my midlife crisis, and I wasn’t really interested in doing it for another 25 or 30 years. But at the same time, if I completely switched what I was doing, I would have not made very much money, and that wasn’t satisfactory to me either. So, I thought about how I could do it, because I’d always wanted to do the kind of high-stakes crisis communications at the CEO, or C-suite, or board level, where there were really tricky, messy problems. And that’s what interested me. And so, I began figuring out how I might do that.

The other thing, though, that I really haven’t talked about before, but has been a big thing in my life is that when I was two and a half years old, I was diagnosed with Legg-Perthes disease. From two-and-a-half till seven, I wore a big brace on my leg. I wasn’t able to do what other kids did, and I got horribly bullied. I was horribly bullied for a very long period of time. I don’t like bullies. And now that I can have the resources to fight back, that’s something I do a lot. We give away a huge amount of our work.

The fact that I don’t like bullies gave rise to the crisis work we do. The other thing that happens is that if you do one or two jobs well, then all of a sudden you get more offers and more work. And I just love it. It’s great for people with a short attention span. It’s great because it starts and finishes fairly quickly. And I like the intellectual challenge of coming to the office and thinking, “You’re going to talk to Paul Wells today,” and all of a sudden something has completely blown up, and you do something completely different. You have to really dig in.

When we hire people here they have to have three qualities. They have to know how to write, which unfortunately is a talent we’re finding in fewer and fewer people. The second thing they have to have is a widespread intellect. We used to say you have to read the whole newspaper, but of course we consume information differently now. The idea behind that is that you don’t have to know every detail of the World Series, but you bloody well have to know that it’s on, and you have to know who’s playing in it because you never know what will come through the door. The third thing is they need stamina. Stamina is not related to age, but if you think you’re going out to the opera or whatever tonight, and something comes through the door… and you’re in the office till 3 in the morning… That’s what we like around this place.

PW: I want to spend most of our time talking about the meat of this book, but I want to just ask you right out about the sort of caricature reputation that Navigator has, and that you have. You’ll have seen it many more times than I have, on Twitter or whatever: That the people you represent are powerful. And they’ve screwed up. And they’re going straight to hell. And the only thing Jaime Watt does is slow them down, so what good is he? What do you make of that sort of caricature?

Watt: We get that a lot, and it’s a bit of an occupational hazard that we have to endure. We have gotten better than we were at the beginning in choosing who we represent and who we say no to. We say no to an awful lot of people. I like to say that we’re happy to represent good people who a bad thing happens to, but we don’t represent bad people. We have a couple times, and we’ll never do that again. We have processes in place that stop that from happening. The people we do represent are entitled to a fair shake, and we think they’re entitled to have people hear their story. And then people will make their own decision about where they sit.

PW: This book is directed at corporate directors, which, right off the bat, made me think a little bit about what the role of a director in a company is. As you point out, they spend an awful lot less time focused on the operations of the company than the management does. And yet, they’re kind of guardians of the existential. The reputation of the company and its ability to endure are responsibilities of the board. Do you think most board members understand that when they get into these gigs?

Watt: Not well enough. I’ve been teaching in the Directors Certification Program for more than a dozen years, and it’s now virtually unanimously agreed upon that boards own risk, and they own reputation. And risk doesn’t just mean financial risk, right? Like, what happens if your ship gets stuck in the Strait of Hormuz? It means reputation as well, and that sits squarely in the domain of the directors.

The other thing that happens to directors is everybody and their cat wants to be a director these days. But if you pick the wrong board, that can damage your reputation. A couple of years ago now, one board went through a lot of difficulty because they had a VOLTS trading scandal that didn’t go very well. And a couple of those directors on that board were asked to leave other boards that they sat on. So you’ve got to be very careful about what happens to your reputation.

One of the things I observed was that there’s tons of books written on what executives should do when a crisis strikes. But nobody had written a book on what directors should do. We took our four-hour lecture that we do at Rotman [School of Management], and we used that as the beginning of the book. We thought we could produce something that would be useful to people who are directors. That’s why it’s called a playbook, right? It’s meant to be a playbook, an instruction guide, something that you can use.

PW: Near the beginning, you say there’s almost no point just buying this book and putting it on the shelf for when trouble happens. You have to have thought in detail about the trouble before it begins…

Watt: Yes. One hundred per cent of the time, when you do a forensic review of what happened, the more planning that was done, the better the result. One hundred per cent of the time. That means something that is continuously updated on a yearly basis. It doesn’t mean it’s a huge effort. You set out, and you build a plan and then every year, you take 15 minutes on the board, you have some pre-read, you have a look at what needs to be updated, and then you get on with the other items. I mean, people who want to make a meal of it every year are not being reasonable.

The problem you have is that I can’t count how many times the sky has fallen in and everything’s a disaster, and I ask: Have you got a plan that we could look at? “Oh, yeah, we do!” And I say, well, could you get it? And first of all, it takes them a while to find it, and then they bring it out, and it was done for Y2K. Remember that? I have colleagues at Navigator who are younger than Y2K. So that just doesn’t do any good.

We don’t fully understand why planning works as well as it does, but there’s something about the alchemy of going through that exercise and trying it out that actually produces a good result. It’s funny, because the one thing you know for certain is that you ain’t gonna use very much of what’s in that plan, because your ability to predict is fairly guarded. What it does do, though, is it takes a lot of the mundane stuff, like getting phone numbers for people and that sort of thing. I don’t know how many times there’s been a crisis in the summertime, and everybody’s at the lake, or wherever, and you can’t get a hold of them, and hours go by, and people get pissed off, and it’s a disaster.

One thing you can do is you can get the basics, including a decision-making approach. Who has to be in the room to make a decision? Because you’re probably not going to get everybody as quickly as you would like. So, if these five people are together, is it okay to go to the next level? Planning that decision-making is pretty important. I like to say that a crisis is no time to decide how you’re going to deal with a crisis.

The other thing that I talk about in the book that’s helpful is that there are basically three kinds of crises. The first one is one you can predict, and that would be things that are germane to what you do for a living. So, if you fly a plane, you… I mean, it doesn’t take a genius to figure out you’re likely to be in a plane crash. If you prepare foods, you’re going to have food poisoning. Those are things you can predict and figuring out how you handle those in advance is a good use of time.

PW: Are people ever paradoxically reluctant to think about the thing that is likeliest to go wrong? Like, food companies that really don’t want to think about serving bad food?

Watt: All the time. That’s one of our skills: getting people to face up to the really gory things that could go wrong. For the most part, they’re pretty good on the basic things that go wrong, but where they’re not good, is on facing up to, for example, workplace fatality or theft from a very senior person who they’ve put a lot of time and trust in, or, things like that. They just don’t want to go there. That’s the time when whoever your advisor is, needs to clear the room and have a one-on-one discussion and say, “We ought to talk about something that’s kind of tough. I know you don’t really want to talk about it. But we have to know. Because if this ever happened, it would be existential to your business and we need to be ready for that.”

PW: So, you’ve got three classes of problems. One is the obvious thing goes wrong: I make boats, and my boats start to sink.

The second thing is human failing — with sex maybe near the top?

Watt: No, no, at the top. A thousand times in ten, problems are caused by lust, and to this day, I cannot believe the idiotic things that people do. Mostly men. Though not exclusively. It’s insane, and there’s no explaining it, and there’s no predicting it, and there’s no getting ready for it. But, you know, my joke is: As long as men have penises, we’ll have work.

PW: And then the third one is sort of “today’s crazy world”, which includes values-driven boycotts. It includes all the things that can go wrong this year that we never thought of 10 years ago.

Watt: Or even last year.

PW: How on earth do you plan for that?

Watt: Well, first of all, you have to have a little bit of a long-range radar… and that’s one of the things that consultants can do for you. They can watch the opinion marketplace, and what’s being said, and how people are being treated, and what people are being charged for criminally that they weren’t before. They can look at what’s happening in the civil courts, what the media is interested in that they didn’t give a hoot about a couple of years ago. It’s a very inexact science. We’re using AI to try and predict some of that, but it’s still pretty rough, because AI is not as good at looking forward as it is at analyzing what’s happened in the past.

It’s tough because senior executives often have a hard time grasping the idea that something is going to be a big deal that hasn’t been in the past. A good example of that is when Harvey Weinstein was arrested. The Canadian media was determined to find a Canadian Harvey Weinstein. They had five on their list. I know that because four of them were in my office. We don’t represent men in that situation, we represent the institution. They found one, and the client was just beside himself, that they could have this kind of coverage.

Another example was the St. Michael’s College school scandal — which I didn’t act on because they didn’t like my advice. But they just couldn’t believe that this was front page of the newspaper, above the fold, in every paper daily across the country, and on the national newscast for a whole week until it was pushed off by something else. Those are hard to prepare for and figure out

.PW: I work in Ottawa and what I’ve seen is that when there’s trouble, the first instinct that people have is to button up and deny that there’s a problem, or say the absolute arithmetic minimum that it’s possible to say about the problem. You counsel pretty strongly against that instinct.

Watt: We do, but we do that from a particularly thoughtful perspective. First of all, our belief is that everything gets out eventually. We live in a world today where people think that they can hide things, which is a very unrealistic stance to take. The second thing we believe is that the average Canadian doesn’t have a lot of time for any of these issues. So the first thing they hear about tends to be the one that is branded into them, and is very difficult to move. It takes an enormous amount of money and good luck to get people off a position they’ve adopted, and those positions come from what they’ve heard first.

So our view is that it’s very important to go first, and to get whatever the issue is out, and then take it from there. A good example is Mark Wiseman who got into some difficulty and got fired from his job, and he came to see us. And, by the way, he encourages us to talk about it, so we’re not violating any confidence. He got fired from his job, and was very happy that the company had agreed to keep the whole matter silent. I counseled him to say that we’re going to confess to the affair, which had all kinds of complications. But our advice was based on the fact that if he apologized for what he did wrong, people would understand that and be forgiving. And if he kept silent, people would conclude that the only reason Mark Wiseman would get fired from his job was that he did some financial shenanigans, which was actually very important, right? The Europeans didn’t care, the Japanese didn’t care, some Americans did… but that was a very good example of someone being able to completely recover by managing the place they found themselves in with some strategy.

PW: So, the lesson from that is, if you don’t tell people what’s going on, they’ll imagine something even worse.

Watt: Always, always, always. You know, in about 45 years, we’ve had a straight-line diminution in the confidence that Canadians have in institutions of all kinds— big business, banks, churches, government, whatever. When you leave space for them, they no longer believe that you’re trying to get things right. They think you’re up to no good, and you’re cooking the books, or whatever. And that is death, right? If Mark had been accused of some kind of financial shenanigans, then he would have had no chance to recover his reputation. He just did something dumb and he apologized for it.

PW: Later in the book, you list 10 rules, or 10 principles of effective crisis management. What are some of your favorite tips from that?

Watt: You’re better to be early and wrong than late and right. An example of that is a cyber breach. It’s no longer a case of if you’re going to experience a cyber breach, it’s a case of when you’re going to experience a cyber breach. What commonly happens with these things is that the CEO calls everybody in, and the IT people are working on [the breach], and they say, “Well, we’re not sure, but we think that by noon we’ll have something.” Everybody scampers away, and they come back at noon. “No, we still don’t have anything, but we think for sure it’s 50,000 files. But we’ll know at the end of the day.” At the end of the day, they still don’t know, and they come back in the morning, and they still don’t know, and the CEO loses her mind, so she calls outside consultants. They come in, and we rinse and repeat on this, and we’re all going crazy.

On the evidence of data from surveys, we’ve found that you’re better to come out in the morning and say something like: “I’ve been advised that we’ve had a cyber breach. We think, as of this moment, that it affects 50,000, files, but we don’t know, and we’ll get back to you when we know more.” If you come back a week later, and it’s 250,000 files, you pay no price for that. You’re much better off to be early and wrong.

PW: What about the one that “There always has to be a reason?”

Watt: What sits behind that is, the idea that if people understand the reason, they calm down. For example, if the bank was robbed because the back door was unlocked, and we’ve now got a new system that automatically locks the door, then people calm down. If they understand why it happened, then they’re very good at moving on. If they don’t understand, then it’s a problem.

PW: You say that you keep going into companies and you find that they have been reluctant to address the obvious problem. But do you ever find companies that are just gold standard?

Watt: Absolutely. Some of the big publicly traded companies in Canada are terrific. They’ve got reporting obligations to various regulatory authorities, which they understand well, and, they are usually well prepared — not perfectly prepared, obviously — but they’re usually very well prepared and understand what has to be done.

Now, the book feels, I know, at points, like it’s an advertisement for our services, and it’s not meant to be that. It is meant to be an advertisement for outside counsel. Remember a few years ago when Volkswagen had that whole diesel scandal. The CFO of Volkswagen said that it’s an inappropriate use of shareholders’ money to have all of that expertise in-house in a company where it probably won’t even be used once in a generation. We agree with that. We think that when these things happen, if you’ve got a relationship with reputation advisors, you’re in good shape.

It’s also a time where directors really earn their money because they sit in a very unique position. We’ve got management, which has deep vertical knowledge of the business, and we have crisis managers that have deep knowledge of crisis response. But the directors have deep knowledge of the company, and they also have deep understanding of the sector in which they’re operating. They know what the competitive landscape looks like. They know where they sit vis-à-vis the other competitors. They know what the order book looks like. They’ve got a deep understanding of the business, and yet they don’t report to the CEO. They’re sitting above the CEO.

PW: Near the end of the book, there’s a bunch of case studies of famous reputational risk crises. I felt like it must be almost a relief to tell some of those stories because you hear from companies and from individuals that are in the biggest trouble of their life, and you have to keep most of that bottled up. Is there a conflict between your professional responsibilities and the deep human need to dish about all of this stuff?

Watt: I don’t know how many publishers I’ve had who want me to write the book that I’m never going to write. [The one] with all the secrets. But we are a Swiss vault here— or more of a confessional, I guess— and we’ve just had to learn to live with that. We talk about it ourselves, but we just can’t talk about it anywhere else. It’s particularly frustrating when we’ve really pulled off a miracle where we’ve been able to get a terrific result for the client, and we can’t tell anybody. You’re right, it’s a frustrating place to be, because it would help us deal with the fact that we don’t only act for the big newsmakers or whatever. We help others. It would help us deal with that problem if we could say, “Oh, by the way, we did all these other files as well.” But we can’t.