Thursday, June 03, 2010
Warren Buffet is a shrewd investor, but he is also a leader with the right instincts. He understands that it is good internal PR to support your employees when they are targets for criticism and sacrificial lambs. It would have been easy for Buffet to say the CEO of Moody's deserved to be fired for the ratings service's failures. It would have been easy for Buffet to press for the firing. He didn't take either step. One can criticize this as protecting your own at the expense of others, but Buffet acknowledged that the ratings agency had made mistakes. He didn't avoid the facts but he did try to put them in perspective -- a view that was too facile, perhaps. Moody's won't make the mistake again. It was disastrous enough the first time, and the managers who are there will guard against over-optimism in the future. Good internal PR has positive outcomes.