I just finished reading Robert Scoble's electric rail analogy when it comes to the line that was recently crossed (in terms of privacy violation) and started to think about how, HP board chairwoman Patricia Dunn is trying to draw her own line between the investigation she ordered and the methods that were used to get the results she was asking for. Apparently, in her book, she deserves to keep her job because ordering such an investigation is OK and it's the investigators' heads that should roll for using the highly dubious technique of pre-texting to complete their investigation. "Oh, the shock. The horror. The investigators I hired to uncover information that's not readily available did what?" Scoble has been screaming for Dunn's head on a silver platter. During the Dan & David show last week, my colleague Dan Farber rightfully said it doesn't matter whether she knew or not. She's accountable.
I'm having a tough time believing she didn't know what her hired guns were up to. When I come across information that's considered to be confidential (this happens to the press from time to time), one of my first questions is "where did you get this from?" Ms. Dunn is a pretty smart lady. But she's currently in a no-win situation. If she knew something and she's not telling the truth, the truth will come out. If she didn't know anything, then that's just as damning. Here, we have a person who clawed their way from a secretary's job to one of the most powerful positions in one of the world's largest IT companies, and she never held a meeting with the investigators to go over "the plan" or the results. I'm sorry. Maybe she really is the ultimate delegator. But with a project of this sensitive nature, you don't just make a few phone calls, delegate, and tell the people to get back to you. Not if you're the sort of person that come from where Dunn has come from. There's more to this story that's not being told.
But, forgetting for a minute what is right, what is wrong and who knew what and when they knew it, "PatriciaGate" as some are calling it already raises another question. I'm reminded of how, at first, it was just a handful of companies that were outted for backdating stock options (one of which was ZDNet's parent CNET). But, as time went on, the practice turned out to be rather common (involving over 100 companies) despite the fact that anybody and everybody who was involved had to have known in their heart that something wasn't right about it if it wasn't being disclosed (the practice is legal as long as it's publicly disclosed but even that seems odd because of how its the same as printing money). I'm not a stock whiz. But I know enough to know that "the system" is designed to prevent insiders from getting an unfair advantage over outside investors and I know of no one involved in any sort of stock trading that doesn't sense when insiders may have such an advantage.
So, here's my question: where else is (or has) pre-texting happening/happened? I estimate the chances that similar inquisitions have been conducted at other companies at about, oh, 100 percent. Two powerful incentives -- money and blood -- routinely motivate people to do stupid things (while putting the blinders on right around the time it's appropriate to do so). Dunn smelled blood and deputized someone to get it. Then, if we're to believe her, they went out and got that blood without telling her how. We'd be idiots to assume that investigations just like this one (involving third party investigators to keep executives at a healthy distance) aren't being ordered all the time and that those investigators aren't stooping to unscrupulous means in order to get paid. Knowing what I know now about pre-texting, it's clearly easy money if you're an investigator. So easy, it has its own name (cool productive techniques need short-hand like that so everybody can talk about it). And just like all the questionable executive practices that came before this episode (the ones that land people in the cross-hairs of the SEC's lawyers), the behavior continues until someone pays the ultimate price.
That's why I like Scoble's punchline:
Note: the electric rail doesn’t care if you have a reason to touch it. You touch it, you pay severe consequences. Why does that need to be true? So no other company thinks of touching it in the future.
Bug zapper anyone?