In the days before email, someone at a company where I worked inadvertently pushed the wrong speed-dial number on a fax machine. Instead of faxing a draft press release to outside counsel, he sent the release to a newspaper reporter who covered the company as part of his beat.

It was fear of this kind of all-too-human mistake that led attorneys in organizations everywhere to resist the introduction of fax machines to the workplace. The same paranoia accompanied earlier communication technologies, including photocopiers and telephones.

More recently, lawyers lobbied against email, worried about the ease with which company-confidential information could escape the ever more porous walls of the organization. There is good reason for lawyers to worry. More than one email has been sent mistakenly to external addresses from within IBM, one about a switch to Linux for employee desktops, another from an executive telling employees about the company’s woes. There are hundreds of such stories from companies, but few as chilling as the tale plaguing Carat, a media agency owned by Aegis Group, as reported yesterday in AdvertisingAge.

Faced with an impending round of layoffs, Carat’s HR staff prepared an email for those tasked with notifying affecting employees. The email was accompanied by PowerPoint and Word attachments that covered key talking points for those to be laid off, those remaining, clients and vendors. The email also telegraphs the extent of the layoffs by talking about consolidation of business units, although actual numbers aren’t included.

Rather than send the email to the intended audience of senior managers, though, the company’s top HR executive inadvertently sent it to all employees.

The AdAge piece will give you all the details about the layoff itself, along with a quote from John Hollon, editor of Workforce Management (an AdAge sister publication), who said:

It seems to me the issue here is one of a dumb, stupid error that just about everyone who uses e-mail does from time to time. You would think that the chief people officer would be more careful given their position in the company—a reasonable assumption to make—but that’s not always the case. Owning up to the problem, apologizing and emphasizing it was a terrible mistake won’t solve this or make it better but can go a long way toward getting beyond it quickly.
Still, if I were the CEO, I might want to start looking for a new chief people officer. You pay those people to step up in these situations, not make it worse.

Over on David Murray’s blog, comments revolve around whether it makes sense for Carat to can Rose Zory, the chief people officer. On the one hand, it seems like a PR move designed to pacify without really addressing the issue. On the other hand, as one commenter put it, “I still really question how effective that HR person will/can be moving forward after a fiasco like this.”

(I learned about the story from a reader who read about it on David’s blog.)

A series of questions beyond that of Rose’s fate arise from Carat’s unfortunate experience, key among them…

• How do you deal with layoffs now that employees have had sneak peeks at all the layoff materials?
• How do you handle the reputational damage outside the organization?
• What steps do you take to minimize the risk of this happening again?

The first decision the company should make is to take the hits. Being defensive won’t help. Admit this was a horrible mistake and just deal with—even agree with—the criticism.

Next, acknowledge that nothing is going to fix the situation. It will take time—and positive action—to rebuild the company’s damaged reputation.

Be utterly transparent about all this. No equivocation, no hunkering down. Admit and elaborate on plans that were exposed in the email, even if your original intent was to keep them quiet.

Dealing with employees is tougher, but not impossible. An apology from the highest levels of the organization is a good start, followed by a conversation about how the process for managing the layoff unfolded. There’s not much you can do for employees who will lose their jobs, but plenty for those who are staying, including becoming more open in your ongoing communication with them about the state of the business and the forces at work on the organization, as well as the previously-hidden internal workings of HR. Employees are never surprised by a layoff when they work for companies that keep them well informed.

Finally, don’t jerk that knee and restrict the ability to send email. Rose’s mistake was a bad one, but it was a mistake. Organizations are made up of humans; we are all inherently imperfect. I doubt there’s even a need to reinforce the need to be careful when pushing that “send” button—no message could be stronger than the one that has already been sent.

If you were counseling Carat, what advice would you have?