RFID Implants and Cancer

In a rush to prove their concepts and make money, companies often overlook information that is bound to return and blacken their eyes. The Associated Press reported this weekend that animal studies from the 1990s raised questions of whether RFID chips, implanted under the skin, could cause cancer:

"The transponders were the cause of the tumors," said Keith Johnson, a retired toxicologic pathologist, explaining in a phone interview the findings of a 1996 study he led at the Dow Chemical Co. in Midland, Mich.

Leading cancer specialists reviewed the research for The Associated Press and, while cautioning that animal test results do not necessarily apply to humans, said the findings troubled them. Some said they would not allow family members to receive implants, and all urged further research before the glass-encased transponders are widely implanted in people.

Share prices in VeriChip, which is in the business of creating microchips for identifying people, fell more than 11 percent yesterday, according to a New York Times article. What is amazing, to me, is the following section:

VeriChip said that it had not been aware of the studies cited in the report, according to the article, but both the company and federal regulators said yesterday that animal data had been considered in the review of the application to implant the chips in humans. They said that there were no controlled scientific studies linking the chips to cancer in dogs or cats and that lab rodents were more prone than humans or other animals to developing tumors from all types of injections.

Let's set aside, for the moment, the question of whether the RFID chips are actually dangerous or not. (I'd think that a cell phone would generate similar radio signals at significantly higher power levels.) Either VeriChip is lying about not having seen these studies, or it was grossly incompetent in not researching thoroughly enough to find them and consider how they might affect the company's strategy. In either case, this is a major business screw-up at the highest levels, and the ones paying for it are currently the investors.

Even if management decides to can a few people for not having turned up the information, did it commission an external review to find every potentially problematic study? If not, why not? If it did, will the company make that report public? The only way out of such problems is to come clean, and quickly. It will be interesting to see how VeriChip's management handles this. So far, it hasn't looked promising.

When Cleaning House Isn't Reform

The New York Times article about executives being fired for outrageous behavior may seem like the beginning of a new responsibility in corporations, but I don't think that it is. If it were, you'd see more executives sent packing when their bahavior came to light internally. But these are always high-profile scandals - that is to say, the corporations are always in reaction to public rebuke. Individuals are, of course, to blame for their own actions, but what sort of business culture permits or even, at times, encourages such behavior? Boards of directors should be setting the tone, instilling values, and insisting on them, even if no one else is looking.

University PR and Twists of Fate

I was speaking yesterday with a marketing and PR person at a writing convention. This man is essentially responsible for a good aprt of the topics and guests on television and radio shows, because he publishes a directory of potential experts and guests for the industry. He said something that tell a lot about the country, public perception, and business. Remember what happened last week, before the Virginia Tech shootings? If you mentioned universities the talk would have been of financial aid personnel taking kickbacks from sources of money. Or, and I'll add this one in, it might have been of universities complaining about the school listings of U.S. News & World Report (and a disclaimer, I've written for the publication a few times in the past). In either case, schools did not seem like candidates for sympathy or public concern. Now they're nothing but.

Companies often try to cover up problems they have, but for the vast majority of these issues, that's pointless and damaging, as any expert in crisis communications would tell you. They may have various theories, but it really comes down to a) if you start doing the right thing, people stop being so harsh, and b) when you cover up, you extend the life of teh story. If you don't extend the story life, something else will come along to push it out of the headlines. It's another case where the right thing is also the smart thing.