ProPublica shines harsh light on AT&T-ization of American Red Cross

A Red Cross van is parked on the side of highway 89 as smoke from the Wood Hollow fire fills the sky north of Fairview, Utah, June 26, 2012. Credit: Image credit: REUTERS/George Frey

Former AT&T executive Gail McGovern gets credit for longevity at the American Red Cross -- she walked into a messy situation in 2008 and has served as CEO since -- but she and her pack of AT&T cronies mainly get taken to task throughout a thorough new ProPublica article on the charity's struggles. Not only has McGovern failed to turn around the financial fortunes of Red Cross, but her management organization's style has hurt morale and limited the charity's effectiveness in aiding Americans, according to the report.

(ProPublica, if you don't know, is a nonprofit investigative journalism newsroom, and has been examining the travails of Red Cross over the past couple of years in conjunction with NPR.)

The story caught my eye in part because of McGovern's name. I recall the executive from her days as a higher up at AT&T during the mid-1990s, when she was pitching Network World about the carriers' efforts to go beyond being a provider of dumb pipes.

It also got my attention because of the checkered history of former AT&T executives, from Joe Nacchio to Richard McGinn to Carly Fiorina, as leaders of other big companies.

McGovern declined to be interviewed by ProPublica, though Red Cross did its best to defend her, arguing that she had to make painful personnel and local chapter cuts to fix an organization that had grown inefficient over the years.

Still, as ProPublica points out, "McGovern recruited more than 10 former AT&T executives to top positions" -- the sort of thing that smacks of the old boy (and to a lesser degree, old girl) network that traditional telecom giants are notorious for. Some dubbed Red Cross the "AT&T retirement program."

What's more, you might think an executive from a tech company like AT&T might help Red Cross become more technically savvy. But ProPublica reports that the organization has been hurt in part because it "bungled a software project" in its key blood division and fell behind in blood labeling processes.

Some say McGovern has been too marketing focused as well. "The priorities seem to be a reflection of what that team is comfortable with: sales and marketing," one former senior Red Cross official told ProPublica.

It's too bad McGovern declined to speak to the reporters, but they appear to have interviewed enough others and done enough research to produce a piece worth reading.

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