Companies & Industries

In a Crisis, Sideline Your CEO?


Your chief executive may well be the public face of your company, but that doesn't mean he or she will pass the grace-under-fire test, advises Aileen Pincus

It's a marketing axiom: The leader is the brand.

When the brand is in danger and a crisis is undeniably underway, conventional wisdom says the chief executive officer must be the one to take center stage. The thinking goes like this: He or she is in the best position to explain the facts to key stakeholders, and who is better-positioned to protect a company's reputation under fire and to accept or deflect responsibility or blame for what happened?

But conventional wisdom doesn't always translate into good advice. Theoretically at least, CEOs are in the best position to contain the damage, identify weak links, and prevent further erosion of public confidence. But what if the CEO's communication skills are the weak link? After all, not all CEOs are created equal. Under scrutiny, some will pass that crucial grace-under-fire test and others will fail. Two examples starkly illustrate just how difficult it is to rely on titles alone when determining who is the best public face for a company under siege.

A Personal Apology

Exhibit A is Frank Blake, the plain-talking chief explanations officer of the heavily criticized Home Depot (HD) chain. After former CEO Robert Nardelli infuriated shareholders by refusing to take their questions at an annual meeting, the new chief executive stepped in with a novel approach: Blake held a two-hour, no-holds-barred, open session with investors, starting with a forthright apology for his predecessor's actions.

And Blake didn't stop there. He posted personal apologies to bloggers on MSN.Money, who flooded the site with stories of poor customer service at their local Home Depot stores. He told them, "We let you down. That's unacceptable." His willingness to face the music was widely hailed, while his promises of better service and open customer dialogue got wide press and are being credited with, at minimum, halting the decline in customer satisfaction.

Enter Exhibit B: The notoriously pugnacious Robert Murray, part owner of the ill-fated Crandall Canyon mine, and a man not previously known for sophisticated communication skills. Murray, as CEO, took on the role of chief spokesperson when a disaster at the Utah site took the lives of six miners as well as three members of the crew sent to rescue them in August, 2007.

A Different Approach

Murray stood center stage from the opening hours of the mining disaster. Unfortunately, he managed to just as quickly find a way to make an already tragic situation even worse. Rather than limit himself to the immediate concern of the safety of the trapped miners, Murray came out swinging with an ill-timed defense of the coal industry and a petulant concern for the reputation of his company and his personal reputation. Incredibly, in those opening statements, he managing to downplay concerns for the miners themselves.

Reaction was swift and predictable from the miners' families, the media, regulators, and the public at large. And that chorus of condemnation came before an exposé by the Salt Lake Tribune contradicted Murray's claims of following safe and accepted mining techniques. Even others in the industry rushed to distance themselves from Murray, in part because of his incomprehensible insistence on being the spokesman throughout the tragedy, even though it is hard to imagine anyone who could have done a worse job.

The time to decide whether your CEO is the one to fill the role of chief engagement officer with the public is before a criticism when there is less pressure and you can consider all the angles (BusinessWeek.com, 1/23/08).

Aileen Pincus writes the "Speaking of Business" column for BusinessWeek.com's Managing channel. She is president of The Pincus Group Inc., an executive firm coaching firm that offers training in presentation, speech, media, and crisis communications.

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