Bad Press Is a Sign of Bad Leadership
There is really no excuse for the spate of seemingly unbelievable gaffs made by industry leaders in the last few months. Why weren't they using crisis PR teams to manage their actions if they couldn't manage themselves? I'm joking of course... or am I?
The list of Marie Antoinette moments is astonishing (see Arianna's post) - all the way up to just 2 days ago with Tim Geithner's $435,000 severance upon being promoted to Treasury.
But there should be no need for such insensitivity! There are PR firms that specialize in helping management teams through bad times, firms like Burson-Marsteller and Ogilvy who, if they are allowed in to decision making when the flack is flying, will ride management to think about the implications of what they are doing before they act.
Tainted food is a classic example of how a crisis can be handled well. Everyone remembers when someone spiked Tylenol with cyanide - and instead of avoiding the problem Jim Burke, CEO of Johnson and Johnson (JNJ) at the time, stepped up and took accountability, even though it was an individual's criminal act. He initiated a comprehensive voluntary recall within two weeks - and made it a positive for Johnson & Johnson's brand.
Likewise Clif Bar (CLIF) has just last week voluntarily recalled all products with peanut butter in them whether or not they are at risk of being exposed to the current salmonella outbreak, reinforcing their brand of healthy products.
PR people would say that press management is easy when the leader's actions are right.
So what does it say about management when moments of executive cluelessness happen and they don't do the right thing?
The sad truth is that no amount of executive handling can protect bad leaders from themselves. Maybe the auto executives were so used to flying everywhere on their private jets that it didn't occur to them not to - but I wonder if their PR head spoke up and told them it was a dumb decision. Maybe John Thain's office really did need refurbishing rather than redecorating - but why not wait until better times and then be reasonable?
Good CEOs earn their pay by creating jobs and shareholder value - and as importantly they get good press for their companies and high marks from their employees. Let's hope a silver lining to this crisis is that the bad leaders will be exposed and be moved on.
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Wow, black and white without any gray. If only the world were so simple.
Let's go farther and make the CEOs subject to the will of the bagholders.. I mean shareholders so that the shareholders can order the return of the money that CEOs loot from the company that they just drove into the ground- post a loss =no bonus try it and go to State Prison where they so obviously belong.
I have taught business owners all over the country that their first and almost ONLY job was to increase the value of their company. As you correctly point out, there are many ways to do that, but I shake my head in wonder at how the people that have gotten to the pinnacle of the business world are so clueless.
Of course, I've always said that most businesses make money in spite of themselves, and the person in the organization that can do the most damage is the person at the top. That's whay, when I set up a business to succeed, one of the first things i do is to find something for the owner/CEO to do out of the office 90% of the time. If a business is set up right, not only don't they need to be there, they generally get in the way when they're there.
Hudsucker Proxy
Ah... you found out my secret... LOL
Penny, you got it all wrong, it's not a question of PR, it's a question of money. CEO money.
The bankers got most of their bonuses, and they will keep them. Today's NY Times explains why:
"Few [Legal] Ways to Recover Bonuses to Bankers" (B1, Jan. 30).
However, this is not a legal problem, it is just business. Obama should ask the bankers voluntarily to return all their bonuses since 2003, when the subprime housing scam began. Those banks that choose to keep their bonuses can then be asked to return their bailout money instead. They can also be denied access to Fed money at 0 % interest rates. I am sure that many banks will choose to have their officers return all their bonuses, and bankers will think twice before they do something similar in the future.
Of course, if Obama were actually to do this, it might have an adverse effect on Wall St's campaign contributions to Demos. Now we know why businessmen make such large campaign contributions...
Agreed that good leadership means having good PR sensitivities. This works in both the corporate world and also in politics. As dumb as it was to put themselves in a position to be criticized for profligate spending on jets and wastebaskets during this baliout season, so were House leaders dumb for including things in the stimulus package that appeared to be profligate spending items. The correlation between the two is clear.
Corporate leaders put themselves in the corner by not being sensitive to the taxpayers bailing them out with billions of tax dollars. House Democratic leaders put themselves into a PR disaster for including items in the stimulus package that were open to criticism for the appearance of wasteful spending. Both need to have their heads examined by being so apparently insulated from the real world.
Corporate leaders looked greedy. Democratic leaders allowed an important bill to be attacked because they didn't keep their eye on the ball in protecting the taxpayers in these times. Some items in the bill reached too far. Both had choices to make in their actions, and both blew it.
To call it 'executive cluelessness' is to be very, very generous. In fact, it's executive narcissism, supreme self-centeredness, ultimate entitlement. The mere concept of 'PR' means that someone else is entitled to an opinion--a thought that hasn't entered the CEO's consciousness.
Buy sensible shoes. A revolution is coming.
Cute Freudian slip, Penny! "When the flack is flying..."
You mean "flak" (as in anti-aircraft ammo), not "flack" (as in PR rep)!
Tim Geithner's severence was reasonable in contrast to the compensation packages and "golden parachutes" of many executives. If most CEOs and executives were paid along those lines, I'd be OK with it.
Reasonable is relative.
Why is he getting severance at all. He wasn't laid off. Is the Federal Government also giving platinium parachutes to those it hires, with terms in effect whether or not the person leaves on his own or is fired.
What a deal!!!
If only the parachutes were really gold and the plane was at 30,00 feet!
The CEOs don't believe that their contempt for the ordinary consumer will affect their extorsion of no-strings-attached money from the government.
They have yet to be proven wrong.
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