Gini Dietrich

In the Trenches with Crisis Comms: When a CEO is Bad

By: Gini Dietrich | March 22, 2018 | 
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In the Trenches with Crisis CommunicationsHave you ever had a situation where you’ve worked with someone and you just know something is off?

Perhaps you discovered the leader was having an affair or something was off with the financials of the company, but you didn’t dare question the chief financial officer.

We once had a client who we learned was a pathological liar.

While the stories she told in the beginning were hilarious (although untrue), it became a real problem for the organization and for our ability to do our jobs.

And we didn’t say or do anything about it. I mean, how do you accuse the CEO of being a pathological liar?

At first, it was small things. She told us she was one of the first employees hired at Google (she wasn’t). And then the lies grew from there.

By the time we had enough evidence to be able to go to the board about her, it became an us versus her situation.

And we decided it was time for us to go.

We may have made a different decision if the organization were publicly held, but this was a small company and we decided, instead, to just step away.

Ongoing Crisis Communications Series

In our ongoing series about crisis communications, we’ve talked about:

In today’s case study, we’re going to take a look at a situation where the communications firm made a different decision than we did.

They worked with the board of directors to replace the CEO of a client’s organization—one that happened to be a publicly traded company.

A Slow-Moving Crisis

During the early days of working with this CEO, they did presentation training with him.

They quickly discovered that he had terrible communication skills—and they could see how that was contributing to poor perceptions and results for the company.

They had been engaged to help prepare the CEO and senior leadership to publicly share the company’s vision to investors and other stakeholders.

At first, they were focused on that mission. Then it became clear he was a bad fit. A part of that realization came during their training.

But like many of us would do (ourselves included), they didn’t say anything and continued to try to work with the CEO.

About a year later, it became clear the CEO had to go and the communications firm became a big part of communicating that change.

While not crisis communications in its purest sense—they were able to prepare and manage the situation from their end—it was slow-moving and took a lot of their time for many months.

As soon as it became clear to the board of directors that this CEO had to go, the communications firm’s offices became the war room.

Because the client is a publicly traded company, the move had to be well-planned, well communicated, and well executed.

When an Issue Becomes a Crisis

A small subcommittee from the board, a few top executives, and the communications firm were the only ones working on the departure announcement.

During this process, they prepared a complete set of internal and external materials, from talking points for the board and senior leadership all the way down to emails and scripts to be used with employees.

Given the sensitivity of the communications needed, and the need for a comprehensive plan and complete tactics, a small team worked around the clock to create the plan and materials.

They worked with the small group of internal company leaders during the course of a few weeks.

The work continued on a lower-key advisory basis once the CEO’s departure was complete.

While they were able to manage the story—and tell it on their own terms—the departure of a CEO at a publicly traded company is always crisis communications, ten-fold.

Stocks typically dip, while Wall Street waits to see how the organization will react—and who they put in place immediately.

And, loss of money always indicates a crisis (not an issue) is at hand.

Crisis Communications Often Lasts Months

The leader of the communications firm told me:

The news story was intense for the first 90 days following the CEO departure because of the quarterly reporting of earnings for a public company.

As well, for more than a year afterwards, as a respected interim CEO ran the company, significant changes had to be made in the organization, its cost structure and its employee base, even its lines of business. All of these actions tied back at one level or another to the CEO departure.

So now they have a crisis on Wall Street—and a crisis internally, as employees are moved, salaries are changed, and customers are let go.

While this is the cost of doing business, it’s never fun to go through.

And the crisis communications team had to handle it all for a good year—both internally and externally.

What You Can Learn from the CEO’s Departure

The good news is, the company is in far better shape today.

The outcomes of the CEO departure continue to shape the company today. While it was a difficult and necessary transition, the company is healthier financially today and it has a clear strategy to propel its growth.

You know the saying, “One bad apple spoils the bunch”?

That’s true even at the highest levels. When a publicly traded company has the wrong CEO at its helm, everything can go wrong—and it typically does.

Did we do our client any favors by not discussing the CEO with their board? Probably not.

But this communications firm stepped up and provided input on what they found during presentation training with this CEO—and in working with him for a year.

When I asked them what lessons they would provide other communicators, he said:

In a crisis, relationships, knowledge and trust are vital. We had worked with this company for years. When it became necessary to change CEOs, we knew the company and its businesses, had relationships with its top leaders, and because of previous sensitive assignments, had earned the trust necessary to handle this crisis communications assignment.

He continued by saying:

If you are ever in this situation, stay close to top management. Work collaboratively on an outline of the communications and then work quickly to execute from strategy to tactics, engaging internal stakeholders at every step to ensure you’re on the same page.

The only thing he said they would have done differently is share their concerns more quickly.

But then again, hindsight is always 20/20.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro. Join the Spin Sucks   community!

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