What's Going On?

It’s happened again. Another successful large corporation lost its CEO. 

We recently witnessed British Petroleum’s CEO stepping down in the aftermath of the tragic oil spill in the Gulf of Mexico. Now, we hear the CEO of Hewlett Packard is stepping down even after initial allegations were disproved.  What’s going on?

A better question executives need to ask themselves is “what’s not going on?” In both these cases, it appears the C-suite and controlling boards were not prepared for a major problem, took prompt [if not rash] re-action, and are now being second guessed as to whether they were right.

The reportings in the media are predictable, they “follow the news.” Almost uniformly now we also note when asked for comment, these affected corporations decline to do so. As the fabled Walter Cronkite used to say, “that’s the way it is.” For those reporting the news I think I agree. But for those making the news I observe otherwise.

CBS News gave a subjective report of BP’s removal of Tony Hayward and Bloomberg News gave an initial breaking news account of HP’s Mark Hurd leaving and a business perspective of the fallout. What they did not report was any strategic message put out from either company. In my research this was likely because none was put out. Missed opportunities.

What is also not apparent yet in either of these successful companies is a strategic view of how to deal with crises. Note in this CBS report there is no mention from anyone in BP of “what happens next.”   Similarly, in this Bloomberg story...nada from HP.

What should have happened in both cases — and applies in nearly all situations — is the one most responsible should determine what an endstate of the crisis should look like. Take for example, BP. Would it not have been better that the company leadership determined it wanted BP to be the most publically respected oil company on the planet coming out of this spill crisis? That simple goal would likely have changed many public appearances, responses and releases that are now almost only viewed negatively by the public not to mention a ruined career and sullied corporate reputation.

There are always at least two audiences to placate when things go wrong:

#1 - The throng of attorneys concerning themselves with attendant legal issues.

AND

#2 - The public where reputations are maintained or lost by actions and messages or lack thereof.

In HP’s case, Bloomberg did a good job noting the fallout of the stepdown affecting shareholders, investors and value and alluding to complications for the new acquisition. Missing was any strategic message from the company to allay fears and calm investors, employees and the markets. It would also have been better for the Board’s decision to have been couched for the intention of strengthening HP’s position by upgrading its leadership where no perceived misconduct would be tolerated. The objective, to make good—better.

I have to ask ’what’s going on?’ when I do not see responsible leaders anticipating there will be a significant crisis coming, seeing opportunity from the challenge, linking key messages to actions to be taken. I assume there is no process in work to reverse engineer steps to get from this low point to the objective—the desired endstate. People are always looking for credible, cogent messages and the actions that go with them. Note - they have to be matched. So why not give it to them? This comes only, in my experience, from crisis planning and simultaneous execution or, crisis management.

I believe the reasons for not seeing this today are several:

• Today’s senior executives are younger with less experience than predecessors. 
• Part of this also has to be the paradox of power, e.g. that which got people into their positions of power is not what they rely on to use power. 
• Another reason has to be the [over?] reliance on lawyers and concerns of potential legal issues. 
• But the biggest, in my view, is the lack of crisis experience and/or belief that “waiting it out” to some degree will make it better instead of proactively being prepared with a methodology for crises. 

The last point requires a planning capability that usually does not come from a crisis communications plan on the shelf or legal advice from the firm you hired. As fast as news travels today determines how quickly one gets behind with little chance of catching up—just ask Tony Hayward or Mark Hurd. The new norm is ‘crisis of the day’ and not the exceptions.

Here are several take-aways worth leaving you with:

# 1 - Bad news does not get better with time—crisis demands immediate response

# 2 - Something bad is going to happen to you, your company, or one of your principals—you just don’t get to pick the ‘what' or ’when’

#3 - “Hope” is not a valid strategy—crisis management is a must

#4 - You cannot hide from the media, of any kind—so use it to help turn challenges into opportunities

#5 - You have a very small window of opportunity for reputation management which can suffer long before legal entanglements take hold—practice how to deal with crisis in everything you do

#6 - If you are not an expert in dealing with crises you had better have one at your elbow—in any event, be ready for the inevitable