Tag Archives: CEO tenure

CEOs, crises and the fine art of taking abuse

This post on Financial Times by Michael Skapinker got me thinking again about what happens to CEOs when a reputation crisis hits their company. Skapinker argues in “Real bosses know when to take a beating” that issuing apologies and takingĀ  the abuse of angry customers, creditors or stakeholders is an essential part of the job of a CEO, and one they are usually well compensated for.

I agree, but it the reality is that in most severe reputation crises it is likely the CEO will not survive. Doesn’t really matter how culpable he/she is in the actual circumstances of the event. When public, political and media outrage is high, a price has to be paid it seems and often that price is the position, career and future of the face of the organization.

I was consulting recently with a global firm working on preparing for major crises and we talked about who the spokesperson or spokespersons should be. With an eye to the demise of Tony Hayward, I suggested that they choose carefully. Not just because they want a face on the response that will avoid obvious errors and will represent the company effectively, but that even with a pristine performance, the situation may be such that the person will not survive it. Without meaning to say it, in retrospect I was essentially asking who at the top might be expendable?

It does not take an in-depth analysis of recent reputation crises to look at the toll on CEOs. The press (including now the vast corps of part-time members of the press that used to be known as bloggers and now just participate in social media) have a fascination with the people at the top and that includes the fascination of the crowd yelling “jump!” to the distraught person teetering on the ledge. We seem to somehow find it satisfying to see the rich, famous, powerful knocked from the very pedestals that we helped install them on.

Several articles in the last few years have pointed to the shrinking tenure of CEOs and have demonstrated that one of the most common reasons for their short career at a particular company is due to reputation crises. Perhaps a new role will emerge in the most powerful companies in the world–a sort of pseudo CEO with a title and all the trappings of real control to be served up as a sacrificial lamb so the real managers can get about the business of running the business for the long term.