Tag: Scott Thompson

The Most Notable CEO Apologies Of 2012

Posted on by Dorothy Crenshaw

The public apology has long been a staple of PR and reputation management, and this year saw a large number of C-level mea culpas. Some were mandated, while others were designed to beg forgiveness, right wrongs, or restore good will. Here’s my list of the most notable.

Picture this: Instagram is forced to backpedal after issuing a modified Terms of Service policy that many feared could “effectively transform the Web site into the world’s largest stock photo agency.” In a blog post, cofounder Kevin Systrom blamed “confusing language” and pledged not to sell users’ photos. His statement did quell one controversy, but the social media storm has raised other issues about privacy and user protections.

Pink slip-up? The saddest, and possibly most ineffectual, apology might have been that delivered by former Yahoo CEO Scott Thompson about his “resume inflation.”  The embattled chief issued a statement taking responsibility for the goof and apologizing to Yahoo employees, but without any explanation or clear way forward. It wasn’t enough; he was ousted after just four months on the job.

J.P. Morgan Chase CEO Jamie Dimon‘s apology for unprecedented trading losses was surprisingly robust for the previously untouchable banker; in “contrite” and widely publicized testimony before the Senate Banking Committee, he called the bank’s $2 billion error “embarrassing,” adding “the buck stops with me.” Dimon’s statement got mixed reviews, primarily due to his opposition to regulatory measures that many feel might have kept the bucks in the bank. The apology was articulate, yet Dimon’s credibility took a hit.

Among the most delayed and ultimately impotent apologies was that offered by Nancy Brinker, Founder and CEO of Susan G. Komen for the Cure. Brinker’s explanation of Komen’s initial decision to withhold funding from Planned Parenthood, in which she admitted that she “made some mistakes” in letting things be politicized, wasn’t enough to pacify critics, and the group’s fundraising continues to be less than healthy.

The most shocking public admission of culpability might have been delivered by Irene Dorner, president and CEO of HSBC Bank USA. Dorner testified about the lack of controls that allowed Mexican drug cartels and other illicit organizations to launder billions through HSBC’s U.S. operation. Though the misconduct predated her tenure, Dormer expressed “deep regret” for the lapses and pledged that the bank had “burned bridges” so that it could not happen again. But many were skeptical of a whitewash, given the bank’s relatively light fine, and no criminal prosecutions.

Talk about bad taste. One of the lamer apologies came from Popchips CEO Keith Belling after a video ad threatened to fry the brand’s reputation. In it, Ashton Kutcher impersonated different characters in what resembled a video dating parody. One persona was “Raj,” a Bollywood producer complete with brownface and a phony singsong meant to be an Indian accent. Many viewers thought it racist, prompting Belling to respond, “Our team worked hard to create a light-hearted parody featuring a variety of characters that was meant to provide a few laughs…. I take full responsibility and apologize to anyone we offended.” In my book, anyone who utters such a mealy-mouthed sound bite should eat his words; a half-baked apology usually makes things worse. Yet, Popchips took down the video and the food fight calmed down.

By most accounts, the Apple CEO Tim Cook’s mea culpa following its Maps debacle hit all the right notes. The full letter to customers is a masterpiece of good communications. It was swift and direct, and in the statement Cook took responsibility for the lapse and pledged to fix it. He won extra credibility by recommending that users download competitive products until such time as Apple could get it right. The apology succeeded because it reminded us how rare it is for Apple to disappoint its customers.

Crisis Management: When The Crisis Is The CEO

Posted on by Dorothy Crenshaw

It’s hard out there for a CEO.

Recently, we witnessed a week’s worth of drip-drip-drip coverage about Yahoo chief Scott Thompson’s resume. The gaffe culminated in Thompson’s resignation after only four months on the job. But the controversy, on the surface, wasn’t about whether he’d faked an advanced degree, or falsely claimed Ivy League credentials. No, this was about his undergraduate major.

The headline-making departure last month was that of Best Buy chief Brian Dunn. Maybe it wasn’t surprising, but it was breathtakingly abrupt, amid unsavory and unsettling rumors of “improper conduct.”

Granted, each of these, and other “CEOs behaving badly” situations was really about company performance. And in Thompson’s case, the growing crisis wasn’t handled well. But it’s obvious that the stakes are higher than ever for the head guy. Controversy over executive pay, diminishing public confidence, and the news cycle have conspired to make even seemingly trivial missteps a big story.

The implications of the new, more perilous chief executive role aren’t lost on those who recruit and install the top guns, or on professional communicators. Corporate boards will redouble efforts to troubleshoot potential problems in advance. And it’s only right that chief executive prospects should be vetted with the zeal and rigor of (most) presidential candidates. Every weakness, peccadillo, or hint of scandal can, and will, come out.

At a time when a strong, communications-savvy CEO is more needed than ever, corporate strategists and PR specialists will become even more cautious about putting the head guy out there. A deep and visible executive bench is a strong communications strategy, and, these days, good risk management. But it’s more likely that access to the executive team will simply become scarcer for journalists.

The bottom line, of course, is that most of the responsibility lies with the chief executive. The occupant of the corner office needs to acknowledge his/her shortcomings, seek the best advice from those outside the inner circle, and be aware of when a problem or crisis has grown beyond their capability to address it. A terrific example of the “new” CEO who actively seeks counsel around his own leadership development is that of Mark Zuckerberg, as detailed in a recent New York Times piece. Yet, Zuckerberg, who will be 28 next week, is an anomaly even for a technology company.

The imperial CEO is long dead, and well he should be. And maybe we shouldn’t feel too sorry for the guys who can generally pull a ripcord on a golden parachute and go home to a fat bank account. But it’s possible that the pendulum has swung too far from the command-and-control days. The margin for error is so thin that you have to ask yourself, at some point, who’s going to want this job? When accountability turns into scapegoating, it’s a losing proposition for everyone.