Thursday, February 16, 2006

Beware of Blunders

Marcus M. Mottley, Ph.D.

I have been reading a series of books and articles on marketing and have been intrigued by the types of serious blunders that major corporations and organizations make. Many of these blunders are so costly that sometimes even the CEO gets fired!

As I examined some of these blunders, I thought of our twin island state, our new government, the new ‘directors’ and our new ‘CEO’. I wondered at some of the blunders that our leaders 'might' be making and the potential cost if they don’t do better.

Here a few of those costly blunders from the corporate world. I leave it to you the reader to apply them to issues and concerns you may have with our ‘Sunshine Government’. (In some instances, I give in to the temptation to add a few artistic comments...)

Attempt “Business As Usual”

When a company has serious problems like issues with cashflow and charges of corruption and unethical practices, the leaders cannot act as if it is “business as usual”. It won’t be. When a company misses Wall Street expectations, institutes layoffs or closings, or announces some other bad news, it needs to rebuild lost confidence. Your brand has been damaged. Your shareholders and stakeholders (supporters and voters?) will look at you with a more critical eye. People will doubt you in ways they never used to. It will take time to rebuild. Rather than “business as usual”, act as if it is “business unusual”. Get busy. Communicate. Be transparent. Take massive and continuous action. And, keep your promises!

Lie, Mislead, and otherwise Obfuscate

Lying never works. It sounds obvious, but companies and executives (and politicians?) do it all the time. It can land you in jail or ruin your career (well – we have yet to see that in Antigua & Barbuda). People hate delivering bad news, so they tell a “white lie” which they often rationalize as somehow doing good for others. Or, some people don’t tell the whole truth. They only state the minimum they have to.

Be honest and direct about the facts. Be brutally honest about the facts… and stop putting all the blame on your predecessors. If they did something wrong then your shareholders or stakeholders will take action (they already did… they put you in charge!)

Start by being honest with yourself about the condition of the business (and the country) and your role in what has happened or is happening. Get clear about this. Then you can decide how best to handle the situation.

Be honest with your stakeholders and shareholders (voters and supporters). If you are laying 25% of your people off, then say that’s what you are doing. Don’t say, “We are laying off 15% and expect some additional headcount reductions through normal attrition.” Don’t say we want 700 staff members to take the package if you really want 1500 to do so!

Not Communicating…

The truth will never be as bad as the rumors will become. “No comment” or worse… not communicating with the public will increase the untruths and gossip. It will also unleash the venom of the people you used to be forthright with. The press will attack harder, and your employees’ and your stakeholders’ distrust and mistrust will grow deeper. People will begin to make comparisons with the worst past experiences that they have had. This will undermine your efforts with customers and stakeholders and drive your ‘stock’ down. It doesn’t matter how much it hurts. You must overcommunicate – particularly if you have a history of effective communicating ‘in the past’.

Don’t be surprised if the press and analysts misquote you, or only use part of what you said to make you or your company (or government) look worse. It happens. Get over it. That comes with the job of being a senior executive (minister?). The bottom line is, if you don’t explain the condition the business or economy is in and what you are doing about it, things will get much worse.

Communicate Confusing Messages

When you’re in trouble, get clear about what you are going to say before you open your mouth. Rambling or trying to make 16 points will make you look confused, defensive, or stupid.
Appoint no more than three executives to do the talking: your CEO and two others. Then get clear on three -- and only three -- key messages for them to deliver: the facts as you know them, the actions you’re taking now, and how your actions today, position you for future success. Write these messages down, and practice saying them. Get a speech coach! Get a speech coach!

Write down every possible question you can anticipate from customers, employees, partners, shareholders, press, and analysts. Underneath each, write the number of one of the key messages that best answers the question. Practice answering those questions with a key message until you can recite them in your sleep. Then practice them again. All three people should be saying the same thing. No diversions. No ad libbing. No ‘un-rehearsed’ off-the-cuff remarks. (Yes… you have that right! All spontaneous, off-the-cuff remarks should be rehearsed!!!)

And, oh yes! Speaking on the platform is different from speaking in the boardroom.The CEO should get a speech coach! But speak in your voice and with your passion!

Believe Confidential and Internal Communications Are Internal and Confidential!

Write every email as if it will be printed in the morning newspaper and posted on the Internet. It will be. Do the same thing with your regular mails and conversations.

Don’t kid yourself about this. It doesn’t matter how much you trust the people you are working with. Someone absolutely will leak the information. Particularly when you least expect it. Assume that all of your stakeholders and competitors will be on every internal video or audio conference-call. Assume that whenever you speak, wherever you speak, to whomever you speak, that there is a “Voice” listening. “Steel” yourself and get ready for the “Fire” of criticisms that will come your way because of what you said. Or, don’t say it!

Understand that your executive management, board of directors, auditors, lawyers, consultants, (cabinet, party members, constituents, inner-circle members) and friends will leak information. No matter how much they promise not to. No matter how many confidentiality agreements they sign.

Forget this, and you’ll get stung. Hard!

Play Defense

Within three weeks of your bad-news announcement, you must launch a strong marketing offense. Why three weeks? First, people need time to digest the bad news and recover from what happened. Second, if you wait much longer, your stakeholders (supporters and voters) will assume that you have no future and will start bailing on you. And your competition will be holding a wake (with wine, champagne and Cavalier).

Launch an integrated marketing offensive targeted at customers, prospects, partners, shareholders, stakeholders, employees, and ‘competitors’ about the future of your business (government & party). It should include: three keys to the turnaround, a vision for the future of your ‘industry’ (party), and a vision for the future of your business as an industry leader.

The CEO – not the economists, not the lawyers, not the chief financial officer – must demonstrate the leader’s vision for the future of the enterprise!