CEOs and their disconnects with reality

Australian CEOs get paid megabucks – many multiples of their staff; get paid huge sums to go away when they fail; and, their boards use all sorts of spin to justify it all.

As for the spin and spinners more later, but in the meantime it is probable that the CEOs often fail because they simply don’t recognise the threats and problems their businesses face even when they have the advantage of referring to very recent history.

KPMG recently undertook a survey of business leaders on what were the top 10 issues which they think will keep them awake in 2020. The respondents replied: digital transformation; global political and economic environment; regulation and regulatory environment; innovation and disruption; sustainability and climate change; public trust; leadership capability, accountability, stability; customer and citizen centricity; political paralysis and effective government planning and response; and, workforce upskilling and transformation.

The second last indicates that they don’t seem to have a lot of faith in the Morrison Government or that they were clairvoyant enough to anticipate the bushfires. To give them some credit though, they had to choose from a list KPMG provided, some of which seem to match in some ways services KPMG offers. The possible threats capable of causing sleepless nights were also sufficiently cast in generalities to allow of many interpretations.

It is interesting though to contrast the CEO/KPMG views with a list of actual 2019 crises one of Australia’s leading crisis and issues management experts, Tony Jaques, compiled and featured in a recent newsletter.

“Public trust and leadership accountability are general enough to cover a multitude of problems, but the list overall doesn’t seem to focus on the risks which generate real-life nightmares,” he said.

“But when you look at the crises which have actually dominated the headlines, damaged companies and really demanded executive attention in Australia over the last year or so they include: product recalls; allegations of price rigging; food contamination scandals; TV exposes of industry shortcomings (think horse racing, aged care, gambling); high profile defamation claims; executives charged with stealing and fraud; #MeToo and claims of sexual harassment and discrimination; costly payouts over statements by employees (think Alan Jones and Israel Folau); prosecutions for wage theft and underpayment of employees; financial institutions ‘fees for no service’ and a host of other malfeasance; CEOs forced to resign over personal or company misbehaviour; and, massive data breaches and IT failures.

“That’s just a sample and, rather incredibly, cyber-security/data privacy was on the KPMG list last year but has somehow dropped out of the top ten, “ he said.

Significantly, and thankfully for consultancies which offer crisis response services, “the torrent of damaging headlines which spell out the impact of a crisis on reputation, brand, share value and the chances of corporate survival, the survey list appears to suggest that crisis preparedness is not a priority,” Jaques said.

Ironically, the CEOs could learn a better way to handle it from another sort of spinner – Chris Green the recently suspended off spinner BBL cricketer.

Craig Badings, a partner at communications agency SenateSHJ, recently told a constructive tale about a cricketer in trouble who might be able to teach CEOs who bumble into, or ignore crises and malfeasance, both sound values and how to handle a major problem.

The cricketer was Sydney Thunder’s off spinner in the Big Bash League, Chris Green, who was given a 90-day ban for a suspect bowling action.

Badings said: “For those not in the know, bowlers’ arms are not allowed to bend past 15 degrees when they deliver a ball. If they do the action is deemed illegal. Green’s action was ruled just that.”

Now without disagreeing with Badings everybody knows that many offies from time to time bend the elbow a bit too much (as the blog did) when trying for a change of pace. The late left arm spinner, Tony Lock, was a notorious chucker but never got punished although he was accused of other things – sexual abuse – and fortunately for him juries found him as innocent as  cricket umpires had.

Anyway Chris Green responded to his suspension with a Tweet: “Gutted I couldn’t be out there with my @thunderbbl teammates tonight. Whilst the news is disappointing, I respect the process and the results of the test. Perspective is a powerful thing with what is currently happening in our country.”

Badings then referred to the firm’s annual Reputation Reality Report noting that: “Last year, we asked participants what factors in the workplace made a crisis worse. They were: unstructured and poor communication; inauthentic demeanour by executives; and, lack of ownership of issues.” If you want practical examples of any of these just refer to statements by bank Chairs and CEOs and Scott Morrison when his Ministers engage in rorting or allegedly illegal activities.

Badings said Green not only avoided all three but also potentially garnered sympathy by his response. “He first and foremost gave us a human response – he wasn’t scared to show emotion. He used words and phrases like ‘when I got the results back, I was pretty gutted…’

“He then looked for the positive: ‘It’s not a time to be bitter about it. Everything happens for a reason.’ He described the process as ‘incredibly fair’, that it was ‘time now to move forward’ (well that bit wasn’t so convincing as many CEOs have found) and added that ‘I really do look forward to this challenge that lies ahead’(ditto).”

“He was transparent: ‘I was told (by testers) it was marginal, my faster ball was the one that was reported and that was the issue from around the wicket. It’s something I have got to look at because that’s what’s been identified and that’s the technical changes that I need to make. I see this as a really good window to work on my game and make the changes necessary on my bowling.’

He didn’t look for scapegoats (an excellent lesson for CEOs), despite attempts to bait him after an opposition player previously questioned his bowling action.

“People are always going to have their opinions about you and your game and he’s well entitled to his. I’m not bitter about anything,” he said.

He did lurch into some of the platitudes and jargon modern sportspeople are prompted to use in interviews but his comment sounded heartfelt when he said: “Through the help of my coaches, I will be doing everything I can to get back to doing what I love with ball in hand. I would like to thank everyone for their messages, I am very fortunate to have the best people & fans around to support me!”

All in all a lesson in forthright personal accountability that the CEOs paid millions (as well as their corporate spinners) for success and/or failure could take on board.