CEO Crisis Leadership

In times of crisis, the CEO is the star witness in the court of public opinion. How to avoid being held in contempt.

At least 50 percent of an organization's reputation is driven by its CEO's reputation. Like it or not, the CEO is the face and voice of the company; the steward of its vision and value; and the personification of its brand.

In times of crisis, the CEO becomes the star witness in the court of public opinion. What the CEO does and says in a crisis may, in fact, decide the company's fate. Two quick examples:

• Former Exxon CEO Lee R. Raymond was slow to acknowledge and visit the site of the Exxon Valdez crash. The public and the investment community never forgave him. The company never regained its market position.
• Martha Stewart ducked, dodged, and delayed when accused of insider trading. Her company's stock took a beating and didn't start to rebound until she asked that her prison term start quickly, even while she appealed a conviction.

Bad things happen to good companies, but crises do not have to threaten a company's existence. The following five cardinal rules provide a foundation that CEOs can use to communicate effectively when crises do strike.

Empathy -- Always begin by saying you are sorry and concerned. Credibility is determined in the first 30 seconds of contact. Showing concern is half the battle. Be careful here: if you can't say you're sorry and mean it, the public will typically see right through you.

Candor -- Avoid "spin" at all costs. Your overarching communication goal during a crisis is to become standard of the truth. Be candid and forthright - stick to the facts. When a crisis occurs, the media or the regulators will usually continue to investigate, probe, and question until they get what they believe to be honest answers. Who would you rather that come from - you or your whistleblower, competitor, or anonymous "insiders?"

Speed -- Respond immediately with what you know and update those reports frequently as more facts are known. The Exxon Valdez was one of Exxon's worst mistakes. The company took far too long to show it was on top of the situation. Meanwhile, media coverage pummeled its reputation. Two things happen when you respond too slowly:

• Media coverage moves on without you and your perspective, leaving you to play a lot of catch-up later.
• The public quickly determines you either don't understand or don't care about what has happened.

Involvement -- Don't play ostrich like Exxon. Be visible to your associates, the media, and other key stakeholders. Demonstrate that you are deeply involved in addressing the root cause of the problem. Be prepared to talk about what you're doing to understand how the crisis occurred and be ready to tell how you're going to make sure it doesn't happen again.

Balance -- Work to get balance between the advice from lawyers in the court of legal opinion and advice from public relations counselors in the court of public opinion. Martha Stewart likely took her attorney's advice - and she lost in both courts. The CEO has to be able to step back, assess the likely outcomes of what is and isn't said, and when it's said. Finally, make a judgment call about which court is most important in any given instance. And, by the way, there's no rule anywhere that says you can only survive one court at a time. Great legal and communications counselors can often find a middle ground where the company can survive both the legal and public scrutiny.