Martha Stewart Post Mortem

Martha Stewart is back. See how to avoid her communication failures in the future.

Martha Stewart is out of jail and back in the spotlight.

Her release from prison, highlighted by the stroll to a private jet and photo op in the snow outside her New England home, got wall-to-wall coverage by all major media. She has a new television show. The MSO stock is hovering around an all-time high after losing 75 percent of its value during her insider-trading scandal. On the surface, it looks like a good thing.

Martha was able to survive where most CEOs would not. Her return to prominence is the result of celebrity - some might say the "cult of personality" -- rather than brilliant crisis management.

Looking back, we can now say that Martha was at fault in this case. We can also assume that Martha knew all along that she was at fault.

Given that, Martha's crisis communications cookbook was flawed from the beginning. Here is our look back at her mistakes and how other CEOs can avoid them in the future.

• When at fault, tell the truth, tell it all, and tell it fast. Martha's biggest mistake was trying to cover up her actions -- remember the doctored phone log. Smart people make stupid choices. The key is to admit them, ask for forgiveness, and accept the consequences. Had Martha admitted her mistakes and asked for leniency, her story would likely have been very different. Her categorical denials and defiance only emboldened the media and investigators.
• When at fault, deliver your mea culpa in a humble, well-stated manner. Martha never apologized for what happened. When you're the epitome of perfection in all areas of domesticity, this is a difficult concept to grasp. Martha most likely would have averted a lot of public scrutiny and mitigated her legal consequences with a simple apology. Human beings have a great capacity for forgiveness, but we have equally great contempt for deception.
• When at fault, get the punishment over with as fast as possible. Martha chose to drag out her case and eventually take it to court. The MSO stock languished at $10 per share (about half of its pre-scandal price). The stock price began improving last fall when Martha was convicted and sentenced to prison. Investors were happy to finally see resolution to the whole issue.