Leading a company through a global crisis like COVID-19 and the growing furor over racial injustice will almost certainly be the most difficult time in a CEO’s tenure. Simply put, everything is on the line – their own reputation as a leader and manager, as well as the resiliency and overall viability of the company. Even some of the most routine aspects of the CEO job – such as the quarterly earnings call or the annual shareholder meeting – are now fraught with added layers of complexity. These challenges and risks are dramatically heightened when the CEO is new on the job, perhaps named to the role just weeks prior to the event, or assuming responsibility during the crisis itself.
Executive transitions have historically been pivotal moments in a company’s history. How the stock market reacts, how external and internal stakeholders respond to the change in leadership can set the tone for the new CEO’s tenure (and determine how long that tenure will be). Even with, or perhaps because of higher stakes during these recent events, large and high-profile companies continue to make changes at the helm, among them AT&T, IBM, NXP Semiconductors, T-Mobile, United Airlines and The Walt Disney Company*, all of which have recently executed successful leadership transitions in this precarious environment. While each announcement reflected nuanced circumstances particular to that respective company, many shared one common message thread: emphasizing why their new CEO was the right person to take the reins and lead the company forward during uncertain and challenging times.
Below are a few of the guiding principles we are advising the incoming CEOs of our clients to consider on day one as they start their new roles amidst a global crisis.
- Your honeymoon period is already over: In fact, you never really had one. Any expectation of easing into the job or a grace period is unrealistic. Every industry is experiencing changes or crises and all eyes are on the new executive from the first minutes of taking office. This means it’s more important than ever to have a CEO who has credible, almost irrefutable, qualifications, a genuine passion for the role and company and the posture to execute. This could explain the recent trend in promotions from within – in a crisis it may be far easier and better to elevate an executive who is seasoned, understands the company from the inside and is ready to hit the ground running rather than risking hiring an outsider who needs time to get up to speed on the business and the culture.
- Your public commentary will be amplified: There is a huge appetite to hear from companies, so CEOs need to be ready to speak to the impacts of these events in any and every public appearance they make. With so much attention on the actions and statements companies and CEOs are making, rehearsal and thoughtful planning is essential. Any fumble and the media will keep you on replay. This is further heightened by the strained social and political tensions of the day, especially in a U.S. presidential election year, when (as our colleagues in Washington D.C. recently explained) any company can become a political pawn. The incoming CEO (and the company’s communications team) need to be well prepared for a variety of situations.
- Your voice, tone and message matter more than ever: Don’t be afraid to embrace the uncertainty and acknowledge the unknowns but also be prepared to offer a clear vision on the local and global issues that matter to you, your industry and your stakeholders. You will need to be authentic in offering your perspective and prepared to listen to your organization about the actions or changes they would like to see in addition to offering your own. In these uncertain times, stock price is not always the best or only barometer of CEO performance – how you position yourself on key issues and the resulting stakeholder response is the true test.
- Your communications vehicle is equally important as your message: With so many people working remotely or with adapted schedules, now is not the time for the standard playbook. Get creative with new approaches or find innovative ways to use standard communications vehicles. Even if you wouldn’t typically host an in-person town hall, consider a virtual one. Consider regular video messages – yes, filmed from your smartphone (it’s a clear way to convey urgency, authenticity and empathy). Consider virtual brown bag lunches with employees across offices. Your physical presence, even if just displayed through a screen, and the energy and emotion you bring have the potential to shape internal and external perception.
- Your succession planning starts now: CEO succession planning can’t be allowed to lapse. The moment a new CEO takes over should be when you start putting a clear plan in place for the next. As our own CEO Tom Johnson wrote last year, it is critical to find ways to showcase the executive bench and talent development programs behind the chief executive.
The current global environment is potentially the hardest time a new executive will ever have to manage. If a company and CEO can stick the announcement landing, they’ve learned a lot about how to communicate in a crisis successfully and these lessons will serve them well in all capacities of leadership moving forward.
*Disclaimer: Abernathy MacGregor has represented some but not all of the companies listed.
Eric Bonach is a Senior Vice President at Abernathy MacGregor, where he provides strategic communications counsel to companies involved in transformative and special situations, including executive transitions, mergers and acquisitions, unsolicited takeovers, shareholder activism defense and corporate crises. Eric’s recent experience includes advising: Accel Entertainment, NXP Semiconductors, TC Energy, T-Mobile, TPG Capital, U.S. Steel, among others.
Melissa Gansler is a Vice President at Abernathy MacGregor, where she counsels clients on a variety of special situations, including mergers and acquisitions, executive transitions, shareholder activism and restructurings. Melissa’s recent experience includes advising: Intuit, Madison Dearborn Partners, NXP Semiconductors, T-Mobile, U.S. Steel, among others.