Vigilantly minding one’s tongue in public has become a major part of the chief executive’s job, and may require some personal reputation management.
Tesla’s Elon Musk, Facebook’s Mark Zuckerberg, and Jamie Dimon of JPMorgan Chase have all imperiled their public image in the past year by saying the wrong thing. It’s not that today’s CEOs are more prone to gaffes than their predecessors; it’s that 24-hour news and social media scrutiny give any misstep, verbal or otherwise, the weight to spark a crisis. CEOs of big companies now must exercise a degree of restraint akin to that required (or at least expected) of high-ranking politicians.
Another, less obvious reason for the heightened caution is “Reg FD,” a rule passed by U.S. financial regulators in 2000 requiring companies to share information with all parties at the same time. Out of fear of violating this rule, conferences and presentations are recorded to prove compliance. CEOs generally try to be on their best behavior in these situations and stay on script. But consequently, when a regrettable utterance does slip out, is appears more egregious.
For the shamed CEO, the consequences can be grim. Consider the fate of Uber’s Travis Kalanick. Or that of BP Chief Executive Tony Hayward, whose infamous “I’d like my life back” remark after the Deepwater Horizon disaster ended his career at BP. A joke from Lloyd Blankfein, former CEO of Goldman Sachs, that he was “doing God’s work” created a firestorm, though Blankfein stayed on.
There are various personal reputation management strategies chief executives can try. One is so-called “radical transparency.” This was employed by former Deutsche Bank CEO John Cryan, who chose to do away with scripts and speak his mind freely. Given that the bank engaged the services of a personal branding specialist a year or so into his brief tenure, one might conclude that this approach is not ideal.
The opposite is to avoid the public and keep quiet, like Larry Page, CEO of Alphabet and co-founder of Google. He sat out September’s congressional hearings on Russian interference in elections, which put Mark Zuckerberg in the spotlight. This isn’t always easy to get away with, however, as one’s absence can itself raise suspicions. Similarly, if top executives are reticent on social issues, their silence can be perceived as tacit approval at worst, or apathy at best.
Some chief executives possess the self-control needed to avoid slipups entirely. Apple CEO Tim Cook comes to mind. But as The Economist point out, “not every individual is as restrained as Mr. Cook and not every firm is as successful as Apple.”
There are other personal reputation management strategies that have proven successful. Sheryl Sandberg, Chief Operating Officer of Facebook, has published books that help her project a certain persona, similar to a celebrity’s personal branding. Microsoft’s CEO, Satya Nadella, has tried a similar tack, publishing a book with a decidedly personal touch. Corporate social responsibility offers other options, if executives associate themselves closely with causes. Former PepsiCo CEO Indra Nooyi did this, and was able to get away with being boldly outspoken.
Finally, top executives with high profiles can embrace the gaffes and make them part of their personal brand. Jamie Dimon has a talent for this, as he manages to spin impropriety as authenticity. He is also able to be brashly opinionated without consequence because he carefully keeps his salty words separate from discussions about JPMorgan Chase’s business performance. That is sacrosanct.