The 5 Most Cringeworthy Mistakes Your CEO Could Make

The way your company handles a mishap can either lead to a blip on the media's radar or a total crash-and-burn of the company's brand. Here's how to avoid the latter.

Four years ago, Tony Hayward, then CEO of international oil conglomerate British Petroleum was deemed the most hated man in America.

Following the aftermath of BP’s oil spill in the Gulf of Mexico, he told reporters he anticipated the overall environmental impact to be “very, very modest.”

The public ridiculed Hayward when days later thousands of photos of oil-drudged marine life, beaches, and wetlands emerged on the Internet. To this day, controversy continues to haunt the businessman whose University of Birmingham award ceremony was interrupted last year on multiple occasions by public snickering and protest.

Just a year after the BP oil spill, Netflix CEO Reed Hastings, a widely admired businessman, also opened himself up to public scorning when his company announced via email to its customers that it was splitting its DVD and unlimited streaming services into two separate plans; a change that came with a hefty price hike.

Following the announcement Netflix lost 800,000 subscribers and its stock price dropped 77% in four months. Three years later, however, Nextflix is booming again, with a market value of $26 billion, and more than 33.4 million subscribers in the U.S. Hastings is back in the good graces of both his customers and the press.

Certainly BP’s missteps were far more condemnable than Netflix’s, but it makes you wonder: How are some CEOs able to navigate the press unscathed by controversy and debate while others are not?

Public relations involves creative and strategic planning, like any area of business. But, unlike finance or research and development, PR requires CEOs to be relatable and have a strong level of likeability.

People with varying levels of knowledge are scrutinizing the face of the company to determine how it’s being led. Be it a startup or major entity, below are five ways CEOs commonly lose the public relations battle:

1. Lack of Transparency

Reporters are trained to be watchdogs for society and they are looking for access to company information on behalf of the public. When CEOs chose to be cryptic, they can inadvertently unleash the press’s curiosity, causing media to speculate and dig for facts to support negative opinions they have formed.

CEOs who understand and respect the media’s need for access to information tend to form more symbiotic relationships. They are more forthcoming with relevant and authentic stories and know that various angles can be used to relay key messages that are both good for the company and foster good will with the public.

2. Speak in Jargon

There is no better way to lose both the media and public’s attention then by speaking a different language. Too often, CEOs get caught up in using acronyms or ambiguous terms that are commonly coined in their own industries. While this might be effective in the boardroom, it’s a big blunder in the newsroom.

Media need to be able to simplify information so that it resonates with a wide audience. CEOs who are skilled in using anecdotes or plain language to translate industry terms and simplify concepts are more successful at engaging the press and public at large.

3. Sit on the Fence

In an effort to avoid controversy, many CEOs make the mistake of leaning on both sides of an issue when pressed by their PR team or the press. Playing it safe is intuitive for CEOs who don’t want to offend potential investors, partners, or customers. But it can often backfire by getting them written out of news stories and confusing the greater public on where they stand on an important issue.

The most effective CEOs communicate their stance authentically, understanding it’s the best way to attract like-minded partners while gaining respect and traction in the press.

4. Talk in Sales, Not Stories

CEOs who approach public relations the same way they approach sales or marketing, usually fail to gain much media coverage. The press isn’t interested in promotions or product pitches; they want thought leadership on greater issues affecting the public.

Media need facts and information that affect the public without bias. By pushing a sales or marketing agenda, CEOs fail to make connections with valuable media outlets that could offer them a platform to have a shared voice on news or happenings in their industry.

5. Fail to Admit Mistakes

Despite what advisors might tell them, CEOs are expected to make mistakes. The general public can forgive a wrongdoing and in some cases gain more respect for a CEO when one takes place, if it is handled with honesty and integrity.

One of the reasons Hayward was never forgiven in the press was because his apology was overshadowed by a self-serving statement made in the press: “There’s nobody that wants this over more than I do. I want my life back.”

Hastings, on the other hand did imminently admit he had personally messed up and slid into arrogance over Netflix’s price hike and change of service announcement. While his apology wasn’t well received immediately following Netflix’s new structure rollout, Hastings continued to monitor his core audience, directing his business towards their needs. He also continued to show humility in the press, publicly sharing his lessons learned through self-admitted mistakes.

Just as in life, the public is willing to forgive in business if responsibility and the right actions are taken to alleviate a mistake.

Jennifer Maloney is an entrepreneur and the co-founder of Yulu PR. She was an award-winning journalist before transitioning into public relations. She is passionate about working with brands that have social impact such as the Clinton Giustra Enterprise Partnership, ClearlyContacts.ca, the Chopra Center, BroadbandTV, and World Housing. Jennifer also serves as an ambassador and the director of public relations for YELL, the Young Entrepreneurs Leadership Launchpad. You can connect with her on Google+ and Twitter.

[Image: Flickr user Julie Gibbons]

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