Should CEOs Tell Truth About Being in Trouble, Or Is That Foolhardy?
Carly Fiorina's refusal to admit she was in trouble is no secret.
Two weeks ago, during a meeting with journalists at the World Economic Forum in Davos, Switzerland, the now-ousted chief executive of Hewlett-Packard said her relationship with her board was "excellent." Rumors were swirling that H-P directors were unhappy with the company's financial performance, but she insisted that "since the merger [of Compaq Computer and H-P in 2002], our competitive performance has improved in every dimension."
H-P directors may not have been pleased to hear that Ms. Fiorina thought everything was hunky-dory. They had already told her she had to open up the office of CEO and give more day-to-day authority to several operating executives. Last week they asked for her resignation.
What should a CEO whose company is rumored to be in trouble and whose tenure may be on the line do or say? Is it suicidal to admit publicly that things haven't gone as expected and own up to mistakes? Or should business leaders always appear confident, even invincible?
"No CEO who is still leading a company and serving customers can announce publicly, 'I'm just about out of here,' " says Jim Citrin, a managing partner of executive recruiter Spencer Stuart. "But the first job of any leader is to define the real situation he or she is in. If you are on thin ice and asked about that, you might say 'My job is to drive value, and we're not doing that as well as we can, so I'm going to try to do whatever it takes.' "
But admitting weakness doesn't come naturally to most CEOs. So many are surrounded by subordinates who want to please them that all they ever hear is "everything you are doing is right." When problems do arise, they often blame others, producing a culture of fear that further stifles frank feedback. When H-P badly missed its fiscal third-quarter financial projections last August, for instance, Ms. Fiorina fired three top executives.
Taking responsibility can pay off, though. In October 2000, five months after she took over as president of Xerox, Anne Mulcahy bluntly told Wall Street analysts that the company's business model was unsustainable. Her challenge, she said, was to radically restructure, abandon Xerox's reliance on its aging copier-machine business and stave off bankruptcy. Within hours, Xerox's stock fell 60%. "Some [Xerox] people had warned her that the market would react badly, but she wanted to be candid about the situation we were facing," says Christa Carone, a Xerox spokeswoman.
Ms. Mulcahy also traveled to numerous Xerox sites to talk with employees. "She looked people in the eye and said, 'This is going to be one of the most stressful situations of your life, so if your heart isn't in it, please don't stay,' " says Ms. Carone. To stay solvent, Xerox eliminated profit sharing and outsourced half of its manufacturing, shrinking its work force 41% to 58,000. But under Ms. Mulcahy, who is now chairman and CEO, the company has also cut debt in half, moved heavily into digital products and increased cash flow from zero to $1.5 billion at the end of 2004.
Just because CEOs own up to difficulties, though, doesn't mean they necessarily get to keep the top job. As head of Electronic Data Systems, Richard Brown had a tough time in 2002, when the company was hammered by the bankruptcies of WorldCom, United and US Airways. When the company missed its third-quarter earnings forecast, he took it hard. "You feel a pit in your stomach and like a failure," he said then. But he also said, "I own this problem."
He was surprised when, early in 2003, his board asked him to resign, according to a person familiar with the situation. (Mr. Brown couldn't be reached for comment.) One reason for his ouster: He apparently didn't seek help from directors to create a turnaround strategy, and thus didn't have their allegiance.
"No one can be a master of the universe," says Roger Enrico, former chairman and CEO of PepsiCo, who was among the EDS directors who asked Mr. Brown to resign. The most effective business leaders, says Mr. Enrico, who is also a director at Target, Dreamworks and Belo, "know their strengths and their weaknesses and are very honest with their boards about getting help."
Ken Freeman , former chairman and CEO of Quest Diagnostics, thinks executives must be "brutally honest" not just with directors but also employees and customers, especially when trying to turn a business around.
Earlier in his career, as head of Corning's TV-glass business, he had to convince employees they would lose their jobs unless they improved quality. But he was the fourth head of the business in as many years, "so when I went to our factory, employees figured they'd outlast me," he says.
To make them listen, he shut the factory for nine days and invited his biggest customers to address them. One customer said he would stop buying Corning products in six months unless the quality improved. "Employees who had turned their chairs away from the stage suddenly turned around and listened," says Mr. Freedman. Within a year, they had overhauled manufacturing processes and solved the quality problems.
困境面前CEO是否应该实话实说？
卡丽?费奥瑞娜(Carly Fiorina)拒不承认自己处境困难如今已不再是什么秘密。
两周前，在达沃斯世界经济论坛(World Economic Forum)的记者招待会上，这位现已去职的惠普公司(Hewlett-Packard)首席执行长表示，她和董事会的关系“好极了”。而外界有关惠普董事对公司财务业绩不甚满意的流言已经传得沸沸扬扬，但她坚称“自从（2002年康柏电脑公司(Compaq Computer)和惠普）合并后，我们在各个方面的竞争力都得到了增强。”
惠普董事们可能不喜欢听到费奥瑞娜把事情都说得那么好。他们先是要求她把部分权力下放，给几位运营长更多的日常事务决断权，上周他们终于向她下了逐客令。
当一家公司遭遇流言，称其陷入困境，其高层人士处境岌岌可危时，公司的首席执行长应该怎样说和怎样做呢？这时如果公开承认事情进展未能如人们所愿、并坦承自己的失误，是否会自毁前程？或者说公司领导者是否在任何情况下都应表现得信心十足、甚至是绝对的自信？
“没有哪位在任的首席执行长会公开说出这样的话‘我就要离开这家公司了’，”高级管理人才猎头公司史宾沙公司(Spencer Stuart)的执行合伙人西特林(Jim Citrin)说。“但每位领导者首先要搞清楚的是自己真实的处境。如果你在公司的处境如履薄冰，在回答与此有关的问题时，你可以说‘我的工作就是要提高公司的价值，我们做得还不够，因此我将竭尽全力达成这个目标’。”
不过，承认自己的不足可能会让多数首席执行长感到别扭。许多首席执行长被那些总想取悦于他们的下属包围著，他们听到的都是这样的话：“您做的一切都是正确的。”当问题出现的时候，他们就会把责任推卸给别人，这样一来员工们都变得小心翼翼，更难形成直言相谏的风气。比如，去年8月，惠普公布的第三财政季度业绩远远不及预期水平，费奥瑞娜就因此解雇了三位高级管理人士。
然而，勇于承担责任也能收到好的结果。2000年10月份，在安妮?摩尔卡希(Anne Mulcahy)出任施乐公司(Xerox)总裁的5个月后，她毫不讳言地向华尔街分析师表示，公司的业务模式已经无法支撑下去。她说，她面临的挑战就是要进行彻底的重组，让施乐摆脱对正在走下坡路的复印机业务的依赖，避免破产。此言一出，施乐股价在短短几个小时内暴跌60%。施乐发言人卡罗内(Christa Carone)说：“公司有人曾警告她说市场会做出很坏的反应，但她还是想开诚布公，让大家知道公司的处境。”
摩尔卡希还巡视了施乐在许多地方的分支机构，与员工进行交谈。卡罗内说：“她看著人们的眼睛，说道‘这将是你们一生中面临的最大的压力之一，如果你的心不在这里，就请走人。’”为了保证偿付能力，施乐取消了利润分红，将一半的生产业务外包，并将员工总数削减41%，降到58,000人。摩尔卡希如今已是公司董事长兼首席执行长，在她的带领下，施乐的债务负担减少了一半，并大举转向数字产品的生产，现金流也从零增加到2004年底时的15亿美元。
但首席执行长们即便坦言对公司的困境负责，他们也未必能保住自己的职位。理查德?布朗(Richard Brown)在2002年担任电子资讯系统(Electronic Data Systems Corp.)首席执行长时曾经历了一段很艰难的时期，当时WorldCom、United Airways和US Airways的相继破产对公司构成了沉重的打击，当公司未能达到当年第三财政季度收益目标时，他感到十分难过，他说道：“这让人心痛不已，有一种挫败感。”但他同时表示：“我要为此负责。”
据熟悉内情的人士称，当2003年初董事会要求他辞职时，他感到十分意外。（记者未能联系到布朗置评。）其中的一个原因是：他显然没有去寻求董事们的帮助，以制定一套挽救公司的策略，因此未能赢得他们的支持。
百事公司(PepsiCo)前任董事长兼首席执行长殷瑞杰(Roger Enrico)说：“没有人能成为宇宙的主人。”他当时也是要求布朗辞职的电子资讯系统的董事之一。殷瑞杰说，最有效的企业领导者应该知道自己的优势和弱势，在是否需要帮助的问题上要对董事会老老实实。殷瑞杰同时还是Target、Dreamworks和Belo的董事。
Quest Diagnostics前任董事长兼首席执行长肯?弗利曼(Ken Freeman)认为，高层管理者不仅对董事会要十二分地诚实，对员工和客户也必须如此，特别是在努力扭转企业困境的时候。
在他的早期职业生涯中，作为康宁公司(Corning)电视机用玻璃业务的主管，他必须让员工相信，如果不提高产品质量，他们就会失业。可当时这项业务的主管在他之前已经走了三个，因此“员工们都认为他们肯定会比我呆的时间长。”他说。
为了让他们相信这一点，弗利曼下令停工9天，并请来公司最大的客户和他们开会交流。当一位客户表示，如果不提高质量的话，他就不再购买康宁的产品时，“那些本来心不在焉的员工突然竖起耳朵仔细听起来。”弗利曼说。在接下来的一年时间里，他们重新改造了生产流程，解决了质量问题。
