When an FBI sting operation broke in September 1998 near the waters of Bay Ship Management Inc., President Eugene Rose knew he needed professional support.
The feds were interested in a handful of the 50 employees of the Englewood, N.J.-based contractor that manages ships for the Navy, investigating them for allegedly accepting kickbacks from subcontractors and for falsifying expense reports billed to the military.
Rose retained an independent legal counsel to conduct an internal investigation, and a CPA to scrutinize and modify his firm's procurement system. Then he drafted a press release and hunkered down next to the phone, prepared to field media calls personally.
Rose assumed the onus was on him as CEO to become the embodiment of his company's public image. While this approach may work for charismatic types like Southwest Airlines' Herb Kelleher, Apple's Steve Jobs and the legendary Lee Iacocca, it can be a risky venture for less savvy orators, particularly when there's a crisis involved.
"Ninety-nine percent of the time, the CEO should not be the main spokesperson [in a crisis]," says Larry Smith, president of the Institute for Crisis Management in Louisville, Ky. "Your spokesperson should be someone high up who has credibility, but not the top person. It's better to reserve your CEO as a safety net. That way, "if someone makes a statement that needs to be corrected, the CEO can step in," Smith says. Deploy your top gun first and you've got no ammunition left.
Another reason to reconsider the strategy: your CEO may or may not be the most credible source on the issue. A recent credibility study conducted by PRSA revealed that alternative spokespersons often score higher points with the public. "You may want to have your chief scientist if it's an environmental issue, or a member of your board if it's an issue of fraud or governance," says Jack Bergen, head of the Council of PR Firms. "The head of your board's audit committee will often carry more weight than the CEO."
Of course, there are cases in which the CEO is the most appropriate mouthpiece - particularly in severe crises that involve deaths or threats to public health. When a spill from an Ashland Oil tanker polluted Pittsburgh's water supply in 1989 (roughly a year after Exxon-Valdez, Ashland's then-CEO John Hall flew to Steeltown, issued a public apology, and assured city residents that the situation would be fixed. But he also nipped any hopes for a miracle fix by clarifying that the process would take some time. "He took an honest approach. This turned into a one-day story in terms of its crisis appeal," Bergen says.
Smith cites Delta Airlines' crisis plan as another good model. In the event of a plane crash, Delta's CEO will commandeer the first flight available to the scene to express sympathy and concern for those involved. "He will then introduce the airline's designated spokesperson, and leave - perhaps to visit personally with families of crash victims, or to communicate with investors."
The key is for the CEO to be seen as "the senior person in the company and to be showing a sense of leadership," whether or not he or she is acting as spokesperson, Bergen says. "In some cases, [taking interviews] can be counterproductive because the CEO needs to be in the middle of solving the crisis and attending to operational duties." This requires tact, however. An exec who appears to be hiding can spur a feeding frenzy in the press. "If they think you're afraid to talk to them, they'll become more aggressive," says Smith. "Look at Bill Clinton."
Brilliance or Bust
When it comes to spokesperson etiquette, decisions should be made subjectively. "It's easy to envision a scenario in which a communications person follows the 'rule' that the CEO must speak, and puts a defensive, combative, aloof CEO on television - and winds up with a more difficult problem than they started out with," says Ray O'Rourke, executive vp, managing director at Burson-Marstellar. "But the question [of whether the CEO should act as spokesperson] shouldn't resolve itself in terms of a simple yes or no. The CEO isn't a theoretical being. It's a real flesh and blood person who is or isn't an effective communicator. Assessments need to be made, especially about that person's ability to communicate empathy on television."
One thing is certain. Bay Ship Management's Rose probably could have benefited from such an assessment prior to an Aug. 19 press conference, in which FBI officials announced the indictment of several former Bay Ship employees. Although the company took corrective actions last year and is not a target of the current investigation, its culpability was misrepresented last week when CNN inaccurately reported that the firm had been named in the FBI indictments. This occurred, in part, because Bay Ship's official statement was not immediately posted on its Web site - an "oversight" on Rose's part.
Rose's spin reflexes also aren't the finest. When asked by PR NEWS if he planned to hire an outside PR counsel, his response: "No. With the money they make? When they [the press] put me out of business, I'll start my own PR firm." (Bay Ship Management Inc. 201/871-8900; Institute for Crisis Management, 812/284-8351; O'Rourke, 212/614-5240; Council of PR Firms, 201/587-1567.)