Communicating the unpalatable: How NOT to be the ‘hired gun’

Corporate communicators often get stuck conveying the results of decisions they had no role in making. When shareholders get priority over staff and customers, spin happens. Try a new tack.

In Hollywood Westerns, the hired gun is called in to clean up the town after problems have spun out of control. (The problems usually involve a cattle baron.)

More often than not, communicators are the hired guns of business. Unless they have that coveted “seat at the table,” they are never part of the decisions they’ll wind up having to communicate. Even then, leaders often make misguided decisions and think the communications team can spin gold from them.

This hired-gun mentality is a key reason for PR pros’ reputation as spin doctors. The expectation from company leaders: “We screwed up. Make it sound okay.”

In today’s environment, that won’t do. Whether you work in marketing, PR or corporate communications, your involvement should begin early enough for you to have the opportunity to speak truth to power: “There’s no good way to communicate that.”

I’m not talking about communicating bad news. There’s no getting around the need to communicate decisions to cut staff, reduce benefits, recall a product or terminate a product line.

I’m talking about decisions, for example, to embark on a new course that customers, employees or other stakeholders will have to understand and support.

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The folly of SVE

One of the worst decisions a company can make, from a corporate communications perspective, is establishing shareholder value enhancement (SVE) as a core operating principle.

Companies functioning under the SVE model believe that the degree to which they enrich shareholders is the ultimate measure of success: Any activity, any purchase, any decision that doesn’t enrich shareholder value should be questioned (and probably discarded).

When I took charge of the employee communications department at a Fortune 500 pharmaceutical company in the early 1990s, the executive team had already decided to adopt SVE.

I was expected to communicate it. I was the hired gun.

Communicating SVE is a no-win assignment. I tried in vain to explain how absurd it was to expect employees to jump enthusiastically out of bed each morning, bursting at the seams with excitement to get to work so they could help investors get richer.

Oh, there were cases to be made, I was told. For example, employees were shareholders, too, through the employee stock ownership plan. (True, but few held enough shares for their own fortunes to be affected by a higher share price.)

A lot of investors were average people whose retirement savings were invested in funds that included our stock. (Also true, but again, our company’s share price wouldn’t make or break their retirements one way or another.)

A cautionary tale

Enron embraced SVE. Look where that got them. The laser focus on building profit overshadowed everything else, including ethical behavior and the rule of law.

Enron embarked on its SVE course about the same time as my employer. In both cases, the executive suite was dominated by numbers-oriented leaders who couldn’t see past the prospects of more black ink in the ledger. There was nobody at the table to serve as the company’s conscience, nobody to guide them through an exercise to uncover what could go wrong.

(If you want to know more about the idea of looking beyond the launch of a product or idea to determine why it will fail, listen to this episode of the Freakonomics radio podcast . This exercise—projecting yourself six months past the launch of the product or initiative and exploring the reasons it failed—should be part of any strategic planning process.)

The turning tide

Today, CEOs are lining up against SVE.

Most recently, Salesforce CEO Mark Benioff railed against SVE, saying, “The business of business isn’t just about creating profits for shareholders. It’s also about improving the state of the world and driving stakeholder value.”

According to a Steve Denning piece in Forbes , Benioff joins Jack Welch (GE), Paul Polman (Unilever), John Mackey (Whole Foods) and others in condemning SVE. Denning shares a laundry list of SVE’s drawbacks, including the diversion of resources that were needed for innovation, the pursuit of value extraction rather than value creation, and business’s current concentration of “short-termism.”

Twenty-six years ago, though, I already knew it was a bad idea because there was simply no good way to sell it to employees. Employees would have jumped out of bed every day, itching to get to work, if they knew they were doing it to improve the lives of people suffering from the conditions our medications addressed. An engaged staff whose personal values aligned with the company’s would have undoubtedly built great shareholder value.

Getting it right

Consider the Tylenol product-tampering crisis. Even though the only tainted product was in the Chicago area, company leaders ultimately decided to withdraw Tylenol from store shelves nationwide because its values put the health and safety of customers—not the wealth of shareholders—first.

In the short term, this meant a significant hit to the company’s bottom line. However, Tylenol also innovated the safety seal, and when the product was re-introduced to the marketplace, the company not only regained its lost market share, it stole customers from other products whose packaging didn’t feature a safety seal.

Ultimately, shareholders did quite well as a result.

The decision to introduce SVE had been finalized before my first day at the company, and communicating it was my job, so I did my best. SVE at that company crashed and burned. Despite ongoing communication and training, there was no enthusiasm for it.

Today, communications experts are pushing the idea that we ought to be more than hired guns. According to the Melbourne Mandate (adopted at the 2012 World Public Relations Forum by 800 delegates from 29 countries), it is incumbent upon communicators to “be guardians of the organization’s character and values,” “ensure organizational values guide decisions and actions internally” and “help leaders to uphold and communicate those values.”

Somebody undoubtedly will come up with the next SVE. With luck, communicators will be there this time to raise the issues that will head off the inevitable disaster that would follow. That’s a far better outcome than turning to a hired gun.

A version of this post first appeared on LinkedIn.

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