A Sharp-Tongued CEO, An Asset Or A Ticking Time-bomb?

“If this is such a Siberian salt mine and I am such an ogre, then why are they still working for the airline? If any of our fellas aren't happy with the current arrangement then they're free to go….”

"We use our own biros and I tell the staff not to buy them, just pick them up from hotels, legal offices, wherever..”

“Boeing had their chance. Eventually you lose interest, dealing with a bunch of idiots who can’t make a decision…”

The above-mentioned three quotes are not from a disgruntled manager at an organization, nor are they from someone who’s had a little too much to drink the night before. These ‘pearls of wisdom’ or ‘shotgun blasts of nastiness’ are from the CEO of one of Europe’s most profitable airline. Yes, Michael O’Leary built up a business that is wildly successful, but at the same time, ratcheted up his nastiness with each Ryanair flight that took off.

Source - corporate.ryanair.com

Now, you wouldn’t expect a well-heeled CEO heading a game-changer of an organization in the transportation industry to mouth such inanity, would you? But then you wouldn’t expect him to also register a Mercedes Benz S500 as a taxi just so that he could speed up by using Dublin’s bus lanes in order to get past pesky traffic! Michael O’Leary is a fascinating character. An ace businessman, a financial wizard, but is he also the CEO who’s actually detrimental to the health of his own organization? My colleague Vivenne Raaijmaker asked whether O’Leary’s verbal bazookas had hurt Ryanair’s image and whether any apology from the Irishman would simply do nothing to heal the Airline’s battered reputation? I take this further, shedding light on how being perceived as offensive or arrogant, especially when a CEO is seen to be adopting that stance, can hurt corporate reputation. 

Source - campaignlive.co.uk

Humility goes a long way

According to Denner, Heitzler, and Koch (2018), a CEO’s image is closely linked to that of his organization. Thus, purely by association, it is not a stretch to imagine that Ryanair is cavalier, irresponsible, and arrogant, just like it’s top boss. Zhang, Ou, Tsui, and Wang (2017) argue that humility on part of the CEO can actually be beneficial to the organization’s image, helping it to project itself as being ‘innovative’ and ‘productive’. It also allows stakeholders and the general public to evaluate the organization in complimentary light. Now, there are a lot of people who consider a humble CEO to be a myth. But even a veneer of humility is at times enough to help project a positive image. Take the case of Delta Airlines’ CEO Ed Bastian who recently directed all executives of the Organization to fly economy class for flights under three hours. Bastian, himself ‘squeezes’ into an economy class seat when he travels on business and this has been well-publicized by the Airline. Delta’s current reputation seems to firmly lie in the ‘favourable’ camp and the CEO’s image of being ‘just another passenger who flies coach’ is definitely helping.

Source - The Washington Post

Losing the arrogance doesn't hurt

Henderson (1997) submits that it is essential that CEOs drop arrogance in favour of a more approachable style especially when dealing with stakeholders during and in the aftermath of a crisis (in this case most of Ryanair’s pilots being forced to go on leave due to a rostering error) in order for their organization and its activities to be perceived positively.  O’Leary’s rather limp apology, his subsequent scramble to construct weak alibis (blaming the weather), and his bizarre utterances in the media, have all led to Ryanair being caught in an almost-unending spiral of bad publicity and a battered reputation.

Source - The Guardian

Being CEO is tough, O'Leary makes it tougher

Airline CEO's are supposed to have one of the toughest jobs in the world. Making a success of an airline is no mean feat, but is financial success the only indicator of favourable reputation for an organization? Creating a likeable persona, a reassuring environment where customers/stakeholders/publics feel like they are being listened to is a key driver of organizational reputation. Ryanair and Mr. O'Leary seem to have gotten it horribly wrong. The Airline was one of the last to establish a social media presence, doing so only in 2013. To top it, they put the famously offensive O'Leary on Twitter for a chat session. What ensued were more pyrotechnics, a lot of swearing, and another deep cut to the Organization's reputation stunningly by the Man who is entrusted with safeguarding it!

About the author - Chinmay is a Master's student at the University of Amsterdam. Having served as a journalist with one of India's leading English dailies, he has also driven communications for two of India's leading conglomerates' sports divisions. He is passionate about sports, cinema, and communication. 

References

Denner, N., Heitzler, N., & Koch, T. (2018). Presentation of CEOs in the media: A framing analysis. European Journal of Communication, 33(3), 271-289.

HENDERSON, K. (1997). CEOs on the stand: How to help your company's exec get beyond arrogance. Business Law Today,7(2), 20-23. Retrieved from http://www.jstor.org/stable/23290657

Zhang, H., Ou, A., Tsui, A., & Wang, H. (2017). CEO humility, narcissism and firm innovation: A paradox perspective on CEO traits. The Leadership Quarterly, 28(5), 585-604. doi: 10.1016/j.leaqua.2017.01.003

Shooting yourself in the foot, the Dassault way

A hundred supersonic fighter jets, two brothers jousting over a multi billion-Dollar business empire, a Prime Minister with 44.1 million Twitter followers, a former President who alleges unilateral force dictating a deal, and a political minefield. Now that’s quite a cast for a rather racy Hollywood thriller. In fact, they are just the players in a controversy that has engulfed India, is threatening to spread to France, while putting a massive corporate organization into a nose-dive.

Source - Amul

First things first, France’s Dassault Aviation is one of the world’s foremost manufacturers of fighter and commercial aircraft. The Company first agreed to sell 126 'Rafale' fighter aircraft  to India in 2012 in a deal worth an astronomical 10.2 billion US Dollars. Fast forward to 2015 and India’s prime minister Narendra Modi, he of the gargantuan Twitter following, renegotiated the deal to include only 36 aircraft. Quite the cut, surprising considering the fact that India would still need to pay 8.7 billion USD for the 36 fighters. According to Indian law, Dassault (the corporate organization) would require an Indian partner. This partner amusingly was one that had no previous experience in defence manufacturing, let alone complex fighter aircraft. Currently, the Indian parliament is ablaze with allegations of corruption, kick-backs, and crony-capitalism. Muck is flying thick and fast about Dassault  being allegedly complicit in under-hand dealings. 

Source - The Indian Express

The reputation of the organization has taken a severe beating, but apart from a few squeaks, it doesn’t seem to be doing too much to repair it.

Timothy Coombs (2007) in his oft-cited Situational Crisis Communication Theory (SCCT) posits that organizations need to be quick to adopt a frame for their crisis. Either the organization could apologize, deny, or find a scapegoat. It is imperative for the organization to adopt a narrative, but more importantly stick to it. Dassault’s handling of the Rafale crisis seems to be anything but ‘holding firm to a narrative’. The Organization was content to let the Indian and French governments take centre-stage, allowed their Indian partners to spin a story where they absolved themselves of culpability, and showed a reluctance to put their side of the story forward.

 Source - NDTV

A ‘para-crisis’ is another concept propounded by Coombs (2012). A ‘para-crisis’ is not really a crisis but looks like one. It has the potential to snowball into a crisis if effective action is not taken. Dassault’s Rafale fiasco is a shining example of a ‘para-crisis’ which was almost ‘wilfully’ allowed to mitigate into a devastating inferno, which threatens to consume the Organization’s credibility itself.

In an age of new-media, Dassault could have blitzed their social media channels with strong denials, scapegoated the Indian government, or built a narrative of being forced to partner with a dubious entity positioning themselves as the 'victim'. As van der Meer (2016) states, the Organization’s narrative on social media is an important contributor in the stakeholders and public’s adoption of a frame. Dassault so far has failed to even attempt to construct a frame. The only press release that Dassault released fails to include even their CEO’s comment on the whole controversy and there is no effort towards framing Dassault as the innocent party.

Source - www.dassault-aviation.com

Yes, defence deals in developed nations are tricky with serious allegations (whatever their merit never far). However, communication practitioners in organizations like Dassault have to understand that leading the narrative is the key. A clear and strong narrative allows the organization a shield against allegations, counter-claims, and allows for more avenues of attack (in a strictly communicational sense). Unfortunately, funnily for someone who produces cutting edge weaponry, Dassault's communication strategy does not even fire blanks! 

Academic References; 

van der Meer, T. (2016). Public Frame Building: The Role of Source Usage in Times of Crisis. Communication Research, 45(6), 956-981. doi: 10.1177/0093650216644027

Coombs, W. (2007). Protecting Organization Reputations During a Crisis: The Development and Application of Situational Crisis Communication Theory. Corporate Reputation Review, 10(3), 163-176. doi: 10.1057/palgrave.crr.1550049

Coombs, W., & Holladay, J. (2012). The paracrisis: The challenges created by publicly managing crisis prevention. Public Relations Review, 38(3), 408-415. doi: 10.1016/j.pubrev.2012.04.004

About the author - Chinmay is a Masters student at the University of Amsterdam. Having served as a journalist with one of India's leading English dailies, he has also driven communications for two of India's leading conglomerates' sports divisions. He is passionate about sports, cinema, and communication.