Unintended Message Effects
When CEOs speak at investment conferences, they sometimes say things that send the wrong message to the folks back at the office.
For example, just months after the Qwest/US West merger in 2000, CEO Joe Nacchio told investors at a Banc of America Securities Investment Conference that most of the layoffs he anticipated would occur among the ranks of former US West employees. He then added that: "Because you wear a clown suit doesn't mean you work for the circus. We'll take off the suits and get down to work, then we'll send out the clowns."
Although the comment is somewhat cryptic, to thousands of former US West employees, Nacchio's meaning was clear: "You are clowns."
As reported by the Denver Post, the comment quickly became "an irksome legend within the company."
Some workers pasted pictures of Nacchio's face over clown suits, tacking them to lunchroom bulletin boards. Others scribbled clown faces on notes, sticking them on their computer monitors before walking out in a day-long protest.At a time in the company's history when productivity and morale were more important than ever, a glib comment from the senior leader produced just the opposite effect.
More recently, Goldman Sachs CEO Henry Paulson, invoking a variation of the 80/20 rule, told an investment conference in January that "in almost every one of our businesses, there are 15 or 20 percent of the people that really add 80 percent of the value." According to the New York Times:
Many of the firm's employees...were distressed and angered by Mr. Paulson's comments. Some said they thought his words contradicted Goldman's "we're all in this together" ethos. "Internally, it was a real problem," one high-ranking employee said. Another Goldman employee said: "People here are very upset. We've always been told that it's about teamwork and not a star system."But Mr. Paulson and Mr. Nacchio come from two very different schools of leadership. When Paulson learned how employees had interpreted his comment, he responded in an unorthodox but impressive fashion: He sent a voicemail message to all of the firm's employees in which he apologized. According to the Times, Paulson said he had responded to a question about the prospect of more layoffs with "a glib and insensitive response." He added that he was "profoundly embarrassed about my choice of words," and asked employees to "please accept my apologies and gratitude."