News analysis: Burberry fumbled CEO succession comms

Burberry mishandled this week's announcement of the resignation of its long-serving CEO and her replacement by its creative director.

Christopher Bailey: taking over as Burberry CEO
Christopher Bailey: taking over as Burberry CEO

The company frustrated key media by dealing with Angela Ahrendts' departure and Christopher Bailey's elevation in a corporate video posted online [see below]

"Quite a few business journalists were cross that they weren't being given one-on-one interviews with her," says Mary Whenman, managing director of corporate, financial and public affairs at Weber Shandwick.

A Burberry comms staffer explains the company decided to do the video in order to reach as many audiences as possible as it feels video plays an important role as a communications tool.

In the video the role of interviewer was played by Burberry chairman Sir John Peace and Whenman said this made it feel too much like an internal comms production. 

Cohn & Wolfe corporate affairs managing director Andrew Escott believes the video was a "nice touch, if a little forced".

There is also criticism of the way that Burberry managed the public transition of Bailey from creative director to CEO. 

The company's share price dropped by over the two days following Tuesday's 7am announcement by 10 per cent at one point. This shows it needs to learn a lesson about having its reputation so closely tied to its leader, according to Reputation Inc CEO John Mahoney.

"It demonstrates the critical role that managing your reputation can have on share price performance," he says, arguing the next generation of companies would move away from "the cult of CEO-dominated businesses".

Burberry has a policy of only allowing Arendts, Bailey and CFO Carol Fairweather to do interviews.

Issues for Bailey

Bailey has not had much contact with the business media, which needs addressing as his suitability for the CEO role and the fact he will also retain the creative director role could be a matter of concern for Burberry’s investors. 

Escott says: "Perhaps Burberry could have given Bailey a platform earlier on to demonstrate his abilities amongst the world’s business media, but a figure as interesting and talented as he will clearly cut through in this area; he just needs to focus on refining his image to that of a CEO."

The problem for Bailey is he came across as being in Ahrendts’ shadow in the video, says Whenman, who suggests they should have been separated.

"It would have allowed Arendts to talk more about Apple," she says. "I can imagine Apple would have been frustrated by the coverage because it focussed on Burberry’s loss. Putting the creative director in the CEO role is a difficult sell and would be a challenging message for any business, and that needed to be dealt with with Bailey on his own."

Despite these concerns, the change is unlikely to mean a comms shake-up at Burberry, according to the company's comms staffer, who points to Bailey's work with Ahrendts moving the brand away from the over-exposure it had suffered from and pioneering its digital marketing and communications.

Consumer brand specialist and John Doe CEO Rana Reeves agrees, saying: "Ahrendts probably handled the politics of the change at Burberry while Bailey changed the product but the organisation is now one that is used to doing things in the way they’ve set up. And he’s the face of the brand."

The question Burberry will find out the answer to over the coming months is whether he can be both the face of the brand and of the business.


 



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