I hope that as the financial markets and economy swooned, ex-Merrill Lynch CEO John Thain looked nervously at the goods that comprised his $1.2 million office refurbishment. AIG got rapped on the knuckles for its post-bailout retreat, the media lambasted the Big Three for their profligate private jets, and Citigroup had to throw up its metaphorical hands at the delivery of its own, previously ordered private jet.
True, Thain did refurbish his office about a year ago, when the market was not in a free-fall. However, he should have heeded the lesson of Dennis Kozlowski before ordering that $35,000 commode.
Kozlowski, the famously spending and celebrating ex-Tyco CEO and current inmate, spent $6,000 on a shower curtain, something that will undoubtedly be featured in the first few paragraphs of his obituary.
Thain's hiring of Sunshine, Sachs & Associates means he does not plan to go quietly into forced retirement; he wants a third act. But to determine the messaging and tone, he and the companies affected by spending-excoriating press will require a new script.
What is apparent is that the financial communications and crisis management playbook must be destroyed. Communications once intended for the investment community or senior business leaders now reach the entire population because, the thinking goes, every taxpayer contributed to that commode (even if that's not true.)
This involves much more handholding than previously used. Take, for instance, the multiple billion-dollar bonuses given to Merrill Lynch management at the end of the year. You can talk as plainly and convincingly about the imperative of bonuses to retaining talent and you can elucidate how the bonuses went to outperforming divisions of the business. Just know that you will be making this case in front of an audience that is simultaneously, angrily screaming “Multiple billion. Multiple billion! MULTIPLE BILLION!”
This audience will usually not have the same baseline of understanding the traditional business community has.
Even if a CEO is being asked top-level questions that might go over the heads of the average person, that CEO and his communications advisers have to do their best to reformulate language so it's understandable by all.
The challenge Thain must meet applies to all US companies. Communicators must insist their clients or bosses explain purchases or bonuses before it becomes a sensational news item. And, of course, they should refrain from pursuing anything that might be viewed as wasteful spending in this climate. Kozlowski spoke from jail in November 2008 about the excesses of corporations in this depressed economy. I don't think anyone wants to be in a situation where they are being lectured about parsimony from a man who spent $2 million, half of which came from his company, on his wife's 40th birthday party.