What does Disney president Robert Iger have that Ford CEO William
Clay Ford Jr. doesn't? Judging from recent interviews, the answer lies
in the fact that Iger thinks he has the Harry Potter touch, while Ford
Jr. admits that sorcery is not in his armory.
"We have the magic wand," Iger told a New York Times journalist on
January 7, denying that Disney is weak enough to be a potential takeover
Less than a week later, Ford Jr. told journalists that he "has no magic
wand." What do those statements make you think of the two leaders? Which
would you be more likely to trust? Ford? Me too.
Iger would probably argue that this was just a wordplay on the idea that
Disney has the potential to extend its franchise. But it was a strange
choice of phrases for a figurehead whose company's stock price has
dropped 28% in the last year, and a classic example of the
comes-back-to-bite-you-in-the-ass hyperbole that CEOs should be advised
If further evidence were needed of the danger of such statements,
witness the travails of Hewlett-Packard's Carly Fiorina, Newell
Rubbermaid's Joseph Galli, and Cisco's John Chambers.
Fiorina seriously damaged her credibility when she spent most of 2000
engaged in the equivalent of a boxer's prefight hype, only to admit in
November that it hadn't been a knockout year for HP. "We recognize we
let you down," she told disappointed investors, but her contrition
wasn't enough: HP lost $23 billion in market cap by the end of
the day of her announcement. Of course, this is partly because the
numbers came up short; it was also because some investors had started to
doubt the company's leader.
Galli is facing similar problems, as he did little to discourage the
idea that he is the "sultan of sizzle," and did much to encourage the
idea that he was going to prompt a radical turnaround in Rubber-maid's
fortunes. He predicted earnings of $1.70-$1.80 a share,
then cut that to $1.50-$1.65 in May.
In July, it was between $1.20 and $1.30. Suffice to say,
analysts are starting to question his credibility.
And then there's Chambers, currently making a play for the
optimist-of-the-year title by suggesting that Cisco can "change the
world," and that its "best years are in front of it." Will he regret
pinning his colors to 30%-a-year growth rates? Such bold predictions
prompted Business Week to run a cover story questioning whether Cisco is
worth 95 times its earnings.
Coverage will only get worse if Chambers can't deliver something
approaching his promises.
Are these CEOs compulsive optimists? Setting targets and aiming high -
classic traits of natural salespeople like Fiorina and Galli - is
important, but as any serious PR pro will tell you, effective
communication depends on honesty, not hyperbole.
James Kilts, CEO of Gillette, is one who has recognized the importance
of not getting in what he calls "the circle of doom" that is
Kilts' is a good communicator, but he's not writing verbal checks his
corporation can't cash.
AOL Time Warner CEO Richard Parsons is hoping his own honest, realistic
approach will bridge the credibility gap that has appeared between his
corporation's bold claims for its merged future, and the reality as
encapsulated by the figures. "We will try not to over-promise," Parsons
vowed last Monday, "and we will deliver."
Simple as it might sound, Parsons' comment says it all, and is an
excellent mission statement for any young PR professional.