EDITORIAL: CEOs' eating words doesn't instill trust

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

to avoid.

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.

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