PR TECHNIQUE: Communicating the departure of senior execs

When the senior management of a company leaves (or is forced out), keeping employees informed so they can continue to do their jobs is top priority.

When the senior management of a company leaves (or is forced out), keeping employees informed so they can continue to do their jobs is top priority.

When a key executive leaves a company, regardless of the reason, the remaining employees can be left with a great deal of confusion. Deflated morale, rumors, and anxiety about the security of other positions can escalate if the situation is not handled properly. To ensure the transition between the departed and the replacement goes as seamlessly as possible, corporations need to channel the necessary resources into effectively communicating with their staff. HealthSouth Corporation recently enlisted Euro RSCG Life NRP to assist in its uphill communications battle after being charged by the SEC with a major accounting fraud. When it was reported that HealthSouth CEO Richard Scrushy and other senior executives overstated earnings by $1.4 billion since 1999, Scrushy and former CFO Weston Smith were placed on administrative leave. Arriving one day after the story broke, NRP president Susan Noonan and SVP Ernie Knewitz worked on-site at HealthSouth's headquarters, where they joined the company's in-house PR staff of six. The communications team reported to the interim CEO, and while it was broken down by audience focus, Noonan says communicating with HealthSouth employees was the most important and immediate area of concern. "Essentially, HealthSouth's product is treating patients, so it was so critical that employees were not quitting right and left," explains Noonan. "People were understandably angry about what the former management team did, but we had to get them to focus on getting back to business so that patients did not go without service." To help keep employees focused on the job at hand, and not caught up in the politics of personnel changes, companies should have arrangements for substitute leadership - temporary or permanent - even before anything happens. At HealthSouth, board members Robert May and Joel Gordon were appointed acting CEO and chairman, respectively, while the company conducted a search for a new CEO to replace Scrushy. "You need to make sure that whoever is put in charge understands that employee communications needs to be a part of their daily calendars during these times, even if it hasn't been in the past," says Don Etling, who heads up Fleishman-Hillard's internal communications practice. "If a leader spends all their time communicating with the outside world, the faces of the company are not going to be in line with whatever that executive is out there talking about." Chris Atkins, director of Ketchum's global corporate practice, agrees. "The one thing that will ruin productivity within an organization is uncertainty. Employees get paralyzed when they don't know what's going on around them," he says. Within days, NRP orchestrated a meeting where employees could meet the interim executives and hear about their plans for the company. A video of May and Gordon discussing how they hope to turn HealthSouth around could also be seen on the company intranet, as well as on a closed-circuit TV show that runs throughout HealthSouth facilities. The agency also set up a hotline that employees could call with questions and suggestions, and FAQs collected from the calls were posted on the intranet. The communications team did its best to call each employee back with a response. Noonan says that providing HealthSouth employees with such an outlet for reacting to the situation helped the communications team too, as it served as a virtual barometer for measuring attitudes within the company. In turn, NRP was able to adjust its strategy accordingly. Etling agrees, "Listening and being responsive has got to be a priority when there are personnel changes. The behavior displayed by the remaining management and the replacement or interim executive should reflect the behavior they are seeking from all employees. If your company espouses open communications, office doors of those in charge should always be open." At HealthSouth, the communications team sent letters to employees, stating that finding a permanent replacement for Scrushy was a high priority. Also signed by the interim CEO, the letters informed recipients that an executive search firm was working to find someone. "Especially when a senior executive leaves for difficult or controversial reasons, the management left in place needs to be out there early and often, informing employees about the steps being taken to find a replacement," explains Atkins. "This reassures people that no one person is indispensable." He adds, "You want to be in a situation where the company can still operate successfully, even in the absence of its most senior executive. If a CEO does depart, you stand a better chance of maintaining credibility with outside audiences if employees have not been kept in the dark about the company they work for." Of course, not every executive departure is sudden, nor the result of corporate misdemeanor. When Fleet merged with BankBoston, Fleet CEO Terry Murray was succeeded by Chad Gifford, former chairman of BankBoston. Although the change was agreed upon at the time of the merger, which took place in 1999, Gifford did not officially take the helm on his own until January 1, 2002. Murray remained with the new entity, FleetBoston Financial, as a member of its board. "Since Chad was already affiliated with the company, we were not dealing with a complete unknown," explains Carol Clingan, director of strategic communications for Fleet. "But we knew we still needed to foster our culture of accessible leadership during this time." Internal communications were handled in-house during the overlap period. An interview with both Murray and Gifford appeared in a company newsletter. Additionally, "town meetings," as Fleet calls them, were held periodically to give employees the opportunity to sit down with the senior executives in a smaller setting. At the meetings, which Murray and Gifford led separately, the executives discussed what was happening with leadership and in general at the company. Employees were also given the chance to ask the new and old CEOs questions about how the changes would affect them directly. ----- Technique tips Do make sure that it is clear to employees who the interim leader is until a permanent replacement is found Do keep employees focused on the job at hand whenever there is a shift in leadership Do make internal comms a priority - even if it wasn't before - whenever a senior-level employee leaves or joins the company Don't spend time talking about the departing senior-level person once they've officially left Don't allow employees to get caught up in the politics of why certain executives left Don't keep less senior employees in the dark regarding finding a replacement for a departed executive

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