With the economic downturn on the minds of consumers, shareholders, and other corporate stakeholder groups, it's important for companies to communicate stability. Therefore, companies undergoing leadership transitions are increasingly using months-long introduction periods and a mix of traditional and social media outreach to show that the new CEO is the right person for the job.
Leo Apotheker officially took over as CEO of SAP in May. The Germany-based business software company worked with Burson-Marsteller using a yearlong co-CEO partnership, various events, and a combination of traditional and social media strategy to reassure stakeholders about its new leader, even during extraordinary economic circumstances.
Yet, unlike when Apotheker's predecessor was introduced in 2003, the company employed social media platforms as well as prominent media outlets. The new chief executive's personality was a good fit for blogs and talk shows, says Herbert Heitmann, SVP of global communications at SAP.
“The advantage was that we had a full year to prepare for this. [Apotheker and former co-CEO Henning Kagermann] ran the show together for a year as co-CEOs,” he says. “This was the first time [in introducing a CEO] that we made very active use of social media. That worked particularly well because he is a very outspoken executive, and you know the blogs love that more than anything.”
Building a personality
SAP's use of the introduction period also allowed the company more time to familiarize stake-holders with its new CEO. Because consumers and employees alike trust known personalities more, the tactic served the company well in establishing Apotheker as a recognized entity, says Brian Lott, SAP global client leader at Burson and MD of its San Francisco office.
“I think people are clinging to what they know, and we wanted to make sure that Leo was a familiar face,” he adds.
The recession has also created a very anxious global workforce. Therefore, new CEOs should focus some attention on employees, specifically listening to their concerns before making policy, according to Matt Gonring, consultant at Gagen MacDonald.
“Once [the new CEO] is in that chair, it's a good opportunity to have them listen to their constituents, specifically the workforce and the marketplace,” he says. “Typically, one of the first opportunities for a new leader is face time with the workforce. That's fundamental – we always counsel executives to do more listening than to try to articulate strategy and policy because that's likely to change.”
A company that has not switched CEOs in a number of years might also find that the media environment is drastically different than a few years prior, with many bloggers and social networking Web sites serving as key influencers. Companies are often finding that aggressive outreach to bloggers is also positive, Lott adds.
“There was also a much more aggressive effort to introduce the bloggers to Apotheker's style and his vision so they would be comfortable with it,” he says.
However, there are also a number of possible communications pitfalls during a transition period. While social media creates opportunities for companies to reach internal and external stakeholder groups, it also can result in information being quickly leaked to outside blogs and Web sites, says Paul Jensen, EVP and GM of Weber Shandwick's New York office.
“Companies need to be aware that they can't communicate to their internal audiences in advance of their external announcement and expect it to stay contained,” he says. “There was a time when that was more doable.”
The recession has also resulted in many companies, and entire industries, shifting their business strategies. New executives, especially those replacing popular forerunners, also have to emphasize that their skills, albeit sometimes different, benefit the direction of the company, Jensen adds.
“A company is trying to communicate three things: One is that now is the right time for a leadership change, and two is that the new CEO is the right person for the job today versus what the job may have been two or three years ago,” he says. “Three is [the message] that this is a well-thought-out succession plan.”
Comms guidelines for a transition of leadership
Incoming CEOs might have different skill sets than their predecessors. A comms team should tie the new executive's skills to the challenges and opportunities ahead.
Due to the recession, stakeholder groups are anxious about a company's future. Therefore they're looking for continuity in comms themes .
It's imperative for companies to reassure stakeholders that the transition process was meticulously planned.