Executives behaving badly. Invariably, things go south when bosses get caught on social media doing something they shouldn’t. As we witnessed in the recent case of Andy Byron, ex-CEO of tech company Astronomer, even the Kiss-Cam can be a risk for public exposure.
We all know the story. CEO gets caught. CEO apologizes. CEO resigns under pressure from the Board. Interim CEO steps in and a search for the new boss begins. It’s a costly equation on both ends.
Other than hiring someone who is not going to engage in bad behavior in the first place, what can organizations learn from Astronomer’s recent situation to avoid those costs? Here are four essential plans you must have in place to weather the storm, control the narrative and trust your next company leader.
1. Why succession planning is important
Lesson No. 1 is to have a contingency succession plan in place in case something happens to the CEO that makes him or her unavailable for work. Whatever the reason – death, illness or simply bad behavior – Board members should mandate creating a succession plan in case of an immediate need.
The interim CEO could be another top manager, a Board member or a private equity principal. Whomever it is, successful succession planning means making sure the strategy is clear and communicated in advance throughout top management as to who would be temporarily in charge, so the transition is as seamless as possible.
2. How sharp is your crisis management plan? Be ready
Crises that arise on social media are particularly difficult to contain and get ahead of as they break so quickly and can go viral anywhere across the world in minutes. This allows little time to research the issue, determine its validity, establish a position and create messaging to curtail it.
Make sure your crisis management plan has a process in place to quickly reach those you care about most. The Board, senior management, key investors and top customers should be on a prioritized list that is updated at least annually. As seen in the recent Astronomer example, news on social media travels fast – so make sure your crisis management plan includes an organic social media strategy.
Having an established crisis management team that you can activate at a moment’s notice is critical to ensuring everyone gets on the same page and can act quickly. Key members of the crisis management team typically include top management (CEO, CFO, CMO, etc.), legal, HR and communications. In a case such as Astronomer’s, where the CEO is the crisis, an interim leader should be named quickly (see succession plan above).
3. Steer the story with a successful PR, communication plan
Some argue there is no such thing as bad publicity. But for the sake of argument, let’s look at how Astronomer Interim CEO Pete DeJoy addressed this situation and the sudden change in leadership. In a LinkedIn post, DeJoy took the opportunity to speak about the company’s history, the resilience of its people, its commitment to customers and even a bit about what they actually do.
Beyond LinkedIn, many major media outlets also picked up DeJoy’s post and gave Astronomer vast publicity that, as he notes, while the cause was negative, the exposure made the company a household name.
Then came Gwyneth Paltrow.
To help steer the story, Astronomer hired Ryan Reynolds’ production company, Maximum Effort, to create a self-aware ad that leaned into the absurdity of the debacle. The spot poked fun at the incident while subtly explaining what Astronomer does, earning praise for its humor and transparency. More importantly, it helped the company control the narrative, turning a viral moment into a brand-building win.
The lesson? Be ready to pivot quickly if the actions of an individual bring unusual attention to your company. There may be an opportunity presented you hadn’t considered.
4. Stick to your HR plan: Make your policies crystal clear
Companies, in particular startups like Astronomer, are often and understandably focused entirely on running their business, being innovative and driving revenue. In many instances, ensuring professional and operational rigor is an afterthought when focusing on business-critical functions and growth. While it is unclear whether Astronomer had a formal succession plan or just a rapid crisis response, it emphasizes the importance of having both.
While it appears Astronomer had policies in place that prohibited this kind of behavior, it’s always a good idea (particularly as a company grows) to examine your HR, finance and sales policies to ensure expected behaviors are clearly outlined in a detailed human resource strategy. Ask yourself:
- How good are your financial controls? Do you have more than one person who can approve major expenditures? Do you have an accounts payable vendor that is accountable for maintaining financial chain integrity?
- Do you have multi-factor identification to access your IT systems? Do you regularly test your IT systems for vulnerabilities? Do you have outside legal, IT and communications counsel on retainer for possible cybersecurity events?
- Is there clear guidance on your approach to giving and accepting gifts from clients? Are your sales and purchasing policies in compliance with applicable regulations such as the Foreign Corrupt Practices Act, a federal law that prohibits bribery of foreign officials to obtain or retain business?
In the end, there are always exceptions to the rule. Examples of bad behaviors that go public provide a reminder that humans will sometimes do crazy things. Good operational structure with policies that are enforceable and meaningful can help remind employees of the guardrails they all need to stay within.
If you’re interested in learning more about succession planning or crisis communications, reach out to Falls & Co. today.
