Memo to the CEO: Get used to it. Managing expectations through a clear, precise and well-cadenced framework of communications is a big part of the game. And it’s harder than it looks. Yes, we know and respect that you earned the plum job the old-fashioned way: Extraordinary operating skill. Hard work. Good deal creation. Just a bit of luck and a touch of brass-knuckle internal politics, artfully delivered.
But headlines across the financial media still scream about the communications piece and the catastrophic downsides of neglect.
Ask Hewlett-Packard’s former CEO. He got ousted last summer on widespread stakeholder discontent when he failed to manage expectations with a stock-pummeling announcement that HP would end its tablet computer and spin off its PC unit. Or ask how Bank of America’s announcement of a $5 debit card fee for certain transactions is going down with Richard Durbin, the U.S. Senator from Illinois, who called on customers to dump the bank. And Sprint managed to crater its own share price just days after announcing it was offering the upgraded iPhone 4S, gaining a short-term pop, but failing to clarify expected upsides in earnings guidance later in the week.
In defense of the public corporation: Nobody argues that managing public expectation competently is easy. Beyond these high-profile national examples, all public companies face a daunting daily communications challenge in a hyper-linked digital age that can move shares like a roller coaster -- setting earnings expectations; calibrating a product launch; or making sure nobody in the political, regulatory or employee spheres is taken off guard with a facility opening or closing, a controversy about to spill over or a high-visibility application to make eyebrow-raising new moves.
Beyond the challenge of getting the content right lie several other hurdles: Selective disclosure laws are as strict as ever. Navigating serious differences of internal opinion not visible to pundits, critics and commentators presents real and complex impediments to the coherent outflow of good ideas. On a more mundane level, the consequences of a bungled effort to work expectations subtly and expertly behind the scene are fertile with career limiting possibilities. In reality today, working behind the scenes is a very late-‘90s practice with more downside than up. “Whisper numbers” and product guidance aren’t getting whispered much anymore. In the all-important playing field of competitive ideas, the uniformly disclosed public arena is where corporate messaging moves to break through in clarity or dissolve swiftly in the noise.
When it comes to good communication and public expectation management in today's world, it is important to recognize that they are essentially one and the same and take a twofold approach:
- Be in full agreement at the top regarding exactly what you plan to achieve and when and how you hope to achieve it, and be ruthlessly clear in public venues.
- Package that message in an externally thoughtful, well-sequenced and orderly framework. Get it to the right influencers at the right time. And accomplish that by using the abundant and available public tools and venues at your disposal.
Obvious? You bet.
Easy? Think twice and proceed mindfully.