Thursday, February 13, 2014

A CEO Finally Did It Right!

                 Finally, a Corporate CEO did the right thing, in the right way, after explaining a corporate decision terribly inappropriately and talking too bluntly about it publicly.
            By now, you’ve heard about the very public “foot in mouth” comments by AOL CEO Tim Armstrong.  In case you’ve been out of touch for a couple of days, here’s a quick recap.

            In recent months at least two employees of AOL or one of its subsidiaries have had children with major medical expenses.  One was born four months premature and suffered complications that could have led to its death.  In fact the family was told their little baby girl had a one in three chance of dying before she was strong enough to go home.

            But with a little miracle and very dedicated healthcare professionals working around the clock, the infant is flourishing and home with her family.

            Now, how could such a happy ending cause so much grief for AOL’s Armstrong?
            Last week Armstrong was speaking to a “town hall” of AOL employees and announced he was cutting their 401 (k) benefits and linked his decision to two employee families with sick infants. 

            One mother, Deanna Fei reacted publicly and strongly in a first-person story for the on-line magazine Slate.  She took exception to what Armstrong said in his town hall comments saying “how (he) exposed the most searing experience of our lives . . . for no other purpose than an absurd justification for corporate cost cutting.”
            She said when she heard about his comments and justification for the benefit reductions, “It just seemed so completely dehumanizing . . . “ and “ . . .a violation, for singling us out for using the health plan we paid for.”

            By Sunday, Armstrong not only decided to reinstate the 401 (k) benefits, but he telephoned Fei, with what she described as a “heartfelt apology, saying he was sorry for telling staff that costs associated with two employee’s sick infants formed part of the reason for cutting” everyone else’s benefits.
            She would not go into detail about what he said to her, but she said he spoke to her “as a person to another person,” and not as a CEO.  “His apology was heartfelt and I appreciated it,” she said.
            When the company announced it would not cut 401 (k) benefits, Armstrong was quoted saying, “I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit program.”

            A company spokesperson confirmed Armstrong had contacted both families and apologized.

            Better planning and a more thoughtful message announcing the benefit cuts would not have eased the potential financial loss to employees, but would have led to some disappointment but not the kind of negative public embarrassment the CEO  and AOL suffered.