CEOs and Crises: Communications strategies of effective leaders

Akio Toyoda knew at an early age that he might rise to a position of power; his grandfather founded what is now Toyota Motor Corp. But in 2009, when he became president of Toyota, he inherited a company in serious trouble.

Akio Toyoda knew at an early age that he might rise to a position of power; his grandfather founded what is now Toyota Motor Corp. But in 2009, when he became president of Toyota, he inherited a company in serious trouble.

It had just reported an annual loss of $4.4 billion in the global recession. And in the United States, it had a baffling and potentially crippling new problem: there were reports that some of its cars were speeding out of control on the road. Was it because gas pedals were getting caught under floor mats, as the company said? Or had something more fundamental gone wrong with Toyota’s safety culture? The company was accused of being slow to respond, of having grown complacent about its famed attention to continuous improvement.

Reporters said Akio Toyoda had been all but invisible in his first months in charge. Now, he was being called before the United States Congress. He made the issue personal.

“My name is on every car,” he said in his testimony. “You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers.”

The crisis was far from over, and no one apology can solve a problem of such proportions. But by instituting a six-point safety plan, and by sticking to it, he helped Toyota gradually regain its position as the world’s largest automaker.

There is no such thing as a typical CEO or a formulaic way of getting their companies through trouble. But in difficult times, effective leaders do have certain qualities in common.

  • They project consistency, making it clear that there is a firm hand at the tiller.
  • They offer vision, setting and articulating the direction in which they will take their companies.
  • They are accountable: when something goes wrong, they make no excuses. It falls to the CEO to make things right. Thousands of people – customers, employees, stockholders, competitors and others – may be affected by what the head of a company does.

Finally, many good leaders show remarkable agility in turning a crisis into an opportunity. When they promise to fix things, they follow through. It can take several years for a company to recover financially from a major setback, but strong leaders use such rebuilding processes to make their operations stronger and more resilient.

Take the example of Colin Matthews, the CEO from 2008 to 2014 of BAA Ltd., the company that ran London’s Heathrow Airport. Heathrow is the third-busiest airline hub in the world, after Atlanta and Beijing, and when Matthews came in, it was struggling to keep up with traffic. After a surprise snowstorm just before Christmas 2010, there was almost no traffic at all – the airport’s systems essentially collapsed.

“We have thousands and thousands of passengers today and over the weekend whose travel plans are disrupted, and many of whose Christmas plans are spoiled, and we’re truly sorry about it,” said Matthews in an interview with The Telegraph.

In and of itself, his apology may sound unremarkable, but it became part of a major turnaround. BAA sold smaller airports to concentrate on its main business, and put a new premium on customer service. At times Heathrow’s approval rating among travelers had been as low as 25 percent; by the time Matthews left the renamed Heathrow Airport Holdings, satisfaction levels had risen to 75 percent.

For the most part, the old stereotype of the big, bombastic boss is out of date in the digital age. Take the example of Susan Whiting, the former CEO of the international ratings giant Nielsen, N.V. Early in her career a mentor urged her to speak up for herself more often. She clearly learned – and when Nielsen was accused of undercounting minority viewers, she created a $2.5 million fund, managed by clients, to promote innovation in rating audiences in a multimedia world. She made a point of including more minorities and young people in Nielsen’s samples. In other words, she quietly took command of the issue without giving in.

Edward Breen could be similarly low-key as he made tough choices to break up Tyco International and revamp its management. “This is going to be a different company, and we are going to run it differently,” he said. A reporter said he came across “like a friendly dad in a 1950s TV series.”

Perhaps the unifying factor in this very disparate sample is that when faced with crises, strong leaders do not act as if they are in the middle of one. They will often use the moment as an opportunity to bring about change, taking ownership of the issues that threatened their companies.

A final example is the American Richard Parsons, who has been called upon at different times in his career to steer Time Warner, Citigroup and the Los Angeles Clippers through choppy seas. People have remarked how calm and considered he is, without ever being a pushover. “He is a persuader, not a dictator,” said a colleague. Even Carl Icahn, the activist investor who did battle with him, called him “a very disarming guy.” And Bob Pittman, his longtime friend, said, “There’s not a better guy you want with you, especially when times are tough. He has the patience of Job.”