You’re the chief executive of a major company.
You’ve turned its fortunes round to the point where it’s doubled in size and is paying its shareholders £2.2 billion. And you £110 million*.
So why, when you’re being interviewed for what should be a positive story about a new factory your company is opening, do you dodge a question about your bonus? And in doing so, show a clumsy submission to your PR minder?
Why, even though you’re paid to lead your company, do you not take the lead and answer a fair question with honesty and integrity?
Of course, I’m talking about the recent fiasco surrounding national housebuilding company Persimmon, poorly handled by both its soon to be ex-CEO, Jeff Fairburn, and its PR company, Citigate Dewe Rogerson.
According to its website, Citigate Dewe Rogerson is one of the most respected names in communication and an expert in its field. So, why, I want to know, did its team fail to anticipate the obvious question about Jeff Fairburn’s eyewatering bonus and plan a meaningful and honest response?
And I ask the same of Fairburn. Why did he, as CEO and therefore leader of his company, not anticipate the question? Where was the leadership in that?
Furthermore, why did Citigate Dewe Rogerson feel the question was not deserving of an honest response. And why did Fairburn also feel he was justified in dodging the question?
Perhaps he feels positive communication designed to generate lasting success with integrity and humanity is not part of what he was paid so handsomely for?
Which of course begs another question; in that case what was he paid for? Take the money and run eh?
Who failed who?
My writing this article is obviously triggered by the recent news that Jeff Fairburn is leaving Persimmon after the housebuilding behemoth found the furore over his bonus ‘too distracting.’ However, the wider issues here are shared by CEO’s worldwide.
I want to look at what’s really at the heart of this. Bonuses that are impossible to defend, of course. But also, and in my view more importantly, a failure of leadership. And a failure to communicate in a way that connects business to people. The people it employs, sells to, is owned by and supported by.
When he was interviewed by Spencer Stokes for BBC Look North, Jeff Fairburn not only failed to answer an honest question about his bonus. He also failed to step forward with courage as a leader and take control of the situation. Even one of Persimmon’s major shareholders admitted to the Evening Standard that the interview ‘was poor.’
Watching the interview online, I felt Fairburn initially wanted to answer Stokes’s question. He started to reply, albeit with a rather cautious, ‘I, er, I think…’. But as soon as his PR minder interrupted with, ‘Can we not?’ he clammed up. Then, while Stokes explained the relevance and public interest behind his question, Fairburn hovered. As before, he looked like he wanted to respond. But again, he was shackled by the PR handler.
Only as he turns to leave does he, in a watered-down nod to Trump, blame the reporter for spoiling the interview by asking about his bonus. Yet this was a fair question and one we would all have liked him to answer. Is Fairburn so removed emotionally that he doesn’t recognise this? I think so. Throughout the exchange he looked stiff and uncomfortable.
This whole sorry episode is a classic example of an outmoded concept of leadership, one that’s particularly prevalent across the C-suites of large PLCs.
In its most recent Trust Barometer, its eighteenth annual international trust and credibility survey, Edelman reports that nearly 7 in 10 respondents said building trust is the number one job for CEOs. And it goes on to say that institutions must be willing to collaborate with each other to restore trust.
It’s fair to say two such institutions are major PLCs and the media. Yet neither Fairburn or his PR company showed any willingness to understand the role of the media and work with them.
If this is PR, what is its value?
As Edelman says at the start of its report, ‘We find the world in a new phase in the loss of trust.’ So much so that Richard Edelman, president of the company, felt compelled at the end of his introduction to challenge institutions to ‘join the battle for truth so that facts triumph over fears.’
It seems to me that PR these days is fast becoming nothing more than a process designed to minimize reputational risk at the expense of the integrity and morality of the situation.
Fairburn was asked to leave Persimmon because of the ‘continuing distraction around his pay’. Distraction that Persimmon could have avoided with meaningful and decisive action.
From what I can see, from the outset Persimmon and Citigate Dewe Rogerson both failed to plan an effective communication strategy. They failed to acknowledge and respond to how people feel about Fairburn’s egregious bonus. And they failed to create any positive public relations.
On their website Citigate Dewe Rogerson say they ‘combine innovative advice and thinking with the journalistic reflexes and experience to maximize the opportunities and minimize the risks.’ One feels these are just empty words. They also say they add value but do not specify to what or who. I’ll leave you to draw your own conclusion on this.
PR is an initialism for Public Relations. Its aim is to foster positive relations with the public. With people. Humans. Yet it seems to me humanity is sorely lacking in PR these days. Instead it’s contracted to become a model by which to reduce reputational risk rather than an ongoing process based on open communication. Communication that engenders trust because it has courage and integrity at its heart.
These days PR is overshadowing communication in a business hierarchy that’s driven by a misguided focus on process and technology at the expense of people. As a result, the humanity has been stripped out of communication. When it’s overshadowed in this way communication is no longer fit for purpose.
Effective, meaningful, honest communication should be a skillset in its own right. Not one that’s delegated to a comms department, marketing team or HR, but one that’s shaped and led by the people at the very top. And that runs throughout the whole organisation.
Emotional leadership is not an oxymoron. It’s a necessity.
Persimmon allowed their PR company to reduce their communication to a process rather than something that had an emotional connection. Ironically, they allowed it to become transactional rather than relational. Their communication had no heart. What does this say to the people who work in their brand-new brick factory? To all their employees, shareholders and customers? And to us, the tax payers who are propping them up?
As Jim Armitage wrote in the Evening Standard last week, success in PLCs, rather than being down to an individual, is ‘mostly the result of large teams of good people, longstanding relationships with suppliers and customers and a fair wind from the economy.’ In Persimmon’s case, the taxpayer funded Help to Buy scheme and low interest rates.
Boards need to know that chief executives are not, again in the words of Armitage, ‘the value creating gods they often claim to be.’
CEOs need to know this too. And show they know it so those teams of good people and relationships with suppliers and customers can be nurtured and maintained.
Leadership is an emotive role. If you’re going to do it well, you can’t just stand behind your PR people and disconnect from everything that’s going on around you. It takes more than second-hand soundbites and a sharp suit to lead.
Effective leadership depends on an ability to connect with people. To empathise. To inspire and enthuse. To understand your own emotions and those of others.
It takes hard work to lead in this way.
But, as the Persimmon story so clearly shows, work that in the long term will benefit everyone. Not just the few.
As we look to shape our future in a post-Brexit world, we must do better. Centuries ago Confucius said, ‘A state cannot survive without the confidence of its people.’ Isn’t it time we worked to win that confidence back?
* Jeff Fairburn was originally entitled to £110 million in shares under Persimmon’s 2012 Long Term Incentive Plan (LTIP). However, in response to the way this news was received by shareholders and the wider public, he agreed to put some into a charitable trust. His final payment is £75.7 million, due to be completed by 2021, and unaffected by his recent agreement to leave the company. In addition, Persimmon is paying up to £12,000 towards the ‘reasonable legal fees’ Fairburn will incur as a result of his leaving.