Brandt on Leadership -- The Art of the Excuse

June 9, 2008
Because blame avoidance never goes out of style

Look, it's a tough economy out there, a lot of you are new to your jobs and you're about to face the most harrowing moment of a young executive's career: Reporting bad (probably awful, possibly record-breakingly horrendous) financial results to your bosses, your board and your investors. Not to increase the pressure or anything, but how well or badly you do this will determine your entire future and whether your kids have enough to eat, etc., etc.

But it's not my fault, you say. Well, maybe. Or not. In a philosophical sense, you'll never really know: It could be $130 a barrel oil that sunk your entire market, or it could be that you're a blithering idiot who can barely manage his way through a morning constitutional. Think about it: If you were a blithering idiot, is there any chance you'd be self-aware enough to recognize your own blitheracy?

Fortunately, in the executive suite your standing as an idiot is completely irrelevant as long as you have style -- not with regard to the runways of Paris and New York, but with corporate excuses du jour. Just as hemlines rise and fall with the seasons, non-mea culpas become either more or less fashionable depending on just which CEOs are using them and how. Current favorites include:

The Subprime Crisis: Already this year's all-purpose, all-industry Unforeseen Externality (UE) excuse, comparable to 2005-2006's post-Katrina surge in the use of the phrase "weather-related" to explain all sorts of poor performances in completely unaffected businesses thousands of miles from the Gulf of Mexico. Pros: Although most useful in firms at least tenuously connected to the housing or financial industries, it has strong appeal for any business that has borrowed money or has customers who have borrowed money, i.e., all of them. (Credit's tight, you'll whisper to senior management. Nobody's buying anything.) Cons: One-time excuse. Also, smarter competitors (i.e., those who didn't spend every nickel during the good times) will likely seize market share you'll never get back, thereby ruining the "industry-wide downturn" theory. Strategy: If it's good enough for Merrill Lynch and Home Depot, it's good enough for you. Plus, you can always hire away those smarter managers from your over-achieving competitors.

High Energy Prices: A close second to subprime as a UE explanation for almost anything. (No, really, your fifth-grader will whisper to his teacher, the dog ate my homework because oil prices were so high we couldn't afford to both feed him and gas up Dad's SUV.) Pros: Can be spun to explain virtually any blip in the numbers, with the added benefit that oil ain't getting cheaper anytime soon. If your board buys it now, they'll have to buy it later, too. Cons: Savvy directors may ask pesky questions about why, if the business is so energy price-sensitive, you didn't manage your risks with hedge or swap contracts? Or how your European competitors have managed the same issues for years? Strategy: Woulda, coulda, shoulda. If these directors were such geniuses, they'd have asked these questions two years ago, right?

Green: Riskier but potentially more beneficial, as you use the language of natural disaster to explain that your current woes are the result of a "tectonic" shift in consumer preferences for green products, requiring a "seismic" restructuring of your business. Pros: Very fashionable. Plus, you look like a responsible manager investing for the future, instead of a numbskull who missed his numbers because he hadn't read a business magazine in the last decade. Cons: You'll probably have to actually introduce a greener product at some point, which costs money and, even worse, requires real innovation. Strategy: Buy a barrel of green ink and print the word "RECYCLABLE" in obnoxiously big type on your packaging. It's not really sustainable, of course, but neither is the fiction that none of this was your fault in the first place.

Blither, blither...

John R. Brandt, formerly editor-in-chief of IndustryWeek, is CEO of the Manufacturing Performance Institute, a research and consulting firm based in Shaker Heights, Ohio.

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