CEOs’ Direct Talk

A Wall Street Journal article this week, “CEOs Ditch the Warm Talk as Economy Shows Signs That ‘Winter’s Coming,’” provides several examples of leaders’ direct communication. When we analyze bad-news messages in business communication, we consider the organizational strategy and, more important. tone and content choices. The current wave is for CEOs to warn employees about layoffs and prepare them for tough times ahead.

Some CEOs use this direct strategy to manipulate employees to return to offices, but others are demonstrating integrity. A CEO who asks employees to “do more with less” is being transparent. Employees may be motivated by this type of talk—either to work harder and cut costs or to leave the company. If employees leave, the CEO might be OK with that, hoping to reduce headcount or hire new workers who are more productive and have different skills.

Although the article title refers to declining “warm talk,” I would argue that the talk is compassionate—honestly preparing employees so they can make decisions about how and whether they want to continue working for the company.

Images source.

Robinhood Layoff Message

Robinhood attracted retail investors during the pandemic but is facing losses as users leave the platform. In Business Communication and Character, I criticized Robinhood’s aggressive marketing tactics to lure inexperienced investors. Now, the company is doing its second round of layoffs: 9% of staff in April and another 23% in August. Lucky for us, the message to staff is posted on the Robinhood blog—a smart move because notes like are typically leaked, anyway.

Overall, CEO Vlad Tenev’s message meets criteria for bad-news communications. The main point is upfront, as I suggest for layoff messages because employees should know the news already. According to this message, they do: Tenev refers to All-Hands meetings before and after the written message. We get the sense that internal communication has been ongoing and that decisions have been transparent.

The message tells employees what’s next and that they will hear the news quickly: “Everyone will receive an email and a Slack message with your status—with resources and support if you are leaving. We’re sending everyone a message immediately after this meeting so you don’t have to wait for clarity.” The better approach would be individual, in-person (or Zoom) meetings, but this isn’t always practical.

Tenev described part of the reasons for the reductions but omitted a recent $30 million fine and increased regulatory pressure. Yet he demonstrated accountability and humility by admitting bad decisions. He wrote, “As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me.” In addition, on a press call, Tenev admitted, “The reality is that we over-hired, in particular in some of our support functions.”

Tenev also demonstrated compassion. He sounds human, saying goodbye to people who will leave and encouraging people who will stay, without being too positive, which could be off-putting.

In sum, this isn’t the best layoff message example we have, but it’s certainly not the worst. I would share this with students as a positive example.

Recall Notice

Every so often, I post a recall notice—an example of a bad-news message. These warnings often follow a template, and we see how the company handles the communication in both a government announcement and for its customers.

The U.S. Food and Drug Administration (FDA) posted an official announcement from Natierra about high levels of lead in its organic freeze-dried blueberries. As expected, the statement includes which packages are affected, what effects the lead could have, how to get a refund, and what the company is doing to correct the situation. The ending reassures company stakeholders:

First and foremost, we remain focused on the health and welfare of our employees, customers, and partners. We are committed to taking the appropriate steps to ensure our network and services continue to operate seamlessly for our customers.

Contrasting this message with one posted on Natierra’s website, we see some similar language, but the website message is a bit more conversational and customer focused. The ending varies only with an introductory phrase, including “you”:

To continue to be the brand you trust and enjoy, we remain focused on the health and welfare of our employees, customers, and partners. We are committed to taking the appropriate steps to ensure our network and services continue to operate seamlessly for our customers.

Customers can expand headings under “FAQ—VOLUNTARY RECALL QUESTIONS” that provide the same information as in the FDA statement but in a friendlier format.

In both statements, we see the company taking responsibility and acting with integrity: being accountable for the problem and demonstrating transparency in the communication.

Starbucks Message About Store Safety

Responding to employee concerns about crime, drug use, and other challenging incidents in several stores, Starbucks announced 16 store closings. The company promised to redeploy partners in those locations and reassured all workers that safety is a priority.

As usual, Starbucks posted a message on its public blog. The title, “Message to Starbucks partners: Safety in our stores,” starts with empathy, acknowledging that employees’ concerns have been heard. Two senior VPs of operations wrote, “We read every incident report you file—it’s a lot.”

The message provides eight ways the company will ramp up safety protections for store employees. Training, policies, alarm systems, counselors, health benefits, etc. demonstrate accountability and compassion.

Of course, this communication comes on the heels of increased union activity in Starbucks stores. Still, the company does seem to be "doing the right thing” for its employees, and the message is clear, well organized, and audience focused. One example of audience focus is mentioning the possibility of closing stores but not announcing the specific closures, which affect some employees but not all, as this message is intended.

Twitter Is Silent About Outage

Timing for a Twitter outage is unfortunate today, as the company is suing Elon Musk, trying to prevent him from backing out of his $44 billion purchase bid. During the 40 minutes when users worldwide reported access issues, Twitter’s own status page claimed “all systems operational,” according to Verge.

More than an hour after the app was back online, the company was still quiet quiet on the issue. “Twitter did not immediately respond to a request for comment,” according to Reuters, and I see nothing on the blog or the communications or main company Twitter accounts. Even Elon Musk’s account is silent.

Seems as though the company leaders should say something—or maybe I’m missing it?

Image source.

Meta Bad-News Email to Staff

Facebook Chief Product Officer Chris Cox is direct in telling employees that “serious times” are ahead. The press reports contents of a “memo,” which appears to be a formal email or perhaps post on an intranet.

Organized by six “investment priorities,” the memo starts neutrally: “Every six months, we take stock of our product portfolio and investment plans across the company to assess how we are doing and chart the way forward.” But the tone and recommendations clearly represent tough decisions ahead that affect staff.

With no specific plans for layoffs, warnings come at the end of the memo:

I have to underscore that we are in serious times here and the headwinds are fierce. We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets. We must prioritize more ruthlessly, be thoughtful about measuring and understanding what drives impact, invest in developer efficiency and velocity inside the company, and operate leaner, meaner, better exciting teams.

Business communication students will notice lots of jargon, for example, “These are the areas where we see the biggest opportunities for angle-changes in the value we can deliver for people, or businesses, or for our own business, by investing disproportionately relative to our current baseline.” Out with the old; in with the new?

The memo echos a recent meeting CEO Mark Zuckerberg held with staff. Demonstrating vulnerability, he said that Meta is facing the “worst downturns that we’ve seen in recent history” and that hiring will slow. He also gave staff permission to leave:

I think some of you might decide that this place isn’t for you, and that self-selection is OK with me, [and]“Realistically, there are probably a bunch of people at the company who shouldn’t be here.

These warnings are helpful to manage employees’ expectations and to get them on board for the type of belt-tightening company leaders want. Meta might lose people, but this is an attrition strategy that could work in the company’s favor—opening up positions for new people with skills Meta needs going forward.

Airbnb Announces Party Ban

Airbnb’s message banning parties could be considered good news or bad, depending on your perspective. The company’s decision follows a temporary ban during the pandemic, when public gathering spots shut down and parties in rental homes increased. At the time, the rationale was to prevent COVID-19 spread and to reduce the negative impact on neighborhood, a common complaint about Airbnb even before the pandemic.

The decision is easier now—a continuation of the ban rather than a new announcement. As the company wrote in the statement, “It’s been working.” The rationale is clear, and the message is well organized with “Key Takeaways” at the beginning and message titles as headings. Points address concerns of three likely audiences: hosts, neighbors, and guests.

Whether you consider the news good or bad, the statement is an example of a persuasive message. The goal is to stop parties and to win favor of neighbors and municipalities frustrated with noise and other negative effects of short-term rentals, for example, diminished housing inventory and higher home prices. In this regard, the company is demonstrating accountability, although, of course, some would like Airbnb to do more.

BBB's Balanced Executive Change Announcement

On the day that Bed Bath & Beyond posted dismal first-quarter results, the company announced two leadership departures. Like most of these types of news releases, the statement includes quotes from the board chair complimenting the outgoing leaders.

But in this case, the statement starts with a clear acknowledgment of issues and plans to change:

“Bed Bath & Beyond Inc. (NASDAQ: BBBY) today announced significant changes to the Company's senior leadership to focus on reversing recent results, addressing supply chain and inventory, and strengthening its balance sheet. Sue Gove, an Independent Director on the Company's Board of Directors and Chair of the Board's Strategy Committee, has been named Interim Chief Executive Officer, replacing Mark Tritton, who has left his role as President and Chief Executive Officer and as a member of the Board.”

Interim CEO Sue Gove also reinforced the company’s turnaround strategy: "We must deliver improved results. Our shareholders, Associates, customers, and partners all expect more.”

The quote highlighting Tritton’s accomplishments, and those of the merchandising VP, who is also leaving, comes later, under the heading, “Executive Changes.”

Comparing Bed Bath’s statement to similar messages, organization and accountability are probably the most obvious differences. The message sequencing illustrates the company’s primary purpose of reassuring shareholders—prioritizing financial performance over outgoing leader relationships. Although this strategy is sound, the stock fell 20.6% so far today to 5.18, a dramatic fall from its 2013 high of more than 80.

Comms About Disney Leadership Changes

When companies announce leadership changes, they typically include quotes from outgoing executives, but a Disney press release mentions the head of TV only in passing. The focus of the release is on Dana Walden’s promotion to Chairman of Disney General Entertainment Content. The 817-word statement mentions Tim Rice near the end of the first paragraph:

She will have oversight of ABC Entertainment, ABC News, Disney Branded Television, Disney Television Studios, Freeform, FX, Hulu Originals, National Geographic Content, and Onyx Collective. Walden previously served as Chairman, Entertainment, Walt Disney Television and succeeds Peter Rice, who is leaving the Company. Her appointment is effective immediately, and she will report directly to Chapek.

News reports explains that Rice was fired for differences over creative decisions, compensation, etc. The company statement could have acknowledged a bit more and demonstrated integrity and accountability for the decision; otherwise, the press carries the message.

In Walden’s email to employees, she mentions Rice in the 14th of 16 paragraphs:

In reflecting on my own professional journey, I am very fortunate to have worked alongside Peter Rice for a long time. We have been friends for almost three decades and he was my boss for eight years. He is a gifted executive, and I learned a lot from him. I know you all join me in wishing him the best in whatever he chooses to do next.

Of course, this is the right thing to do—and important for employees who may have loyalties to Rice. I respect that she didn’t sugarcoat his departure (and at least Disney isn’t claiming the weasley “mutual agreement” reason for leaving).

As always, leaders communicate by what they say and what they omit. This situation also illustrates a question for business communication students: is this bad news, good news, or a persuasive message? I would argue that it’s all three, depending on your perspective.

PGA Commissioner Sends Letter to Suspend Golfers

After a new golf tour has wooed Professional Golfers’ Association players, the association announced that they are no longer eligible to play in the PGA. The commissioner’s letter is an example of bad news for those who accepted the opportunity from the LIV Golf Invitational Series, a Saudi-backed organization, and it’s an example of persuasive communication for those who might consider doing the same.

In his letter, Commissioner Jay Monahan justifies the decision, using the word “regulations” several times. He mentions that players didn’t get proper releases for the conflict and blames players for making a “choice for their own financial-based reasons.” Monahan also appeals to a wide audience when he writes, “But they can’t demand the same PGA Tour membership benefits, considerations, opportunities and platform as you. That expectation disrespects you, our fans and our partners.”

Monahan uses strong language throughout and calls out specific players at the end of the letter, which players received while they were in the middle of a tournament. He demonstrates courage by facing some backlash, and he demonstrates some vulnerability by acknowledging, “What’s next? Can these players come back?”

The PGA is also holding players accountable, although not everyone agrees. In a statement, LIV Golf calls the decision “vindictive” and promises further action. The brief tweet is a notable counterweight to the PGA’s two-page letter. Students may analyze both in terms of tone, audience focus, content choices, and organization.

A Different Approach to Customer Replies

Squarespace is trying to reduce the volume of customer requests to handle, and I like the approach. I received this email three days after I submitted a ticket on the website.

From: Squarespace Customer Care <customercare@squarespace.com>
Sent: Tuesday, June 7, 2022 9:06 AM
To: Amy Newman <amynewman@cornell.edu>
Subject: [Support] Re: Automatic weekly?

##- Please type your reply above this line -##

Hello, this is Squarespace Customer Support. We're writing to confirm that we received your email a few days ago and are still working to respond as soon as possible.

We're currently experiencing a high volume of requests, so it's taking us longer than usual to respond. We apologize for any inconvenience this causes.

If you've resolved your issue since contacting us, please reply with the word "solved" to let us know and we'll close the case on your behalf. You can reopen a closed case at any time by replying to the thread.

If you want to speak to someone directly about your issue, contact us via live chat. Live chat is available Monday - Friday from 4:00 AM to 8:00 PM ET. To start a chat, visit this link, choose a topic, then select Live Chat:

https://support.squarespace.com/hc/en-us/requests/new#choose-topic

I wonder what percentage of customers resolve their own issue before the company can respond. Either way, this message gives customers some control over their fate and may reduce frustration. It worked for me, partly because the declining customer experience is well known and not unique to Squarespace.

It might not work for customers with a serious issue, but they can follow options in the last paragraph. In this sense, the message is a bad-news reply and, like most, it’s also persuasive. Students can analyze how well the writing style and organization work for the audience and purpose.

Another Elon Musk Email: Layoffs

Elon Musk has a unique way of announcing bad news. In an email to employees, which he sent to the New York Times and other news organizations, Musk is brief and direct.

To: Everybody
Subject: Headcount Reduction
Date: Friday, June 3, 2022

Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas. Note this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.

Elon

Business communication students can compare this message to principles in Chapter 8 for delivering bad news, particularly about jobs. Musk’s email doesn’t quite measure up. A better example is from Brian Chesky, Airbnb. Chesky tailors the message to his audience, letting them know why the decision was made, how it affects them, and what they can expect. He demonstrates vulnerability and compassion to those leaving—and to those staying.

PPT About Lost Luggage

An @AerLingus passenger had been tracking his luggage with Apple’s Airtags but had no luck getting it back from the airline to his home in Dublin. He decided to tweet a PowerPoint presentation to show exactly what happened and where one of his three bags was left—at an address in London. He described the experience, including poor communication from the airline.

The news went viral and was picked up by CNN, but still, the airline didn’t respond. So far, he reports, “I still haven’t had a response or apology from the airline. Am I surprised? No. Am I disappointed? Yes.”

This story reminds me of a PPT way back in 2007, “Yours is a very bad hotel,” when PPT was in its infancy.

@aviosAdventurer did a nice job with the map graphics and location icons. I wish he had included some of the messages to and from the airline. Selfishly, I would like to analyze them against business communication principles, but I also believe they might have strengthened his case against the airline.

Boeing's Scant Statement on Crash

As we wait for details about the plane crash in China, Boeing has issued a statement. The plan was a Boeing 737—not the Max that caused two crashes in 2019 and 2020. Still, the company has suffered greatly, taking longer than expected fixing problems and doing PR damage control in the meantime. This latest situation doesn’t help the company’s reputation.

At the same time, this crash is highly unusual, taking place during descent, during which only 3% of plane crashes occur. In addition, this plane had been operating for six years without issue. Both black boxes were found, so investigators will find more information. But, sadly, knowing the reason for the crash won’t change the fate of 132 victims and their loved ones.

Boeing’s statement is the bare minimum. The company follows its typical communication protocol, saying as little as possible and coming from no one in particular. I understand not taking responsibility at this point, but how about a little more compassion and authenticity? I wonder what lessons company leaders learned in the past two years about communication and character.

Boeing Statement on China Eastern Airlines Flight MU 5735

CHICAGO, March 26, 2022 – Boeing today released the following statement:

“We extend our deepest condolences for the loss of those on board China Eastern Airlines Flight MU 5735. Our thoughts and prayers are with the passengers and crew, their families and all those affected by this accident. Boeing will continue to support our airline customer during this difficult time. In addition, a Boeing technical team is supporting the NTSB and the Civil Aviation Administration of China who will lead the investigation.”

Contact
Boeing Communications
media@boeing.com

Shaming Doesn't Work

A recent study explores companies’ responses when an employee falls for hacking. Turns out, shaming doesn’t work.

When an employee causes a cybersecurity breach, company leaders may want to single out that employee by “blaming and shaming.” The intent is to prevent future breaches, but the results can be devastating, as the author explains:

“Shame is similar to a boomerang that will come back to hurt the organization, as well as harming the employee. Managers should deal with the mistake, but not reject the employee. If employees feel that their personhood is being attacked, they will respond defensively. Shaming results in a lose-lose outcome.”

I can’t think of a situation when blaming and shaming works. In the case of a hack, the employee already feels bad and won’t likely make the same mistake. Instead of causing disloyalty, leaders might try demonstrating compassion.

Image source.

Doodle Explains Outage

Doodle, the meeting scheduler, gives us a good example of a bad-news message. In this short email, CEO Renato Profico apologizes and explains a recent outage. Having Profico craft the message with an apology that doesn’t deflect blame demonstrates accountability.

I would suggest two changes to the message. I would have liked for Profico to acknowledge the impact on users—how it may have affected them. Also, I note a couple of grammatical errors and hope that business communication students can spot them.

Advice for Resignation Emails

A Wall Street Journal article suggests ways to resign from your job gracefully. With a wave of post-pandemic departures, we’re seeing all sorts of resignation messages, some more appropriate than others. The string of emails can be disheartening for people who decide to stay, and leavers should be mindful of burning bridges they may want to walk across in the future.

A law career coach advises that people “Let it rip. Let everything out”—in a document that you don’t send. Then, send an email that respects the workplace and the people you’ll leave behind:

“For the real deal, be gracious and express gratitude. Include up to three career highlights. (Any more and you risk being seen as a braggart.) And skip the passive-aggressive jabs.”

I hadn’t thought about including career highlights, and I wonder whether coworkers would appreciate reading them. Instead, I suggest observing what other resignation emails include and following suit. Every workplace has its own norms around these types of messages.

I do agree with this advice:

“By giving your notice, ‘the power dynamic has been leveled.’ Use that new sense of control and confidence to share more authentically about yourself, not torpedo your relationships on the way out the door.”

The coach is right: you made your decision and are burdening your manager and coworkers who will pick up the slack. Now’s the time to demonstrate humility instead of rubbing it in and causing more hurt feelings.

Peloton's New Ad Campaign

Peloton is trying for a comeback with a new ad campaign. After losing market share, market value, a CEO, a couple of fictional characters, and about 2,800 jobs, the company needs a boost, but the latest campaign feels, to me, defensive and, dare I say, desperate.

Ads quote negative views of the company and counter with positive quotes, presumably from people who have been converted. For persuasive communication, research supports acknowledging opposing sides, even hostile points of view, and then arguing against them. But the counter-quotes in these ads represent one person’s opinion and may not provide enough evidence to outweigh the introductory quote, which seems to represent many.

I also wonder whether Peloton—without providing more evidence—might inadvertently reinforce negative perceptions of the company and products. Introductory quotes refer to Peloton as a fad, a cult, elitist, a scam, an easy workout, and an overpriced coatrack. These are all good reasons for me to never buy a Peloton.

The ads seem to disregard real challenges. The quotes represent good feedback for company leaders who, in response, defend rather than try to change the brand.

Zillow's Letter to Shareholders

Zillow ended its failed iBuying business, but is recovering well, as the latest letter to shareholders explains. A foray into the home-flipping business didn’t pan out for the company, resulting in losses and layoffs.

The company’s letter demonstrates accountability, humility, and vulnerability, yet express optimism, as the CEO and CFO write in the closing:

“We want to acknowledge the past few months have been challenging for us all — Zillow leadership, employees, and investors — but innovation is a bumpy road. Big swings are core to Zillow, and they are what make our company so unique. We are excited about the opportunity in front of us. Thank you for joining us on this journey.”

In addition to describing plans, the leaders want readers to take away that performance was “better than expected.” “Better” is used 13 times in the 20-page letter. The approach seemed to work. As a CNBC article summarizes, “Zillow soars on upbeat outlook and faster-than-expected selloff of homes in portfolio.” However, for perspective, the article reports that the stock increased 20% after the letter was published, yet “the stock has lost three-quarters of its value since reaching a record almost a year ago.” Zillow’s leaders have more work to do.

Announcements About Leader Departures

Company announcements about leader departures typically follow a standard format, but content and medium choices communicate history and context. Two recent examples illustrate these types of messages:

• Meta, Facebook’s parent, announced that Peter Thiel, a long-time investor, will step down from the board. The company chose a press release for the news, also posted on the Meta website. As expected, the press release includes positive quotes from CEO Mark Zuckerberg and from Thiel. What’s not said is found in a Wall Street Journal article: Thiel is a supporter of former President Trump and two Senate candidates who have spread false claims about election fraud. Thiel has also resisted changes to Facebook to quell misinformation on the platform.

• Peloton announced that John Foley, the company founder, will step down. Like Meta, the company chose a press release and posted it on the Peloton website. Although the statement names Foley as executive chair and includes a quote from him, we don’t see the typical complimentary quote about his leadership. A New York Times article titled, “Peloton’s Future Is Uncertain After a Swift Fall from Pandemic Stardom,” cites several problems at the company: “The chief executive stepped down as a glut of unsold machines, negative TV portrayals, activist investors, and a recall plagued the fitness company.” A personal message, below, from Foley to Peloton customers explains more of his perspective.

These messages are a type of bad news—and they are examples of persuasive communication. Foley’s email tries to convince “members” that the company will continue to thrive and that Barry McCarthy, as the new CEO and president, is the answer. Foley uses logical arguments, such as the number of current users, and credibility, such as McCarthy’s past success, to persuade. He also uses emotional appeals, complimenting customers and their stories. He reassures customers by describing what won’t change—a persuasive strategy Adam Grant talks about in his book Think Again.

Whether Foley remains with the company—and what the future of the company holds—is questionable. In his email, he demonstrates some humility by introducing McCarthy but little accountability for what has happened to a company that was only recently a major success story.

Fellow Members,

There’s been quite a bit of news about Peloton in recent weeks, and through it all, you have stood with us. Thank you for all your support and encouragement! This year marks Peloton’s 10 year anniversary. My co-founders and I brought to life the concept of recreating the energy and benefits of a studio fitness class in the home to make getting healthy and staying healthy more achievable for more people. And together with you, we have built this incredible community from five people to 6.6 Million people, of all stages, ages, and backgrounds, leading healthier, happier lives. I remain inspired by you and your stories. Our north star has always been and will always be improving the lives of our Members. Your experience is what matters most and this is why we are making some changes to position Peloton for continued success the next 10 years and beyond.

Effective today, I will be moving into a new role as Executive Chair, and Barry McCarthy will be joining Peloton as CEO & President to lead the company. Barry is an incredible leader with a proven track record of working with founders to scale world-class businesses like Spotify and Netflix. In addition to the senior executive roles he has held at some of the world’s most successful media and entertainment brands, Barry has served as an advisor and board member at public and private technology companies. This appointment is the culmination of a months-long succession plan that I’ve been working on with our Board of Directors, and we are thrilled to have found in Barry the perfect leader for the next chapter of Peloton.

I care deeply about Peloton – our community, our team, and our ability to continue to motivate and inspire you through our world-class instructors and deep library of classes across fitness disciplines. And, because operating with a Members-first approach is one of our core values, I want to assure you that the changes that we’re making at the company across our operations will not impact our instructor roster, number of classes produced, or range of class modalities.

I still believe as strongly in this brand and in connected fitness as I did on Day One. But in order for us to continue to deliver the best possible member experience and lead us into the future, I need to hand the day-to-day reins of running the business to a seasoned and gifted executive who has helped transform and grow some of the world’s best streaming media companies – first in video, then in music, now in connected fitness.

I’m so excited to partner with Barry and for you to see what he brings to this brand and community. Please join me in welcoming him to the Peloton team. And I hope to see you on the leaderboard soon!

John Foley