Owners Should Know What’s Going On, Shouldn’t They?

The September issue of the Fearey Group’s newsletter was titled PR Failure #26: The Ellen-ments of a Talk TV PR Nightmare. FYI, the Fearey Group is Seattle’s premier PR firm and you can see more at https://feareygroup.com/. I appreciate their allowing me to use an excerpt and write about it.

I’m going to tie their newsletter’s topic to small business ownership and buy-sell deals. First, here are what I consider the top two paragraphs for their newsletter.

Sitting atop the pedestal and feigning a lack of responsibility.
It’s hard to hear “Ellen” and not imagine the smiling, bright-eyed, gregarious TV host. This is by design. Everything surrounding The Ellen Show is made for you to equate the face of the brand with those qualities. The show has a merch store on its website and an offshoot video hub, known as “Ellentube.” The logo for the TV show is simply the word “ellen.” Her production company’s name? A Very Good Production. You get the picture. Like many people who make it big, as her celebrity and business grew, Ellen distanced herself from the employees who make her brand and empire function. In her July 30 letter, she stated, “As we’ve grown exponentially, I’ve not been able to stay on top of everything and relied on others to do their jobs as they knew I’d want them done. Clearly some didn’t.”
  
While this may be true, the head of any operation must stay informed about how business is done. Leadership, from the face of a brand to corporate and organizational executives and CEOs, must recognize their culpability in issues that arise and act swiftly and tangibly to rectify missteps. Hopefully, that’s before the issues go public and become a total PR failure. The words of one of the brave employees who came forward have never rung more true as an example for us all: “If [Ellen] wants to have her own show and have her name on the show title, she needs to be more involved to see what’s going on.”

I think the most important line in the above excerpts is, “While this may be true, the head of any operation must stay informed about how business is done.” Here are three ways not paying attention can manifest itself.

Follow the leader – Businesses rely on their reputation. From what the boss does to what the lowest level employees do. When the employees see the owner/boss cutting corners, not carrying about details, or going through the motions, they will also. They will emulate the pride the owner takes in his business. And it will show with quality, customer relations, and the culture. The employees will push the limits, like on Ellen. In my books I tell the story of visiting a company and seeing the employees eating lunch in their cars. Walking in my first impression was, “they don’t care.” It was a dirty mess, and the lunchroom was worse. No wonder people ate outside. Impressions like this do not increase the value of any business.

Can’t see the forest for the trees – This is the opposite of the previous point. This is when the owner is overly involved, won’t delegate, and micro-manage everybody and everything. It’s known as an owner dependency and it means there’s a lot of personal (owner) goodwill versus company goodwill. Recently we were calling one of our client’s customers to get a feel for how they thought of the company. One area of concern was the customers related more to the owner than to the company. This proved to be false, which is great.

I know nothing – Did you know, at least as of a year ago, the most popular TV show in its time period was Hogan’s Heroes (this from a friend who sells TV advertising)? The “I know nothing” line is from that show and it sure is apropos to the Fearey Group’s example, isn’t it? It also comes into play in buy-sell deals when the seller is asked to represent and warranty that everything they told the buyer is true and correct. All of a sudden the owner who brags at her club about how important she is to the business and says it would fail if she wasn’t around now wants to qualify it (at the urging of her attorney in most cases) by saying “to the best of my knowledge” all I’ve shared is true and correct. Let’s face it, there are a lot more owners described in the second example than the first and they can’t claim they don’t know what’s going on. My experience tells me 90% or more of owners know even the most minute details about what’s going on from customer status, to operations, to margins, to the employees. 

Conclusion

The above is why companies should have a board of directors or at least an advisory board. This can keep the owner/CEO from straying or from ignoring things. Healthy tension should be the relationship between board and owner/CEO. Not like what’s been reported about the Boeing board. Boeing was just hit with a lawsuit saying the board of directors was lax on their oversight of the 737 Max issue. Management knew what was going on (supposedly) but weren’t held accountable. This has elements of all three examples above.

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