Former GM CEO Rick Wagoner – 5 Communications Lessons

News Flash –  Richard “Rick” Wagoner resigned as CEO of General Motors yesterday at the behest of President Obama.  Was it the right thing to do? Was it fair? Was he a scapegoat? Why has no one else receiving bailout money been removed?  Why notbankers?

I can’t, and won’t attempt to, answer any of these questions. I write about communications and messaging.

For anyone that still believes that “soft skills” like communications and messaging are not as important as “harder” skills, look no further than Mr. Wagoner and his initial bailout testimony in November of 2008. 

Flashback to November, 2008 — the CEO’s of the Big 3 came to Washington, D.C., hat in hand, requesting a $25 billion dollar bailout package, and prior to testifying, Congressional leadership was planning on giving it to them.  Of course, once the CEO’s testified, everything quickly changed, and not for the better.  Any goodwill the industry had before the testimony quickly disappeared, as did the painless bailout package. Why?

Communications skills.

The lessons from the Big 3 debacle in November, and Mr. Wagoner’s removal 5 months later:

Lesson #1 -  Fly Commercial  – In all seriousness, everything you do sends a message. I apologize for being repetitive, but everything you do sends a message. I am still amazed that as all 3 Chairmen came to Washington, hat in hand, on a private corporate jets.  Let me put this in context for a small business owner — do you think it would be a good idea, if you were nearly bankrupt, to drive over to your neighborhood bank in a Rolls Royce to plead for a loan? It is astounding that not one of the three Chairmen thought that maybe, just maybe, taking a commercial flight might be a better move. Scary.

Fast forward a few hours into the testimony when the CEO’s were asked whether or not they would take reduced compensation, and those requests were subsequently brushed aside. (Two weeks later when the CEOs had to testify again they agreed to the drastically lower salaries — one can only speculate how things might have gone had they prepared for the question prior to the original hearing)

As someone much wiser than me said,” There are three things you can’t take back – words, an opportunity and time.” Very wise. (I don’t know who to attribute this quote to – if anyone does, please let me know).

Lesson #2 – Know your subject  – If you are presenting on a subject, any subject, you MUST be able to answer basic questions. That means at the minimum a practice session with your staff where you are asked questions that are likely to come up.

Senators repeatedly asked the witnesses a very basic question. Where did the $25 billion dollar figure come from? No real answers. This happened time and again with basic questions. The Senate Democrats are on record as being fairly supportive of a bailout concept. It is unbelievable that the executives present could not answer basic questions justifying their request. One day of preparation would have at least allowed answering basic questions. In my opinion, it was at this juncture that the fate of the bailout package, and possibly Mr. Wagoner’s future as GM CEO, was sealed.

Lesson #3 – If you say a lot of different things, you say nothing  – If you are making a request, you must have a central message. There was no central message at this hearing, other than “we need money or people will lose their jobs.” Even that might have been able to be transformed into a message if the very basic question – If we give you the money, to what (exact) degree does this ensure against layoffs?

This question was never answered, and to my knowledge, still hasn’t been.  Congresswoman Carolyn McCarthy certainly “gets it” and said so much when the executives appeared before her committee two weeks later.  When the Big 3 still could not clearly articulate what the bailout meant financially, she said, “You have to learn how to talk to the public.” 

Kudos to Congresswoman McCarthy – Communications 101 for a leader.

Lesson #4 – Tone and Body Language Matter – More than a few reports following that testimony described the tone as arrogant, and I certainly saw signs of discomfort and frustration during the testimony. 

What makes this all the more surprising are the positive reports from internal managers and folks who have worked for Mr. Wagoner, who have described him as a team player, humble and an all around decent man.  Up until the end of his tenure, he was described as easy going and personable – the complete opposite of the public persona he adopted when testifying.

Lesson #5 – Practice. Practice. Practice. – I believe that this could have and would have cured a lot of the issues with the initial testimony.  It was evident that there was not enough preparation going in, as the lack of clear answers. When you are on an international stage, everything you say and do, whether verbal or non verbal, sends a message.

Directly reading testimony, especially when asking for something, is not a good idea. Only two things make it worse — not having written the testimony yourself, and not practicing

Were poor communications skills and botched testimony the only reason that Mr. Wagoner is no longer CEO of GM? Of course not, but the disasterous performance in mid-November certainly played a role. Had he managed to endear himself to the public, or at least been viewed as a sympathetic figure,  odds are the Administration would not have chosen to make an example of him. 

It is often said that 40 is the new 30. In that same vein, I would propose that in 2009 going forward,  “soft skills” are  the new “hard skills.”

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