Workplace Issues

Why CFOs and Other Leaders Shouldn’t Pass the Blame

Myron Ullman is back as CEO of J.C. Penney, and he’s saying the company’s ills are his predecessor’s fault. That’s a bad strategy.
Marielle SegarraSeptember 6, 2013

Finger pointing makes sense, on some level. Your present situation is someone else’s fault, so you blame him or her (and loudly, so everyone can hear).

Myron Ullman, CEO of J.C. Penney, is familiar with this strategy. Ullman, who was chief executive at the retailer before recently-ousted CEO Ron Johnson, returned to J.C. Penney in April. During an August earnings call, he laid the blame on thick for the company’s disappointing second-quarter results, referring to “errors of the past” and “mistakes of the past,” and repeatedly referencing “previous management.” He went on to say that “thousands of customers have told [management] they are excited the J.C. Penney they love and appreciate is back.” J.C. Penney’s earnings report also blamed the company’s poor same-store sales performance on its “failed prior merchandising and promotional strategies.”

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Finger pointing works, with limited success, during election season and on the playground. But for a CFO or corporate executive, it’s a losing strategy, experts say.

To start, it can make workers, investors and customers think a leader has no new ideas.“Blaming others is not only an announcement of past failures but also a self-inflicted wound,” says Richard Levick, CEO of public relations firm Levick. “‘When a CEO or any alleged leader spends more than a few moments blaming others, they’re saying, ‘I don’t have the ability, the leadership or the vision to take us where we need to go.’”

“The honeymoon period is really, really short, especially in the digital age,” Levick says. Executives “need to draw a line in the sand that says ‘that was then and this is now.’ From that point forward, [shareholders and investors] no longer blame you for the past, but they want to know ‘what are you going to do taking us forward,’” he says.

Finger pointing may also backfire because a former CEO or CFO probably still has supporters at the company, and blaming that person will alienate them, says Paul Argenti, professor of corporate communications at the Tuck School of Business at Dartmouth University. Argenti says there are times that an executive should speak negatively (like when a competitor is falsely attacking the company) but this isn’t one of them. “Everything we know about communication tells us that you should focus on the positive, not on the negative,” Argenti says. “You’re better off focusing on what you’re doing well and trying to talk as much as you possibly can about the positive things [your predecessor] did.”

One reason C-suite executives may make the mistake of playing the blame game: if they look to politicians for communication tips, Levick says. When former president Ronald Reagan was elected, he blamed the Carter administration for the country’s ills, for instance. President Obama did the same with former president George W. Bush. Even for politicians, that strategy only works for a short time, Levick points out. (Reagan’s and Obama’s political parties both lost ground in disastrous midterm elections.)

But passing blame as a corporate executive is also fundamentally different than finger pointing when running for office or when taking over as head of a government, Levick says. “The reason why blame worked for Ronald Reagan or President Obama is because they had  an antihero built in: Republicans have Democrats and Democrats have Republicans,” Levick says. But if a CEO or CFO attacks a predecessor, they are actually attacking the company (and making management seem inept), he says.

A better strategy: talk about your vision for the company. “Nobody cares about the past except historians and those actors from the TV show The Time Tunnel,” Levick says. “Your shareholders want to know ‘what are you going to do next’?”

Photo courtesy of Flickr user Marcalz. CC BY-SA