Executive Excuses for Financial Flops

Yesterday’s Wall Street Journal included an article by Richard Teitelbaum on how “Excuses Abound in Tough Times.” It recounts how corporate CEOs blame “outside factors” for poor quarterly results when on calls with the financial analysts.  Yesterday’s Wall Street Journal included an article by Richard Teitelbaum on how “Excuses Abound in Tough Times.” It recounts how corporate CEOs blame “outside factors” for poor quarterly results when they’re on investor relations calls with the financial analysts.

Anyone who has ever been involved in one of these calls is familiar with the scrambling that takes place to find a something or someone to blame for the fact that the company did not do well—or at least as well as the analysts anticipated. Executive excuses are creative: rabbits get pulled out of hats, red herrings are waved, scapegoats are staked out, and bear markets are held up.

No Executive Excuses for Employees

These executive excuses are the sole province of CEOs and VPs of Investor Relations, however. Employees whose projects have not performed as predicted or expected for reasons outside their control can’t even think about using an excuse. It’s amusing, though, to imagine how it would work if ordinary employees could deploy some of the rationalizations executives toss out when things go wrong. Here are a few examples from the @WSJ article. You could just explain to your boss that:

  • The company’s main product didn’t get in the upper right box on Gartner’s Magic Quadrant for the industry because of “macroeconomic headwinds.”
  • The product you just launched didn’t win a Best of Show award at Interop (or whatever the company’s major trade show is) because the judging took place on a Sunday.
  • The new online advertising campaign didn’t bring in as many qualified leads as expected because of “extremely harsh winter conditions.”
  • The Christmas marketing initiative flopped because Christmas “fell on a Saturday.”
  • No one showed up at your important seminar because of “high oil prices.”

Five Reasons for No Employee Excuses 

No executive excuses: Regular worker bees don’t get to use these or any justifications for five reasons:Regular worker bees don’t get to use these or any justifications for five simple reasons:

  1. We’re held to a higher standard. CEOs can get away with it because the analysts don’t call them on their sorry excuses and “legal repercussions are rare.” How nice for them. There are repercussions for workers, however, and they can be severe.
  2. We’re expected to know and account for all the factors. Christmas falls on a Saturday? Great. What was your plan for getting around that obstacle? And where was your backup plan?
  3. We can’t get away with it. It’s impossible to just hang up the phone, heave a sigh of relief and go back to our jobs. The boss is right there in our face demanding an answer. And he wants one that’s suitable for the CEO and the Board Meeting. No excuses allowed.
  4. It doesn’t work. Anything that smacks of explanation, justification or rationalization, much less excuse, is cause for VP-level disbelief, anger, and remonstrance. You’re supposed to know that the judging would take place on a Sunday and plan accordingly. How? Who knows?
  5. We have a track record. The financial analysts might not review previous call transcripts to see that you blamed poor results on the fact a holiday fell on a Friday, then a Saturday, then a Sunday—but your boss sure will. That is, or course, if you’re given the opportunity to disappoint the executives three years in a row. I wouldn’t count on it.

It doesn’t matter if the executive expectations are unrealistic, over the top, unfunded, or fly in the face of reality. When you’re given the order to make sure the new product wins “Product of the Year” at the next trade show you have to come up with something. So you try everything you can think of shy of bribing the judges. Not that your boss would mind a pay-off, but you know it would have the same effect as when Max Bialystock and Leo Bloom bribed the New York Times theater critic in The Producers.

Prepare for the Worst

A terrorist attack shut down the New York City subways and the streets were gridlocked with cars and taxis.Somehow we lowly employees are expected to prepare for the wors t–even when it’s totally unpredictable. We should, for instance, be expected to anticipate and have a backup plan for an audience not showing up at a seminar because:

  • There was a 10-car pileup on LA’s 405 freeway and traffic was gridlocked all morning.
  • Black Friday hit the market and everyone in Chicago panicked and stayed at their desks.
  • A terrorist threat shut down the New York City subways and the streets were gridlocked with cars and taxis.

These are all true stories. But were they excuses or explanations? The answer is in the mind of the beholder. If it happened to a CEO, they’re good answers that explain under-performance. Worker bees are not so lucky, though. It may be natural, as Mr. Teitelbaum says, for “management to paint itself in the best possible light.” The rest of us—not so much.

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