Wells Fargo’s CEO Just Showed Us How to Handle an Elizabeth Warren Attack
Call it a double feature. While most Congressional hearings on business matters attract little attention, Tuesday’s proceedings on Capitol Hill included high-profile interrogations of the bosses of two of the corporate world’s current biggest villains: newly retired Equifax CEO Richard Smith and Wells Fargo CEO Timothy Sloan.
Putting corporate bosses in the hot seat often makes for good drama, but ultimately has little actual impact. The lawmakers seethe away for video clips that go viral, and the chastened bosses endure the best they can.
The wisest CEOs understand that you don’t win a Congressional hearing; you survive. And if you want to survive, there are three things you must do:
Both Equifax (EFX) and Wells Fargo (WFC) released their opening statements the day before, ensuring a wave of media coverage of their key points. They did so knowing that their points would get completely lost in the next day’s coverage of the hearings, overwhelmed by the newsier zingers the lawmakers would undoubtedly deliver.
For instance, Rep. Greg Walden (R-Ore.) told Smith, “I don’t think we can pass a law that fixes stupid.” Hard to compete with that.
Follow the formula
Both executives used their opening testimony to follow a time-tested formula that goes something like this: Say you’re sorry and accept responsibility. Explain what happened. Explain how you’re fixing the problem. Call for broader measures across the industry. Say you’re sorry again.
Both statements followed the formula so closely that some sections sounded like they were generated by the same contrition-generation app.
Smith: “Let me say clearly: As CEO I was ultimately responsible for what happened on my watch. Equifax was entrusted with Americans’ private data and we let them down. To each and every person affected by this breach, I am deeply sorry that this occurred.”
Sloan: “So let me be very clear about this: I am deeply sorry for letting down our customers and team members. I apologize for the damage done to all the people who work and bank at this important American institution.
Using the opening statement formula will not spare you the grilling, but it’s the only place where you can lay out a coherent case, serving as the basic narrative for all of your other communications.
Get your head right
Most CEOs are used to being fawned over. So, suddenly being treated like a piñata can be truly jarring, provoking either pique or disorientation. For instance, Sloan’s predecessor John Stumpf seemed so rattled by the committee’s severity that he struggled to answer even the simplest of questions without tentatively parroting bland talking points.
But Sloan displayed the appropriate mixture of seriousness and respectfulness required to minimize the drama and pain of the public flogging.
His ego was surely put to the test when grilling expert Sen. Elizabeth Warren (D-Mass.) told him that he should be fired, telling the banker, “At best you were incompetent, at worst you were complicit.”
Sloan, who undoubtedly had never heard words quite like that during his three-decade climb up the Wells Fargo ladder, stood up for himself and made his case for continued employment. But, importantly, he never lost his humble tone as he rattled off a series of corrective actions he has taken since his predecessor’s resignation a year ago: “I have made mistakes, I certainly haven’t been perfect, but I think having that knowledge of the company, having the ability to make the change, the actions that I’ve taken since I’ve become CEO 11 months ago, have made fundamental change at this company.”
His counter-argument likely persuaded nobody. But at least he didn’t provide a snotty retort or meltdown moment that would have dominated the coverage. After all, the goal is not to win a Congressional hearing, but instead simply survive.
Paul Pendergrass is a communications advisor who writes about business and communication.