February 07, 2014

What’s the problem?  AOL has to cut back on their benefits.  So?  Welcome to the post-recession era.  Haven’t a lot of companies?  Why is this even news?  Well… It’s because the CEO Tim Armstrong doesn’t seem to have the faintest idea how to successfully communicate that fact.  On an employee call earlier today he said:


Two things that happened in 2012.  We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general.  And those are the things that add up into our benefits cost.  So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.


WHAT?  Hold the show.  HE DID NOT JUST SAY THAT.  Is he blaming his decision to cut the 401(k) plan on other employees’ distressed babies?  I mean seriously?  Could he possibly have shared bad news in a worse way?  Hard to imagine.  When people say they want an explanation for changes, they certainly don’t mean THAT!  As my partner Larry Moscow said to me, “This is perhaps the most irresponsible, anti-parent, unaccountable CEO excuse I have ever seen for not being able to run a successful company!  To publicly point a finger at two employees’ because they had ‘distressed babies’ and therefore the insurance premium increases have led him to cut everyone’s 401k contribution is beyond pathetic.”  I couldn’t agree more, Larry.


What did he tell us in those three sentences?  A lot.  And it’s not good.  He told us that:

  1. He can’t manage.  What is he thinking?  Let’s not forget our cardinal rule here at m+p Tim: “It’s not what you say, it’s what they hear.”  And what his employees—and his investors—hear is that their CEO doesn’t know how to manage his business if he can’t manage to help two of his employees through tough times.
  2. He has no empathy for his employees.  Is he that tone deaf?  Has he watched Undercover Boss?  In this day and age, CEOs need to show more empathy and support of their employees.  If Undercover Bosses can manage to take care of their employees and give bonuses, why can’t he?
  3. AOL is in serious financial trouble.  This is sending a clear signal that AOL must be in financial trouble.  If 2 million dollars throws them off providing an important employee benefit, it’s a clear signal that AOL must be in trouble.
  4. He should have called us before he picked up the phone.  Seriously Tim.  We are here.  Ready, willing, and able to help.  Before your next call, e-mail me at lcarter@maslansky.com

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