Now is the time for the CEOs of the largest companies to hit an otherworldly gear in support of employees worldwide, shareholders and other constituents. What a CEO does today at this critical point in history may very well determine the company’s next 10, 20, 50 years of existence (if it survives through this).
Scores of CEOs are rising to the occasion for workers and consumers hit the hardest by the coronavirus. Other CEOs I have talked with seem shell-shocked by the situation and slow to respond. It’s those companies that worry me (and should worry their shareholders) coming out of the mini economic depression of 2020.
“This is the event that five years from now people are going to be looking back on as setting the culture and tone and heart of an organization, recognizing that the leaders of the organization need to be doing the things that you know everyone is going to be proud of having done five years from now,” retired Home Depot Chairman and CEO Frank Blake said on Yahoo Finance’s The First Trade.
Blake — who sits on the boards of powerhouse companies Delta Air Lines and P&G — says he is telling CEOs that communication is paramount right now. To echo Blake’s message, a failure by a CEO to communicate could lead to a breakdown in trust among key parties and likely over time, market position and profits.
“This is the time to be most focused on communication. Most focused on communication with employees. Most focused on communication with your board and customers. It starts with your employees and having a very effective cadence of telling your employees what you are doing, what is happening, taking care of them. I think,” Blake explains.
Home Depot’s hero
The always humble Blake knows a thing or two about managing through insane situations.
Blake managed through two firestorms as CEO of Home Depot from 2007 to 2014. First, he took over for the free-spending Robert Nardelli as CEO in 2007. Nardelii had pushed hard into new businesses and according to many Home Depot insiders, moved away from the tight-knit employee community fostered by co-founders Bernie Marcus and Arthur Blank.
Blake wasted no time in visiting Home Depot stores, writing handwritten letters to store associates and exiting underperforming businesses. Just as these efforts began to bear fruit, the Great Recession walloped the U.S. economy in 2008 and 2009. Blake stayed the course on his strategy of improving customer service, store operations and online fulfillment. He maintained consistent communication with employees, shareholders and Wall Street on why the initiatives were important.
By the time of Blake’s retirement as CEO in November 2014, Home Depot’s annual and earnings per share more than doubled from 2007. Home Depot’s stock price surged about 145% under Blake’s time as CEO, according to Yahoo Finance Premium data.
Today, Blake is viewed as somewhat of a folk hero among Home Depot employees across the company. He saved the retailer in many respects. As he should be viewed that way — and all it took was clear and concise communication.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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