The Anachronism of the Compassionless Executive

There has been a lot of discussion lately about the CEO of Abercrombie & Fitch, Mike Jeffries.  For those unfamiliar, he is under fire recently for the company's refusal to stock larger sizes of clothing, the idea being that he does not want the brand diluted by overweight people in the clothes.  This led to some old quotes of his going viral, including this gem: "Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely."

Now, what's wrong with this?  Abercrombie & Fitch is well-known as designing clothing that is expensive and seen as a status symbol among kids; not just of wealth, but of popularity.  It is undoubtedly marketed this way intentionally, and almost everyone already knew that.  What Jeffries is doing here is stating the truth about his strategy, however indelicate his phrasing and self-serving his motives for pursuing it.

But this raises a larger issue.  Mike Jeffries is not the only executive today that seems to have very little compassion for customers or people in general.  This is certainly not a new phenomenon; in fact, executives being primarily profit-driven capitalists with little concern for the common man was such a prevalent phenomenon in the 80s that it was almost seen as heroic.  This mentality was caricatured as Gordon Gekko in Wall Street (1987).  The ultimate opportunist, Gordon was all business; a profit-seeking machine that viewed life as a zero-sum game and was perfectly comfortable with that.

What other executives have run companies that appear to show a flagrant disregard for compassion?

• In 2010, BP was responsible for the Deepwater Horizon oil spill, which claimed 11 lives and resulted in oil flowing into the ocean for 87 days.  During proceedings on the matter, Tony Hayward (BP CEO) described the environmental impact as "very, very modest" and said "There's no one who wants this over more than I do. I would like my life back."
• About a year ago, Spirit Airlines refused a refund on a flight for a military veteran who was terminally ill.  After the CEO went on record supporting the decision, the airline received enough bad publicity to fill a 747.  Hastily, the CEO reversed the decision and donated to the man's favorite charity, Wounded Warriors.
• During violent protests against the government in Egypt, Kenneth Cole tweeted: "Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online at http://bit.ly/KCairo -KC"  A hasty apology was issued, also on Twitter.

So what changed?  Why do we expect our executives to be more compassionate today than we did in the past?  I think there are several reasons:

1. The Financial Crisis of 2008.  While it is debatable what the causes of the Financial Crisis were, I think the average citizen believes that unbridled greed was one of the primary drivers.  This was a major departure from previously accepted wisdom that greed is good: in the new world, a company's greed can not only hurt their customers but extend to society as a whole.  When a lack of compassion is perceived as being capable of bringing the country to the brink of financial chaos, we need to be more careful about the motives of our executives.  We no longer have the luxury of finding out motivations after the fact.
2. The rise of social media.  There has been much written on the increased scrutiny on individuals due to social media, and executives are not immune.  With this increased scrutiny, there are bound to be mistakes; moments of indiscretion being broadcast for the whole world or simple deafness to tone causing public relations nightmares.  These incidents have eroded our confidence in both elected officials and individuals in corporate America.  With the potential for any mistake to go viral within minutes, the public (and investors) expect executives to build a reputation of genuine concern for employees, customers, and other stakeholders.
3. Demographic and cultural shifts.  In general, the Millennial generation is much less tolerant of any behavior that stigmatizes certain groups or is not compassionate to those in need.  Offending various groups, whether it is a specific race or even the plus-size high school student, is not accepted.  Beyond being compassionate, we now almost expect corporations to have in-house charitable arms, giving back to the communities in which they reside.

The fact is that showing a lack of compassion is simply not good business.  With the heightened scrutiny, this lack of compassion, if evident in the individual, will manifest in a public forum eventually.  Businesses certainly need to spend time focused on ensuring there are appropriate checks and preparing for damage control of mistakes, but this is only half of the equation.  Boards of Directors need to take a much deeper look at character when forming succession plans.  Long term profitability will be better achieved through executives with a genuine customer focus and a greater sense of purpose.  Those that view customers as a necessary evil to the business of making money will ultimately fail.