On the second page of today’s Houston Chronicle there is an article by Chronicle business columnist Chris Tomlinson from his Outside The Boardroom series entitled “Bad Behavior by CEO can be costly to shareholders”. This article is about how scandal-plagued CEOs can affect the value of a company, and uses as an example Paul Kruse, who retired this past Saturday as CEO of Blue Bell Creameries, and was its CEO during its highly publicized scandal involving extensive listeria contamination at several of its ice cream plants, especially its main plant at its headquarters in Brenham, Texas. Although this article is ostensibly about how the character of a CEO can affect a company’s bottom line, there seems to be the ghostly presence of Donald Trump haunting the entire article as well.
The full article can be read here: Bad CEO behavior can cost shareholders. It’s free on the Chronicle all this week, after which it will go back behind the Chron’s paywall on March 1. The entire article is quite interesting, but here are a few selected paragraphs:
The most interesting revelation is that family-managed firms are far more likely to experience a CEO scandal. These companies are apparently less likely to enforce strict discipline because office relationships are not strictly transactional.
…
A lack of discipline was what led to a listeria outbreak at family-owned Blue Bell Creameries in 2015 that allegedly caused three deaths.
Documents revealed that CEO Paul Kruse and his managers repeatedly ignored warnings that their plants had listeria, and managers failed to follow hygiene procedures.
If Blue Bell were a public company, Kruse would have lost his job when the scandal broke. But he remained on the job until he announced Saturday that he is retiring as president and CEO and will step down as chairman of the board.
But it’s the ending of Tomlinson’s column that is the most enlightening:
Everywhere you look, people talk about the importance of leadership.
But a necessary ingredient of great leadership is a strong character, because people will only follow those whom they trust. Trust is earned with integrity and loyalty, which is often reflected in a CEO’s personal behavior.
And then the final kicker:
Too many people, though, confuse charisma for character. Just because someone can attract others to them, that doesn’t make them good leaders. Sometimes it’s just narcissism, which explains why some of the flashiest CEOs flame out in personal scandals.
The bottom line is that charisma, experience, and skill are all important, but they are worth nothing unless the leader has good character. And if they don’t, it can cost the whole enterprise.
So even though Chris Tomlinson’s article is technically about Paul Kruse and the problems caused by CEO-led scandals, it also has he-who-shall-not-be-named running all through it, especially at the end (after all if you’re a business writer, you don’t want to anger your business readers/customers). I loved how Tomlinson chose “enterprise” as his last word, which can be interpreted in multiple ways—family business, corporation, country, world. So Tomlinson is trying to say something which he can’t come right out and directly say. But I think any semi-intelligent and well-read person would get the allusion.
But then passing through to the other side of the looking glass, there is this very business-friendly article on the front page of today’s Houston Chronicle’s Business section as well by business writer Mark Collette: “Blue Bell gets a new leader”. Sorry, this one is behind the Chronicle’s paywall, so I’ll give you its gist, if you can't already guess it.
Paul Kruse, who led Blue Bell Creameries through enormous growth, navigated it through a food safety crisis in 2015 and led the company through an ambitious return to market, is retiring. His replacement will be the first person from outside the Kruse family to lead the company in nearly a century.
Then a lot of glowing commentary about how wonderful Paul Kruse was and his rise from working on the assembly line to purchasing packing materials to replacing his father in 2004 as president and CEO, how he greatly expanded sales of Blue Bell Ice Cream, etc, etc, etc. And then came this bit of alternative journalism which I just love:
Under Kruse’s leadership, however — and with the help of a $125 million dollar bailout from oil tycoon Sid Bass — Blue Bell worked with private consultants, labs and government regulators to completely retool its equipment and its safety procedures.
To which I muttered, sotto voce, “As if he had a choice.” And of course the article contained this unsurprising comment:
A company spokesman denied a request to interview Kruse or the new leadership team.
So two different articles about Paul Kruse, retiring CEO of Bell Blue Creameries, on the very same day in the very same paper. And both completely different—different in tone, perspective, and information. Looks like one guy took the red pill, and the other guy took the blue pill. So I’ll leave it up to you to choose which you think is the more authentic. I’ve made my choice, and it’s the one with all the hidden Trump allusions in it as well. Good article Chris Tomlinson. For a business writer you can write with a subtlety I admire.