Stung by the response to the three automotive CEOs flying in and out of Washington in their private jets, the CEOs are making rather different plans for their return visit to Washington this week.
All three CEOs are driving to Washington in fuel-efficient hybrid cars. All have announced plans to sell their corporate aircraft. And Ford and GM plan to pay their CEO $1 per year if their companies take any government money.
What do you make of this? What's your reaction?
Is your reaction different to what it may have been if these cost-saving decisions were made before the first visit by private jet?
According to Andrew O'Keeffe, an expert in human instincts and author of The Boss, a bestselling novel about the impact of work on the human spirit, the answer to the last question will almost universally be 'yes'.
"One of our instincts called 'first impressions to classify' is at work here," O'Keeffe explains. "Humans make quick judgments from first impressions and use these quick judgments to classify experiences. Once people have classified their opinion, it's hard to shift that opinion. We judge subsequent events by how we have already classified the information."
Given that people have already judged the CEOs as 'wasteful' or 'greedy', it is almost inevitable that their interpretation of this latest news will be negative or cynical – 'I'll bet they still get their bonuses', 'poor things will be down to their last billion', or at best neutral – 'it's the least they could do'.
If the CEOs had driven to Washington in the first place (or flew by commercial flight) and taken a serious pay cut, people would more likely judge them positively as that would be the first impression.
Further, because they need to overcome the negative first impression, the automotive companies need to do more now compared to what they needed to have done at the start.
O'Keeffe's take on this is that the CEOs were left in a no-win situation. They had to reduce their largesse, but will never get the traction they want from doing so. But it's hard to recover once people hear and 'classify' what Ford's CEO said at the recent Congress Committee hearing. Asked whether he would consider cutting his current compensation package of around $22 million, he answered, "I think I'm okay where I am."
As O'Keeffe suggests, "The benefit of understanding instincts is that we know what will work and what won't, and we can then make intelligent leadership choices."
Unfortunately, it seems as if these CEOs are simply not aware of the human phenomena of "first impressions to classify".
Compare these actions with those of the CEO of Japan Air Lines, Haruka Nishimatsu, who receives an annual salary of $90,000.
Yes, that's right, not $9 million, not even $900,000, but $90,000. And there are no bonuses or share options attached. In fact Nishimatsu gets paid less than his pilots.
Nishimatsu clearly understands the "first impressions to classify" principle. JAL was going through some very tough times in 2007 when Nishimatsu was appointed CEO. Jobs were cut. People were asked to take early retirement. As he commented "The employees who took early retirement are the same age as me. I thought I should share the pain with them. So I changed my salary."
Now that's really "walking the talk".
What's the message here for CEOs, and in fact all managers?
People do base judgements on their instincts. These instincts can be understood. The key for managers in stressful times such as these, is to ask oneself "What's causing people the most pain at the moment?" Or, "What are people most worried about?"
Being clear on these concerns, one can then pre-judge how key decisions will be seen by asking "What will be the likely response? How will others see this?" But most importantly, "If someone else did this, what would my gut reaction be?"
