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Starting Fresh After a Scandal

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Think of it as walking into a neighbourhood leveled by a tornado. That pretty much sums up what a special type of CEO faces -- one who's been brought on after the termination or resignation of a scandal-ridden predecessor. Some demolished structures need to be rebuilt, others need extensive repair, and morale needs to be restored.

You'd think that the only thing that a CEO version 2.0 would have to do is gather the troops, give them a pep talk, and get back to business as usual but without the drama. That's not the case, and here's why:

The Challenge

Sure, by this point, the press has had a field day describing whatever nefarious activities -- be they criminal or naughty -- that CEO version 1 engaged in. But how culpable are the people who were supposed to have provided oversight? As they say, don't believe everything you read, see or hear. There's likely much more that lies beneath the surface.

There's a huge difference in the appointment of a CEO when no scandal is involved. In that scenario, the new chief executive typically wants to take a high-profile position and quickly set his or her own style and tone. It's akin to saying, "I'm the new king, long live the king."

However, when a CEO comes in after a scandal has forced the predecessor's termination, the new chief needs to be more circumspect.

The challenges here are subtle. Let's say you're CEO version 2.0 -- you're facing an entirely new and complex landscape. Your predecessor likely had a bunch of strong supporters, and you'd be wise to not vilify them. You, as the new head, cannot for a minute assume that your first task is to shine a light in every corner and root out the mess you expect to find.

Your first piece of work is to get a lay of the land and find out the actual source of the mess. And you do this by learning, through due diligence, the true reasons for the predecessor's dismissal, beyond the publicly stated reasons or beyond what the board of directors may have told you. Nothing that went on before you came on board is really black or white.

A case in point is Brian Dunn. Dunn, CEO of Best Buy, resigned abruptly last month. Media had reported that Best Buy was investigating several complaints that he had acted inappropriately with a female employee. Then came a point when enough was enough, and Dunn left.

On the surface, it would seem that the board was reacting to the possibility that Dunn's alleged sexual activities might be affecting the company's performance and stock price. But it's highly possible there was more going on than just those allegations.

Shut Up and Listen

The way for you to get at this more obscure but vital information is by listening to what managers and workers in the trenches have to say. You'll need to be more quiet than you typically want to be -- you don't want to make enemies. And you might even need to be more Machiavellian to really understand the facts on the ground.

You might learn stuff you hadn't suspected. Perhaps that the company is rife with internal politics. Or that relationships within the board of directors are less than optimal. Or that the board of directors has issues with certain members of upper management.

Trust-building is a gratifying accomplishment for any manager. In this case, however, it's not gratuitous. It's essential for CEO version 2.0 to become not the proverbial Mr. Clean or a new sheriff with guns blazing, but the sort of person who can get the company to try to put a scandal in the past.