Imagine you have put together a carefully crafted press release. You know the message you want to...
“Lower-value human capital”
Wow. Let that sink in for a minute.
What a way to describe people. And cutting their jobs.
The comment was made by Bill Winters, the long-serving chief executive of Standard Chartered, as he addressed the bank’s technology and Artificial Intelligence drive.
And it highlights the challenges and pitfalls organisations face communicating strategic changes around the technology and not adapting messages for different audiences.
The banking giant said it could cut more than 15 per cent of back-office roles by 2030 in favour of increased automation and adoption of new technologies, which include AI.
Mr Winter told the media: "It's not cost-cutting.
“It's replacing in some cases lower-value human capital with the financial capital and the investment capital we're putting in.
“We don’t have job losses, but we do have job role reductions in favour of the machines, and that will accelerate as we go forward into AI.”
Ouch.
Not surprisingly, the well below-standard comment turned the story into a reputational crisis as the bank faced a barrage of stinging headlines.
A day after making the remarks, Mr Winter seemingly decided his employees did have enough value to warrant sending them an internal memo, which was leaked to the media.
He said: "Many of you will have seen media coverage following the Investor Event in Hong Kong, particularly the reporting around automation, AI, and workforce changes.
"I know this may be unsettling when reduced to simple headlines or a quote out of context."
Ah, the old ‘taken out of context line’, that is so often used when comments cause ugly headlines.
He added: "Some roles will reduce in number, some will change, and new opportunities will emerge. We will continue to prioritise investment in reskilling and redeployment wherever we can.
"Where changes do happen, we will handle them with thought and care.”
Perhaps it would have been helpful to tap into that thought and care before he addressed the media.
Mr Winters can complain about his words being taken out of context. But the problem is that they are his words.
He said them aloud in front of the media.
And they are words that are always going to capture the attention of journalists, particularly when used while discussing redundancies.
The bank boss may feel aggrieved by the subsequent coverage, but his ‘context’ remarks will only be seen as an excuse and an attempt to minimise the damage.
Unsurprisingly, this response was not enough to end the furious reaction. So, Mr Winters took to LinkedIn on Friday to apologise - sort of.
While admitting his words had “caused upset to some colleagues”, he also published a “verbatim transcript” of what he had said to allow for a “better understanding of the important point I was raising”.
Personally, I’m not sure the apology was the right time to have another go at trying to justify the troublsome comments.
As one comment said: “I’m struggling to see the difference between what you said and what is written.”
How did we get here?
This is the key question.
Because it is hard to get your head around how such an experienced leader used such remarkably insensitive and dehumanising language to describe his workforce.
It is cold, disrespectful and brutal.
It is a boardroom and spreadsheet phrase that has been uttered in the public arena.
And it creates a damaging perception of how the bank regards those that work for it – profits over people.
This was a big announcement. So, it seems unlikely messages were not carefully prepared and language chosen with care and compassion.
Yet, somehow, the result is a classic CEO quote that will not be forgotten.
For my money, it is right up there with Tony Hayward’s “I would like my life back” response to the BP oil spillage crisis.
Flawed damage control
As we’ve already highlighted, Standard Chartered has quickly moved to damage control mode.
But banking on ‘taken out of context’ feels flawed.
No one buys that hackneyed excuse.
Mr Winters would have been much better off with an apology.
Admitting he made a mistake with his language choice, apologising for using it and explaining how it does not reflect how he views his workers would be a much-improved crisis communication strategy.
Not alone
As the AI conversation picks up pace, Mr Winters is not the only leader to struggle to find the right words to talk about how it is changing work.
A week before these damaging comments, John Waldron, the president and chief operations officer of Goldman Sachs, said that the company would use AI bots to automate its “human assembly line” and discussed “headcount”.
He told CNBC: “Our human assembly lines will become more digitized, digital agents will be our robots.
“I’m not sure dynamically how the overall headcount will change, but I think the firm is going to get much more resilient and much more scalable.”
What does this mean for you?
Well, we know from the conversations we are having with our clients that more and more time is being spent on developing AI and automation strategies as the technology changes and evolves at a pace.
And they, seemingly unlike Standard Chartered, are aware of the communication risks, particularly around hard decisions involving people.
It is why we are increasingly being asked to work alongside senior leadership teams on change communication tactics, strategies and message development.
We are helping to structure their communication approach about AI and shape internal and external messages.
And we are advising them on how to communicate changes and strategic transitions to staff, as well as identify potential internal and external risks.
The key with AI announcements is to move away from talk of costs and operational efficiencies.
The focus must be on the people, which can and should include customers and those who serve them.
It’s easy for your employees to feel they are not only losing their jobs but also their careers to AI. And for the support and retraining being made available to them to feel as daunting as the opportunities that AI creates feels exciting for your leaders.
Show you care about the human implications and shift from communicating to conversations. This should be paired with clear, visible, controlled and cohesive leadership at all levels of the business.
AI communication also needs to be about how the technology improves roles.
Work with your teams to collaboratively figure out how the technology can transform jobs and enable employees to spend their time on more meaningful and rewarding tasks.
How bad is the crisis for Standard Chartered?
It is clearly a blow to its reputation.
The quick backtracking on the comments suggests there is an awareness that its image has been harmed.
And that trust, which is so vital in the financial sector, has been broken.
City shareholders in the London-based bank were quick to show their disapproval. And Halimah Yacob, a former president of Singapore, called the remarks “disturbing” and “demeaning”.
It is worth noting that Singapore is a crucial market for Standard Chartered, which has around 9,000 employees there and counts Temasek, the Singaporean sovereign wealth fund, as its single biggest shareholder.
Also, leadership-based communication crises often linger, and I’m sure that fear will be on the minds of the media and comms team when fielding spokespeople for upcoming media appearances.
In short, big costs and implications for such an easily avoidable mistake.
Maybe it’s time for someone to start speculating on how AI could replace “lower-value” CEOs.
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