This week, LEVICK Senior Vice President Patrick Hillmann was featured in Reuters, offering crisis management tips for Valeant Pharmaceuticals’ new CEO Joe Papa. Mr. Papa faced investors this week for the first time since its record-low first quarter earnings were announced more than a week ago.
In the article, Hillmann suggested that Papa, like any CEO, should have a playbook established to help soothe investors. The playbook should address two or three of the largest obstacles in the organization, followed by a turnaround plan that outlines how he or she will overcome them.
During the press conference itself, the investors expressed a lot of concerns. It is best that Papa has taken the problem head on by attempting to turn around potential concerns that investors could have.
Hillmann also notes that Papa should also demonstrate Valeant’s commitment to transparency through meaningful action by sharing a clear and established plan with the investors that would mitigate their fears and address their concerns.
While there is no set time-frame for any CEO to wait before addressing its crisis, Papa waited more than a week, which is never ideal. The reasoning could be from Valeant prioritizing a different audience over the investors, particularly its customers and employees. The customers and employees rely on Valeant for their livelihood, so Valeant needed to make sure to keep those target audiences loyal. Additionally, employees and customers are not the most forgiving group, so Valeant had to address that audience quicker than the investors. Investors are used to the gamble that is the stock market, which means they are the most likely audience to be able to be forgiving of a poor quarter.
As of now, all Valeant can do is wait and see if Papa can properly execute the playbook, keep its current investors, and focus on gaining new investors.