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posted: 6/16/2013 12:01 AM

Potty-mouthed CEOs should know better

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By Bloomberg News

Profane language can be a useful tool for ambitious executives, enabling them to express the power of their convictions and the seriousness of their cause.

It can also backfire, as the chief executive officer of Scotts Miracle-Gro Co., Jim Hagedorn, found out last week. Hagedorn was reprimanded for his use of inappropriate language; three other board members of the lawn-care company resigned because of the controversy. While it is unclear what remarks led to the reprimand and resignations, Hagedorn had a habit of employing colorful language when speaking with reporters, shareholders and the public.

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The boundaries of acceptable public and workplace discourse have long been contested. While many executives, such as Hagedorn, have had a penchant for salty language, public profanity has only recently found uneasy acceptance in business culture. Executives who try to motivate employees and other corporate stakeholders with tough talk sometimes enjoy significant success, but they also risk immediate legal liability and the future judgment of history.

It isn't hard to look back on the Gilded Age and find examples of rapacious and mean-mouthed executives. Yet, in an age when profanity wasn't fit for print, the content of their statements was often more offensive than how they said it.

During the Great Southwest Strike of 1886, for instance, the railroad financier Jay Gould famously bragged, "I can hire one half of the working class to kill the other half." Gould may have been correct -- he successfully employed armed toughs and the Texas state militia to put down the strike -- but such sentiment hasn't improved his reputation for posterity.

The robber barons probably used plenty of explicit language in private, but through the early part of the 20th century, profanity had no place in public discourse.

When dirty words cropped into public view, the guardians of morality stepped in. Responding to the use of rough language during World War II, Norman Vincent Peale, a minister (and author of "The Power of Positive Thinking"), lamented to The New York Times, "The public men of other years may have cussed plenty in private, but they had the good taste to keep it out of public address."

Public expletives have become more common, and executives have moved to leverage, or perhaps weaponize, foul language to their benefit.

In the 1980s and '90s, especially, a new breed of tough- talking executives rose to prominence. For turnaround artists and corporate raiders who found value in companies by stripping down the workforces, streamlining operations and selling unprofitable divisions, ruthless bravado and acerbic language were often their stock-in-trade.

Albert J. Dunlap, or "Chainsaw Al" as he was unaffectionately known, epitomized this aggressive style. A West Point graduate, Dunlap headed Scott Paper Co., beginning in 1994, and eliminated more than 10,000 jobs, or 35 percent of the workforce. "They call me abrasive, but I'm really just a catalyst," he told The New York Times.

The title of Dunlap's memoir, "Mean Business," coveys the tone he set. In 1996, in his first meeting as chairman of Sunbeam Corp., "he just yelled, ranted, and raved. He was condescending, belligerent, and disrespectful," according to a Sunbeam executive, Richard Boynton, who is quoted in John Byrne's "Chainsaw: The Notorious Career of Al Dunlap in the Era of Profit-at-Any-Price."

It wasn't his abrasiveness or profanity that brought Dunlap down, however. Instead, it was the questionable accounting that misrepresented Sunbeam's revenue. According to BusinessWeek, at what would be his last investors meeting at the company, Dunlap accosted a critic and said: "You son of a b----. If you want to come after me, I'll come after you twice as hard."

In 2002, as part of an agreement with the Securities and Exchange Commission, Dunlap agreed to never again serve as an executive of a public company.

This isn't to suggest that Dunlap was unique in his profanity; innumerable memoirs and accounts of business culture recount expletive-laden rants by managers, executives and employees.

Still, while public profanity seems to have become more common among executives, countervailing trends have worked to check its spread.

Most broadly, the civil-rights revolution of the 1960s and '70s marked racial and gender slurs as beyond the bounds of acceptable business discourse. Harassment and discrimination lawsuits stemming from inappropriate speech made slips of the tongue expensive errors.

In 1999, David Howard, a top aide to District of Columbia Mayor Anthony Williams, was forced to resign after using the word "niggardly" to describe the city's tight budget. By using a synonym for miserly that sounds similar to a racial slur, Howard's remarks offended another member of the mayor's staff and sparked a major national debate.

It seems unlikely that Scotts Miracle-Gro's reprimand of Hagedorn will generate a similar outcry, but it may remind executives to mind their p's and q's.

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