When Scandal Strikes the C-Suite: What Two Babson Professors Say Companies Should Do
The now infamous Coldplay concert kiss cam that caught tech company CEO Andy Byron having a romantic moment with the company’s head of human resources not only ignited an Internet firestorm, but it also launched a corporate crisis that would challenge even a seasoned entrepreneur.
In less than 48 hours after the C-suite sweethearts hastily ducked the Coldplay cam, the moment escalated into a scandal for Astronomer, a data orchestration startup, as allegations of the inappropriate workplace relationship combined with a wave of fresh scrutiny into Byron’s past behavior.
How a company responds to this kind of scandal—especially when it involves top leadership—can make or break its credibility, said Babson Management Professor Joseph Weintraub, an expert in organizational behavior and leadership management.
For Astronomer, a company founded in 2017 that achieved unicorn status in 2022 with $1 billion or more in valuation, the fallout was swift. Following several punishing days of round-the-clock social media coverage, Byron resigned, and co-founder and Chief Product Officer Pete DeJoy was asked to serve as interim CEO.
“The events of the past few days have received a level of media attention that few companies—let alone startups in our small corner of the data and AI world—ever encounter,” DeJoy wrote on LinkedIn Monday. “The spotlight has been unusual and surreal for our team and, while I would never have wished for it to happen like this, Astronomer is now a household name.”
The co-founder underscored his commitment to the company’s customers and employees in his message, adding, “our story is very much still being written.”
For ventures watching from the sidelines, the moment raised a broader question: How should a startup or venture react when its leadership becomes the center of an ethics scandal?
We asked Weintraub and Keith Rollag, also a professor of business management at Babson College, for their take on how companies should respond when ethics, leadership, and company culture collide. Here’s what they had to say.
Creating a Positive Culture
Joseph Weintraub, management professor and expert in organizational behavior:
“This is a good example of having espoused values and the actual values shown by leaders. In this case, the company appeared to act quickly and also appears to have shared their commitment to their values publicly, which some companies do not do. It is a tribute to any organization when they make it clear that the behavior of every employee, including its CEO, is accountable for behaving in ways that uphold the values and integrity of the organization.
“I would also recommend that the company address this incident as a positive step about creating and maintaining a positive culture, where every employee has accountability for their actions. In this case, the organization also demonstrated that there are consequences of violating the organization’s values. It sends a powerful message to all employees that everyone has a role in maintaining high standards of professional conduct.
“When hiring the next CEO, it is important that the person being hired has a proven record of honesty and integrity and also someone capable of affirming their commitment to create a positive organizational culture. The board also needs to state its confidence in the new CEO and in the employees who have lived up to the standards of the organization. Messaging needs to focus on the positive aspects of the organization and its culture that allowed a speedy and positive resolution of the issue with a commitment to support the integrity of the organization and its employees.”
Still Being Written
Keith Rollag, Babson management professor and expert in organizational leadership:
“I’d say that it appears the ‘Coldplay Test’ has joined the ‘New York Times Test’ as a litmus test for ethicality—would you want your actions to be displayed on the Jumbotron at a Coldplay concert?
“It also shows that awareness begets scrutiny, and scrutiny begets scrutiny. The initial surprise and titillating nature of the Jumbotron incident quickly moved it from a surprising and awkward event to a scandal of an affair to allegations of past inappropriate behavior of the CEO. There was also the collateral focus on the affected spouses and the unwanted attention it brought to their private lives. It went from viral to a meme in less than 48 hours.
“There wasn’t much the company could do other than start an investigation and push for the CEO’s and the VP of HR’s resignation. It’s hard to say what the impact will be to Astronomer—certainly a CEO affair is bad PR, but now everyone has heard of the company (for good or bad). Clearly the company needs to move forward and rededicate themselves toward ethical behavior of all employees.”
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