As you’re reading this several hundred AOL Patch employees are walking around with bullseyes on their backs.  They know they’re a target because their boss — AOL CEO and Chairman Tim Armstrong — told them so last week during a highly publicized “all hands” meeting during which he very publicly fired another executive for videotaping the meeting.

The firing has been covered ad nauseam but if you haven’t seen the leaked audio catching Armstrong in the act, you can watch it here.

Armstrong, who co-founded Patch.com, a network of 900 local news websites that has come under much criticism for its content and working conditions, informed his employees on August 9 (a summer Friday no less) that Patch would shrink by 300 sites.

Since then Armstrong has apologized for the way he fired Abel Lenz, Patch’s ex-creative director who is now looking for a new gig.  But otherwise, employees are saying the CEO has been largely invisible.

“Not sure what he thought he was going to accomplish on that call on Friday but I can assure you all he did was create resentment and kill morale.  Everyone is just sitting around waiting for the bad news,”  an employee said.

Armstrong handled the employee meeting, and firing, wrong on so many levels that one doesn’t know where to begin.

But for starters…

• his tone was punitive from the outset and not in the least bit encouraging.  He missed a huge opportunity to showcase his human side.  A more sensitive communications approach would have resulted in at least a neutral tone in the ensuing media coverage vs. the bashing he’s endured.
• there was no exchange of information…just Armstrong telling, telling, and telling some more.  I’m not suggesting he run AOL by committee, but inviting suggestions from his employees to help stave off a Patch implosion gives his employees “skin in the game” and a sense of ownership, collaboration and hope.
• he was ambiguous.  He implied to analysts on the preceding day that the shrinking of the Patch network would mean employee layoffs.  But 24 hours later he was telling employees that layoffs could perhaps be avoided (by selling some of the Patch sites). When there’s a lack of clarity and direction, imaginations run wild and it’s human nature, in such situations, to think the worst.  His lack of clarity means that even Patch’s best employees are concerned about their livelihoods and are updating their resumes too.
• since then, Armstrong has largely been invisible, further heightening anxiety among his employees.

CEO.com reports that…

• up to 50 percent of a company’s reputation comes down to its leadership.  How are you feeling about AOL today?
• the reputation of a company’s CEO has a marked impact on customer purchasing decisions and investors’ investing decisions.  Are you buying from or investing in AOL today?
• there’s an 80% chance a company’s stock will drop 20% in a single month during a CEO’s administration and a good reputation speeds the way to recovery.

What CEO reputational qualities have the greatest impact on the overall reputation of the organizations they serve?  All Mr. Armstrong had to do was ask and listen:

• Honesty – A CEO must view business ethics as key to overall success.
• Respect – People are not objects a CEO owns.  CEOs who respect others are usually shown the same level of respect.
• Care – People (a.k.a. employees) are guided by feelings.  The best CEOs work to understand the feelings, values and beliefs of their employees.  A CEO and caring person can be one in the same.
• Integrity – the integrity of any organization starts with strong leadership; strong ethical leadership.
• Humility – legendary business consultant Jim Collins said that among other things, the best CEOs “display a remarkable humility about themselves, ascribing much of their own success to luck, discipline and preparation rather than personal genius.”

What would you add to the list?