Archive for September, 2006
This week has been chock full of women and work themes. At the beginning of the week I was lucky enough to join a panel at IPG, my parent company, as we begin building a women’s network. I was even more fortunate to hear speakers’ Ilene Lang from Catalyst and Fran Rodgers from Families and Work Institute at the meeting. Since I was speaking in Dallas at a corporate event on women CEOs, the information was timely.
In my own research, one study stood out. Catalyst conducted a survey in 2004 on women and men executives’ aspirations to be CEO. They found that both men and women have equal aspirations to reach the corner office, whether or not they had children. Both men and women executives also have similar strategies for getting there — exceeding expectations, successfully managing others, seeking high visibility assignments and demonstrating expertise. Interestingly, they experienced similar barriers — not conforming to the company culture, lack of line experience and lack of awareness of organizational politics.
However the unsettling difference that did arise between men and women executives was that women endured a set of cultural barriers such as gender-based stereotypes, exclusion from informal networks, lack of role models and inhospitable corporate culture.
These gender-based stereotypes facing women surfaced in many global surveys that have been done around the globe. As Ilene Lang at Catalyst says, this global research finds that men are perceived to be better at “taking charge” and women at “taking care.”
Gender stereo-typing is subtle and not meant on purpose. When I mentioned this to a group of young women executives here in Dallas, they nodded in agreement.
The lesson I learned from this week’s immersion in women executives climbing the corporate ladder is that we still have work to do on fixing the workplace.
I was invited to write a monthly column for Ethical Corporation’s publication. Here is my first column. Exciting opportunity.
The Road to Recovery
It seems that reputation problems have been with us for centuries, if not since the beginning of humankind.
The Parmalat and Enron crises, the WorldCom debacle, and the Royal Ahold scandal all amount to modern day “Scarlet A’s.”However, carefully run and well-led companies do not need to be forever tainted.The good news is that companies can eradicate the stain of corporate sin, but first they need to know where to begin.Here are some rules of the road leading to reputation recovery.
Take the long view
Companies that emerge from a crisis or damaged reputation should expect it to take nearly four years (on average) to recover and build back stakeholder confidence.CEO Anne Mulcahy said that Xerox turned the corner on its recovery – after nearly a four-year effort. Building back public trust is a continuous process.
Face the crisis head-on…and don’t deny it happened
Some companies believe if they communicate as little as possible, it will lessen the crisis’ impact or make it simply disappear.Executives need to demonstrate that they are serious about repairing their reputation by making approved crisis information immediately available on their corporate Web site.Online disclosure is one way to reduce business uncertainty as the company begins to right itself.If managed well, Web-site visitors can quickly glean timely information from the site, and companies can put to rest unfounded rumors that they are closing ranks or concealing information.BP’s quick response on dedicated Web sites to the Texas City Refinery explosion and Alaska Pipeline corrosion are positive examples of decisive and transparent Web responses.
Break into easy pieces
The recovery process is long and arduous. Company leaders should organize the rebuilding plan around 90-day segments, and evaluate and communicate status to employees at each segment.This strategy provides the organization with a sense of security, achievement and momentum.
Don’t underestimate your critics
CEOs in crisis repeatedly remark how organized their critics can be during the recovery phase.For example, as a company announces a recall, class-action litigators are organizing meetings and creating a plan that can deliver a damaging backlash to the company.Although political campaigns are expected to include vocal and boisterous criticism, companies are still surprised by the nimbleness of pressure groups to mobilize into action.
Corporate responsibility is increasingly critical in helping companies reevaluate their values, point their moral compasses in the right direction and move on from a crisis.Citigroup turned to good works to reclaim its reputation after troubles emerged several years ago.The banking giant announced a comprehensive 10-year, $200 million commitment to support financial education programs worldwide and opened a corporate Office of Financial Education.A company’s future does not need to be permanently sealed by a reputation crisis.By carefully following a recovery plan that quickly, directly and strategically responds to the crisis, leaders can steer their companies, and all who have made it successful, toward even higher levels of prosperity.
A colleague (thank you Colin) sent me an article that appeared in The Sunday Telegraph titled “A Question of Trust.” Author Dan Roberts commented on how British chieftains were feeling unloved and unappreciated despite their roles in creating more corporate distrust today. I always find it important to remember that U.S. CEOs are not alone in widening the trust gap. The article cites a 1970s poll that found 60 percent of the British public believing that big business improved their lives with better products and services. Fast forward to 2006 and this figure falls to 21 percent. In other words, the vast majority in the UK do not see the benefits of business. The $64,000 question (or is it now the $64,000,000 question) is what is business doing about this neverending reputation crisis both in the US and UK.
The author brings up the usual culprits of corporate distrust — CEO pay, outsized hedge fund and private equity bonuses, accounting scandals and poor crisis responses that increasingly impact more people. Roberts concludes: “Until executives can reduce the number of these high-profile slips and convince us that the spoils of their success are distributed more equitably, no amount of PR drives and corporate social responsibility initiatives will close the trust gap.”
Roberts needed to add boards of directors to his call to action. I can’t say that boards are managing as well as they could with their new found power base post-Enron. Too many CEOs are being shown the door despite the fact that the same boards hired and monitored these newly departed CEOs. Boards need to be held equally responsible, like CEOs, for eroding public confidence in business. Think HP. By hiring the right CEOs and providing the right oversight, boards must play a greater role in reducing that trust gap further.
Business trust, UK, public trust, reputation crisis, crisis response, CEO pay, board reputation
What interested me was some information on how reputation can impact the bottom line. The interviewer remarked that a leaked internal study reported that nearly 8 percent of the store’s customers no longer shopped at Wal-Mart because of its reputation. Since Wal-Mart has 127 million customers, that’s alot of customers turning away. Lee Scott has certainly taken this criticism seriously and is turning the company upside down to meet expectations and win back those fleeing customers.
When your CEO asks you to show him or her some numbers about the link between reputation and sales, don’t forget to pull out this posting.
Always interesting to see when competitors announce new leadership. Not often that they happen on the same day. In the executive search field, Russell Reynolds and Heidrick & Struggles named new chief executives on September 14 — Matthew Wright and Kevin Kelly, respectively. Other executive search firms may follow suit as the next generation gets handed the baton. Rumors speculate that Spencer Stuart is next.
Interestingly, they both have deep experience outside the U.S. where their company headquarters are located. As the Russell Reynolds press release states, “The search for great leaders knows no boundaries.” I certainly agree with that. We increasingly see non-native leadership at the top with Sony being an often cited example. Still no women, however, at the very top of the executive search industry.
Happen to be staying at the Mandarin Oriental for a meeting and was curious if the extreme customer service I had heard about was true.
The Miami hotel is beautiful, elegant and stunningly designed. The rooms are spacious and comfortable. Someone mentioned to me that they loved the peek-a-boo bathrooms where they are open to the room. The good news is that the customer service is undeniably superb. The Mandarin Oriental’s reputation for impeccable service is real.
Here is an example that will stay with me. Last night as I was running on the treadmill with no fellow work-out enthusiasts in the fitness center, an employee came in and switched every TV screen to one channel. How many hotels actually have an employee check to make sure the fitness center TV screens are all in sync? I have to agree that the center looked perfect in its visual presentation after the employee made the change. Thankfully he turned all the TV screens to news and not sports. The right touch.
We all know that reputations often do not measure up to the promise. Before not too long, customers go elsewhere and reputations fade and diminish in stature. After experiencing the Mandarin Oriental’s service reputation first-hand, I can truly say it is deserved. Kudos to the hotel’s management and employees.
I have lots of favorite CEO quotes. But as I was reviewing my quote collection today, I found this one. Former GE CEO Jack Welch says, “I always reminded myself: Headquarters doesn’t make anything or sell anything.” The job requires being away from HQ, plain and simple. BP’s Lord John Browne once said that headquarters was wherever he was since he travels so much.
I keep thinking how ironic it is that Hewlett-Packard is in the news again and former HP CEO Carly Fiorina’s memoir is about to be published in October. Her book, Tough Choices, would undoubtedly be a hit without the headline making news coming out of HP. In case you have not heard, HP investigated its own board to identify who was leaking information to the media at the beginning of the year. Board director Thomas Perkins quit over the “questionable ethics and the dubious legality” of board chairman Patricia Dunn’s methods to find the leaker.
The old adage that all publicity — no matter how bad — is good publicity certainly applies in this case. As the HP “pretexting” saga unfolds, Carly’s book only becomes more interesting and a must-read. What timing! We can expect Fiorina to defend her actions and have a few choice words about the board’s behavior when she was CEO. There is a good chance, however, that chairman Patricia Dunn will be gone by the time the book hits the shelves.
HP does not need this level of distraction as Mark Hurd continues his turnaround of the giant computer company. Will be fascinating to watch how this crisis impacts the reputations of HP, Carly Fiorina and Mark Hurd. More to come.
September seems to have cast a spell in the C-suite. Chairman Bill Ford hires a new CEO from Boeing to run the auto giant. An outsider no less! Viacom’s chairman Sumner Redstone ousts CEO Tom Freston after nine months. Revelations that the HP board sought records of board member telephone calls to identify a leaker. [Interesting that when I typed HP board into Google nothing showed up about the front page story in today's WSJ about the unusual story. Most surprising. The story seems buried. How does that happen?]
As I have written before, it looks like this quarter is shaping up to be a doozy. It’s only Wednesday and the summer just barely ended. Chaos in the corner office is the theme.
The business pages of the U.S. top tier media (including the Financial Times) were pretty slim over the past few days. I guess no big news is good news. Everyone needs a breather. The race begins tomorrow as we all head into the last quarter.
As always, I caught up on some reputation-reading. Finished off a few magazines and several articles that were sitting in my “must-read” pile of papers. Did some thinking for a column I will be writing for Ethical Corporation (www.ethicalcorp.com) which is an independent publisher and conference organiser on how companies relate to the world around them.
Found this quote from WSJ Alan Murray (August 30, 2006): “Today’s CEO has to kowtow to a long list of folks who want a say in the business: public pension funds, hedge funds, regulators, attorneys general, armies of accountants, nongovernmental organizations, all with different agendas.” Murray was writing about how CEOs such as GE’s David Calhoun were passing up publicly-held companies for the greener shores of private-equity backed companies. Calhoun was just announced this past week as the new CEO of VNU. Personally, I was more intrigued by Murray’s list of stakeholders. For public company CEOs, this list only gets longer every year. I would have added academics and management gurus who get quoted regularly in the business press despite their lack of time spent working up close to CEOs in publicly-held companies (like many of us).
Another quote to my liking. This is from New BP American president Bob Malone(Fortune, 4 September 2006): “Texas City was a tragedy. And when I listen to the trader tapes there is no doubt, what happened may not have broken the law, but it broke our values.” Malone’s reference to broken values is well-put. Over the past 12 months, BP’s value-laden culture is sure taking a mean lickin’ as more and more unpleasant news is revealed about BP’s lack of attention to safety (Texas City refinery explosion and the Alaska pipeline corrosion) and market behavior (governmental inquiry into its propane gas trading). I usually believe that companies and their CEOs get three strikes against them before it starts to get better. BP may have hit its limit.
The race to the finish (end of 2006) has officially begun. The clock begins ticking.
reputation reading, ethical corporation, WSJ Alan Murray, stakeholders, BP, broken values, CEOs, reputation, GE, David Calhoun, publicly-held comapnies, private equity, Texas City refinery, Alaska pipeline corrosion, safety