Archive for June, 2007

Reputation Never Sleeps

28th June
2007
written by Dr. Leslie Gaines-Ross

In case you missed this oped in today’s (27 June) New York Times by columnist Thomas Friedman, this is a must read for those interested in reputation. Certainly made me stop and think and believe me, no one is going to recognize me in the airport. However, I could not help but think about how I represent the company I work for 24/7. And how I represent my Gaines-Ross family 24/7. And how I represent ME and my reputation 24/7. A good wake up call for these new times we live in.

The Whole World Is Watching
Three years ago, I was catching a plane at Boston’s Logan airport and went to buy some magazines for the flight. As I approached the cash register, a woman coming from another direction got there just behind me — I thought. But when I put my money down to pay, the woman said in a very loud voice: ”Excuse me! I was here first!” And then she fixed me with a piercing stare that said: ”I know who you are.” I said I was very sorry, even though I was clearly there first.
If that happened today, I would have had a very different reaction. I would have said: ”Miss, I’m so sorry. I am entirely in the wrong. Please, go ahead. And can I buy your magazines for you? May I buy your lunch? Can I shine your shoes?”
Why? Because I’d be thinking there is some chance this woman has a blog or a camera in her cellphone and could, if she so chose, tell the whole world about our encounter — entirely from her perspective — and my utterly rude, boorish, arrogant, thinks-he-can-butt-in-line behavior. Yikes!
When everyone has a blog, a MySpace page or Facebook entry, everyone is a publisher. When everyone has a cellphone with a camera in it, everyone is a paparazzo. When everyone can upload video on YouTube, everyone is filmmaker. When everyone is a publisher, paparazzo or filmmaker, everyone else is a public figure. We’re all public figures now. The blogosphere has made the global discussion so much richer — and each of us so much more transparent.
The implications of all this are the subject of a new book by Dov Seidman, founder and C.E.O. of LRN, a business ethics company. His book is simply called ”How.” Because Seidman’s simple thesis is that in this transparent world ”how” you live your life and ”how” you conduct your business matters more than ever, because so many people can now see into what you do and tell so many other people about it on their own without any editor. To win now, he argues, you have to turn these new conditions to your advantage.

For young people, writes Seidman, this means understanding that your reputation in life is going to get set in stone so much earlier. More and more of what you say or do or write will end up as a digital fingerprint that never gets erased. Our generation got to screw up and none of those screw-ups appeared on our first job resumes, which we got to write. For this generation, much of what they say, do or write will be preserved online forever. Before employers even read their resumes, they’ll Google them.

”The persistence of memory in electronic form makes second chances harder to come by,” writes Seidman. ”In the information age, life has no chapters or closets; you can leave nothing behind, and you have nowhere to hide your skeletons. Your past is your present.” So the only way to get ahead in life will be by getting your ”hows” right.

Ditto in business. Companies that get their hows wrong won’t be able to just hire a P.R. firm to clean up the mess by a taking a couple of reporters to lunch — not when everyone is a reporter and can talk back and be heard globally.

But this also creates opportunities. Today ”what” you make is quickly copied and sold by everyone. But ”how” you engage your customers, ”how” you keep your promises and ”how” you collaborate with partners — that’s not so easy to copy, and that is where companies can now really differentiate themselves.

”When it comes to human conduct there is tremendous variation, and where a broad spectrum of variation exists, opportunity exists,” writes Seidman. ”The tapestry of human behavior is so varied, so rich and so global that it presents a rare opportunity, the opportunity to outbehave the competition.”

How can you outbehave your competition? In Michigan, Seidman writes, one hospital taught its doctors to apologize when they make mistakes, and dramatically cut their malpractice claims. In Texas, a large auto dealership allowed every mechanic to spend freely whatever company money was necessary to do the job right, and saw their costs actually decline while customer satisfaction improved. A New York street doughnut-seller trusted his customers to make their own change and found he could serve more people faster and build the loyalty that keeps them coming back.

”We do not live in glass houses (houses have walls); we live on glass microscope slides … visible and exposed to all,” he writes. So whether you’re selling cars or newspapers (or just buying one at the newsstand), get your hows right — how you build trust, how you collaborate, how you lead and how you say you’re sorry. More people than ever will know about it when you do — or don’t.

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Big Shots…Hot Shots

25th June
2007
written by Dr. Leslie Gaines-Ross

A new ABC TV drama is launching this fall called Big Shots. It’s about CEOs–those hot shots whose reputations need some mending! All of the hot CEOs are youngish, muscular and have workloads that allow them time to make it to the gym or links. (So says BusinessWeek in its June 25th issue.)

Just when CEOs are getting around to cleaning up their reputations (slowly I know), we get a series that will make them look shallow, greedy and steamy. Perhaps no one will take it too seriously. Lets hope not. I am curious what they will be wearing! No, just kidding.

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Hope Is Not a Plan

24th June
2007
written by Dr. Leslie Gaines-Ross

Interesting interview in this week’s Wall Street Journal on JetBlue’s new CEO Dave Barger (“Changing the Course of JetBlue” by Susan Carey, June 21). I particularly liked Barger’s quotes about facing crises, seeing early warning signs and recovering reputation. Here are the quotes:

“Hope isn’t a plan. You better assume that Plan B is not going to materialize either, so what’s Plan C and D.”

“…apologize and then get on with it. What I heard from so many customers was, ‘Thank you for the apology, stop apologizing, go fix it.’”

“There wasn’t an event or a meeting, but there were smoke signals, whether it was the cost creep or the decision to take on 35 airplanes a year.”

“[A consultant] said ‘You keep blowing the same candles out.’ You end up trying to fix the same problem the same way, or the same problem crops up and you try another fix, but there’s not a comprehensive fix. As a leadership team, you better be listening to the signals because otherwise here’s the next airplane and the next new city and we’re going to blow the same candles out again.”

Barger’s tip on leading a company is “to communicate three times more than seems necessary.” Communicating three times more than seems necessary fits squarely with Jack Welch’s dictum that as CEO you have to communicate so much it practically makes you gag. Not the most pleasant description but certainly true these days. It is harder than ever to get messages throughout the organization as employees are bombarded with news, challenges and competitors.
I once heard a CEO say that you should take whatever bad news you hear and multiply it times ten. The thinking was that the news must be pretty bad if it reaches the corner office. CEOs and boards are notoriously the last ones to know when things go awry. Those early warning signs are worth paying attention to as Barger suggests. The hard question is how to know which ones are going to dissipate or start a fire.

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Reputation Defense

21st June
2007
written by Dr. Leslie Gaines-Ross

You might want to check out the furor over CEO of Whole Foods’ latest blog entry. John Mackey responds quite pointedly and angrily to the Federal Trade Commission’s (FTC) challenge to Whole Foods merger with Wild Oats.

As Mackey says, “I provide explanations of how I think the FTC, to date, has neglected to do its homework appropriately, especially given the statements made regarding prices, quality, and service levels in its complaint. I also provide a glimpse into the bullying tactics used against Whole Foods Market by this taxpayer-funded agency.”

The response is very long if you care to delve into it. I think this is an example of CEOs not turning the other cheek when they disagree with government agencies or the media. This reminds me of General Motors’ blog response to The New York Times’ columnist Thomas Friedman’s editorial about the danger of SUVs. GM took to the blogosphere to tell its side of the story. Mark my words–we are increasingly seeing companies fight for their reputations by any means available. Other examples include Wal-Mart starting WalMartfacts.com to fight against its powerful critics and former AIG CEO Hank Greenberg not fading into the wallpaper after accusations were levied against him. There is definitely something afoot.

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Reputation Scorecards Galore

20th June
2007
written by Dr. Leslie Gaines-Ross

It has been an interesting week for scorecards. Since I consider myself a scorecard maven (having cut my teeth on Fortune’s Most Admired Companies survey), my interest in new scorecards or league tables never tires. Several interesting developments in the reputation scorecard ecosystem worth noting:

1. A new climate change scorecard was launched this week (noted in The New York Times, 6/19/07). The objective of the scorecard is to inform consumers on which companies are supporting climate control so they can factor this into their purchasing decisions. The nonprofit group Climate Counts ranks companies according to their ability to halt or add to greenhouse gas emissions and how well they disclose activities. A total of 56 companies across eight industries were ranked. Super rankings went to Canon, Nike and Unilever. Interestingly, several food companies were at the bottom end of the transparency continuum. Climate Change used 22 criteria such as efforts to reduce climate impact, supporting or opposing global warming legislation, top management support, and supplier requirements.

2. Wow. The Annapolis Group, a conferation of liberal arts colleges, announced that they decided not to particpate in the U.S. News and World Report survey this year. As The New York Times reported today (6/20/07), this represents a “growing rebellion” against the magazine. Those are fighting words. Since the U.S. News college rankings are so widely used as guides for high school graduates, this is all out war. The Annapolis Group which includes colleges such as Barnard, Sarah Lawrence and Kenyon are clearly working to manage their own reputations and not leave them up to the media. The group smartly reported that they are working on their own system to compare colleges.

3. Another media reputation scorecard surfaced in my readings this week. It can be found in the work of Assistant Professor Susan Moeller at Philip Merrill College of Journalism at the University of Maryland. Dr. Moeller found that the news media lacks transparency –”News outlets call for transparency by others and are balking at transparency for themselves.” The study is titled Openess & Accountability and examined 25 of the world’s top news sites to see which ones publicly correct their errors, are transparent about who made the errors, list their staff, and invite reader comments and criticism. Which media received top honors? The most transparent were The Guardian, The New York Times, The Christian Science Monitor and National Public Radio. Interestingly, at the bottom were Time, Al Jazeera (English), CNN and The Economist. The New York Times learned their lesson well from the Jayson Blair scandal. Hurrah for them.

Reputation scorecards are proliferating on a daily basis. We keep track of them and watch

them proliferate at record rates . There are many advantages to scorecards since they keep companies attentive to what is important and to stakeholder perceptions. However, scorecard methodologies are not always sound and buyer beware. In short, they help keep us all honest.

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You-Name-It Officer

13th June
2007
written by Dr. Leslie Gaines-Ross

Interesting article about title inflation in wharton’s knowledge newsletter — knowledge@wharton. One sentence certainly caught my eye since I am Weber Shandwick’s chief reputation strategist. “But what about chief talent officer, chief cultural officer, chief innovation officer, chief reputation officer, chief apology oficer and chief geek, to name just some of the more contemporary titles that have cropped up in today’s companies?”

The article went on to say that these newly emerging titles are not really the result of title promotion but instead evidence of increasingly flattened hierarchies. Wharton professor Betsey Stevenson is cited as saying that since people in flatter organizations need to be distinguished in some way and there are fewer rungs on the corporate ladder to climb, new titles get invented. The professor goes on to say that these unique titles help attract talent along with a little more money.

Other reasons for title invention include signaling the importance to the organization of a particular function or initiative. I buy that.

I guess I am part of the you-name-it club.

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The modern chief executive

10th June
2007
written by Dr. Leslie Gaines-Ross

The New York Times’ business columnist Joe Nocera wrote about GE’s CEO Jeff Immelt in the Saturday paper (June 9). I enjoyed the piece. Nocera described Immelt’s winning unflappable leadership style and then described how Immelt had all the qualities of the modern CEO. Here is what he said: “They need to be good listeners, ambassadors to the larger world, and leaders who others follow not because they have to but because they want to. They need to be able to do really hard things–change a strategic direction, sell a long-valued division, lay off employees–with such a deft touch that nobody revolts. Informality is important. Charisma is important. Empathy is important. Admitting mistakes is important. The modern C.E.O. has to be comfortable in his own skin. These days that quality–”authenticity,” the management gurus call it–is what gives employees confidence in the boss, and makes them willing to ask ‘How high?’ when he wants them to jump.” Nocera writes that Immelt is such a person.

This unflappability is critical to being a good CEO today. With unexpected events so predictable now, CEOs need to be able to manage during difficult times when their companies are under pressure and intense scrutiny. Employees build confidence in their leaders when they trust that they can withstand a company crisis and steadily lead them towards recovering their company’s good name. Managing reputation is increasingly an important part of the chief executive position. This ability to remain calm and not point fingers during the predictable surprises of the day is another key to leadership that Nocera could have mentioned.

As I finish work on a book about leadership during the trials and tribulations of reputation failure and restoration, I admire how some leaders are able to see around the corners and calm the turbulent waters that are rising around them when times are tough. Since Immelt seems to know he has been given a 20-year reign to lead GE, he is most probably able to approach his time with GE with equanimity and a long-term view. I imagine that makes a big difference.

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Alas, U.S. CEO Tenure Lengthening

8th June
2007
written by Dr. Leslie Gaines-Ross

Thought I should not ignore the work that my team at Weber Shandwick does and should mention some new information we just released on CEO tenure. [Thank you Meghan Paul!] We found that among the upper echelon of the world’s most powerful CEOs, North American CEOs had longer tenures in 2006 than their European and Asia Pacific counterparts. In fact, the average tenure of departing North American CEOs was 8 years, 6 months versus 6 years, 9 months for European CEOs and 4 years, 3 months for Asia Pacific CEOs. Significantly, the tenure of North American CEOs increased 20 months from 2005. [The findings are based on CEO departures at the world’s 500 largest revenue-producing companies.]

The lengthening of North American CEO tenure bodes well for corporate America and possibly reflects better board selection and succession planning. For the largest companies in the world, an average tenure of nearly 6.5 years is a welcome sign of stability and strength. Longer North American tenures may also be attributed to a greater proportion of CEOs leaving in 2006 for normal reasons such as retirement, planned succession, promotion, political appointment or change in employer. In 2005, more North American CEOs left against their will than in 2006.

Good for us in the U.S. After several years of tough times for CEOs, it looks like we are settling down to some stability and certainty. That is good for the reputations of CEOs in the U. S.

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Surviving New CEOs

2nd June
2007
written by Dr. Leslie Gaines-Ross

Harvard Business Review has a terrific article on best strategies for keeping your job when a new CEO arrives on the scene (May 2007). Surviving Your New CEO was written by Kevin Coyne and Edward Coyne (I guess they are related!). What’s striking is that when a new chief executive takes charge, the chances are high that executives will be packing their bags sooner than later. Most exiting executives find themselves leaving for lower-rung jobs elsewhere, jobs in smaller companies or at home on retirement leave. The choices are not pretty.

Here are some of the more startling facts:

1. When there is no CEO change, the average executive turnover is 15%.
2. When there is a new CEO from within the organization, the average executive turnover is 17%.
3. When there is a new CEO from outside the organization, the average executive turnover jumps to 25%.

Those young whipper snapper execs who think they stand a better chance of surviving a new CEO compared to their gray hair colleagues are wrong. Those under 52 years old are as likely as those over 52 years of age to get the boot. Ouch.
So how do you survive the changing of the guard at the top? Here is their advice: 1) Show your goodwill, leave your baggage at the door, study the CEO’s working style, present a realistic game plan, be at the top of your game, and offer objective options. Makes sense.

Another fact that I liked learning from their article was that CEOs don’t waste time picking their keepers and goners. It takes CEOs on average 60 days to decide who will make the “A” team and who will be shown the door. First impressions count. Ouch again.

This is a terrifically insightful article. Since CEO turnover is so high today, everyone needs this advice on what to do when a new captain of industry arrives in town.

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