Archive for January, 2011
Where is privacy going? Do all newborns have digital footprints in addition to those inky-stained ones on birth certificates? Are we going to need pre-natal reputation managers in the near future?
A survey by AVG among mothers in several countries found that 81% of children under the age of two had some form of digital profile including photos online. This percentage was even greater in the US where an astounding 92% of children under two have an online profile. It gets even stranger so hold on. Nearly one quarter — one in four! — have uploaded their pre-birth sonograms online. Again, US moms are more prone to sonogram-posting (34%). Is technology getting out of hand? And nearly one in 10 (7%) moms have picked out an email address for their young ones with nearly as many having a social network profile already.
Privacy has to be among the greatest risks facing humankind as we march into the future. Parents have to learn to be extra cautious with their privacy controls if they want to maintain some sort of safeguard for their growing children. Of course, young parents today have only known life online.
All of this makes me wonder if in year 2050, we have to employ baby reputation managers to protect our children’s backgrounds and photographs from being used improperly?
We have a lot of work ahead to understand the true dimensions of privacy loss and how it will affect this generation coming up. We have already seen the downsides (along with the upsides of course) in recent years but the early warning signs of concern are here.
It is now the end of the week and I promised to mention something about the other half of our results on executive top-tier conferences, especially as the World Economic Forum is happening this week. Nearly three out of 10 industry-leading CEOs spoke at one or more top- tier business events in 2010, according to our new analysis. [For each of the 55 industries identified in the World’s Most Admired Companies survey, Weber Shandwick examined where each CEO spoke in 2010.] Key findings are:
- Among those who took to the podium, the World Economic Forum at Davos was the leading executive speaking platform for industry-leading CEOs.
- The World Economic Forum was followed by the Clinton Global Initiative among our list of Five-Star conferences in 2010. Other forums are below.
|Industry-Leading CEOs’ Top ThreeExecutive Speaking Engagement Venues in 2010|
|(1) World Economic Forum at Davos|
|(2) Clinton Global Initiative|
|(3) Fortune Most Powerful Women Summit (tie)|
|(3) The Wall Street Journal CEO Council (tie)|
|Other Events: (alphabetical order) Committee Encouraging Corporate Philanthropy’s (CECP) Board of Boards, Chief Executives Club of Boston, Milken Institute Global Conference, National Press Club, Wharton Leadership|
- The global economy and outlook was the leading topic for industry-leading CEOs who participated in these events. Other themes included education, gender equality and company- or issue-specific opportunities. What will top executives talk about throughout 2011 if the economy recovers…..perhaps they will focus on their positioning and differentiation and corporate responsibility will rise again in popularity (it has slowed we think). I did hear that regional forums on corporate responsibility are increasing.
Since we always like to look at a different segment of the executive conference business — this year industry-leading CEOs and leading women — we are looking for any ideas for next year. Got my thinking cap on. Let me know what you are thinking too.
Yesterday we released our analysis on where industry-leading CEOs and the most powerful women in business invested their time speaking in 2010. Reputations can be shaped at such top-tier events and company stories can travel the world, if properly socialized. We used to depend on media coverage to get the message out about a speaking platform but with social media at our fingertips today, a speech before 50 people can travel fast to many more influential people than ever imagined. If companies can properly distribute their executives’ speech-making online, they can now realize an even healthier ROI for their executives’ time than ever before. And let’s not forget how much time, resources and energy goes into just one speech or presentation. It is never a walk in the park!
I am going to blog backwards about our findings by starting with what we learned about the most powerful women in business first and get to the industry-leading CEOs later this week. Like we had in grade school, today is backwards day.
I am quite pleased that we decided to look at the most powerful women in business because this is a small, exclusive club that demands further research in the communications field. Greater demand for female leaders was recently underscored when we learned that the World Economic Forum now requests that 20 percent of this year’s strategic partnership delegates be female. That polite request is sure making the rounds because I see it popping up all over. Despite the small sample size of these most powerful women (alas!), we did learn some interesting trends about what they’ve been doing on the speaking circuit over the past 12 months. And they’ve been busy. Here are some snippets from our analysis:
- This elite group of powerful business women was extremely active on the speaking circuit in 2010. A large eight out of 10 (82 percent) spoke at one or more events in 2010.
- In addition, the average number of events that each woman spoke at in 2010 was 3.2 events, with 11 women having spoken at five or more events.
- The leading speaking forums in 2010 for the most powerful women executives included the World Economic Forum, Fortune Brainstorm: Tech, the Women’s Conference (hosted by former California First Lady Maria Shriver and Governor Arnold Schwarzenegger), Daily Beast’s Women in the World, and not surprisingly, Fortune’s Most Powerful Women Summit (although not everyone who makes the list is a speaker). However, there was also a wide range of other types of conferences where top women in business spoke such as Business for Social Responsibility (BSR) Annual Conference, Committee Encouraging Corporate Philanthropy (CECP) Board of Boards, Milken Institute Global Conference, and The Wall Street Journal CEO Council. Micho Spring, our chair of the Global Corporate practice at Weber Shandwick said: “The vast majority of these women leaders are taking their communications and storytelling roles seriously. There are not only many women’s conferences for female leaders, but many other non-gender specific platforms as well.”
- Leading women executives are out in force. This is quite a broad range which shows that there is demand for these top executives. The types of conferences can be categorized as follows:
|Types of Speaking Engagement Venues Most Powerful Women in Business Spoke in 2010|
|Industry Events (50%)|
|Women’s Leadership Events (43%)|
|Academic Events (40%)|
|Five-Star* Events (35%)|
|Function-Specific (18%) (i.e., ANA Masters of Marketing, NACD Directorship Forum)|
Just as rankings are growing leaps and bounds every year, I see the executive conference business expanding even further. Companies are shaking off the economic woes from the past two years and getting back on the trail to differentiate their companies, narrate their responsibility and possibly turn back the anti-business wave that has beset so many. Conferences have an untapped way of validating companies by tacitly endorsing that their executives have something to say that is meaningful and forward-looking about our collective futures. And women execs are clearly doing their part as well.
CEO reputation is always of interest to me and of course this week has been a cataclysmic and newsy one with the medical leave of Steve Jobs at Apple and Google Eric Schmidt’s relinquishing of the CEO title to Larry Page.
WIth CEOs on my mind, I stumbled across a research study by Wharton finance professor Luke Taylor who built a model to understand what happens when boards fire a CEO and what holds them back, if anything. Taylor found that there are two costs to firing a CEO — the severance payment (direct costs including headhunters and other exec departures) and second, what he calls “entrenchment” costs. Entrenchment costs are the personal ties that get severed when board members decide to let a CEO go.”Taylor’s model found that the entrenchment cost per firing was, on average, $1 billion — far more than the $300 million in direct costs.”
One of the downsides to firing CEOs in his model is that more aspiring executives might not choose the CEO track. In past research I have done, I learned that the CEO role was already diminishing in stature due to public scrutiny and stress. The economic problems of recent years have probably dampened that corner suite goal even further. See below.
His model does, however, predict that if the entrenchment cost went to zero — meaning that sacking a CEO came with only financial costs and no intangible consequences — the annual rate of CEO firings for the S&P 500 would go from 2% to 13%. That would result in a one-time bump in value for the S&P 500 of 3%. Taylor notes that this higher level of firings could potentially cause talented individuals to choose career paths other than those that might lead to a CEO position.
The whole idea of entrenchment costs is fascinating, especially because it is over three times more costly than just severance costs according to Taylor’s research model. The Wharton Leadership article said:
According to Taylor, this remaining $1 billion probably stems from two factors. First, there is a personal cost to board members who terminate the company leader — in the form of the time and stress of making a management change — as well as the loss that directors face in the departure of a business ally or golfing friend. Another contributor may be the fact that the board simply does not care all that much about maximizing shareholder value — at least not as much as keeping a CEO with whom they feel comfortable.
Of course this became more interesting when I read that entrenchment costs depend on company size. For the larger S&P 500 companies, Taylor found that the entrenchment costs were nearly zero. Whew. That was a relief to learn since this research was alarming me – board members hesitating to fire poor-performing CEOs because of their feelings (?) and losing golf partners (??). I agree with Taylor that the larger the company, the more board members have to lose in their own reputational equity. No one wants to be on those board of shame lists.
Reputation works in funny ways but maybe it works well when it comes to decision-making on large company boards. Sounds like a good thing.
There is an interesting article on Cnet about online reputation management. The article by Tom Krazit is mostly about the many ways that online reputation companies help people manage their reputations online. There have been many articles on online reputation management but I suspect that the reason this article appeared when it did was due to the change in name at ReputationDefender to Reputation.com. Why did ReputationDefender changes its name? It says on their website the following: ”It also better communicates the scope of our solutions, beyond the “defensive” and onto the “proactive” face of reputation and privacy management. Through Reputation.com, we will continue to focus on delivering high-quality reputation management and privacy products, but we will also focus more broadly on the issue of Internet identity and proactive reputation building.”
When you read Krazit’s article, it reviews the savory and less savory ways that one’s reputation can be improved online or somewhat buried in the rankings lineup on search engines. And of course, some of the methods are not revealed because that is the secret sauce of these firms.
The founder of Reputation.com, Michael Fertik, defends people’s rights to put their best foot (face?) forward in his brash quote: ”Google is not God, it is not the First Amendment, and it’s not the truth. It’s probably the best machine of the last 10 years, but it’s just a machine.” I met Michael about two years ago because of our mutual interest in reputation. I am sure he said the same thing to me about Google at our first meeting. He has a good point. Just because something surfaces at the top of Google does not necessarily make it absolutely true or the last word on an issue or topic or person. I sincerely admire what Michael has built and the passion he puts into his business and people’s right to defend themselves when they have been wronged or privacy is invaded in harmful ways (they have a product for cyberbullying, MyChild). He has built a business from the ground up and I applaud that. I am glad that his business is doing so well.
Interestingly, the writer asked Google for its opinion on reputation management online and they forwarded the following comment:
Our goal is to help people find relevant information. So, we don’t condone reputation management campaigns that attempt to hide relevant information. While there is nothing in our guidelines that explicitly forbids reputation management, if we uncover link schemes or other violations, we reserve the right to take action in response. We are constantly working to improve our algorithms to ensure people find the most relevant information possible for their searches.
Ultimately, I agree with the author who at the end of the article concludes:
This will definitely continue to be a balancing act between those who want to be seen as the arbiters of what is relevant on the Web and those who want greater control of how their identity is presented to the world: for both good reasons and bad.
A survey on irritating buzzwords was forwarded to me last week and I was delighted that “online reputation management” was not among them although it made me wonder. In my narrow world, online reputation management seems to be ubiquitous and I use it alot. The last thing I would want to be called is bothersome. However, the analysis by an independent research group for The Creative Group looked at the” most annoying” industry buzzwords according to marketing and advertising executives. As you can only imagine, “social media” and “social networking” are at the top. I have to admit that I have used some of these words myself so I am not a complete innocent. However, I am now forewarned.
I noticed that 24/7 was mentioned (number 20) which made me recall the New York Times Public Editor’s article from yesterday that cited the paper’s dot com site’s assistant managing editor Jim Roberts who calls it the 1440/7 news cycle because there are 1,440 minutes every day, seven days a week with ”each one of those minutes demanding news for delivery to a networked world.” I think that Jim Roberts has it exactly right when it comes to filling the news demand.
25 Most Annoying Marketing Buzzwords
- “Social media/social networking”
- “ROI/return on investment”
- “Extra value/value added”
- “Social media expert”
- “Moving forward”
- “Going green”
- “Think out of the box”
- “Culture change”
- “End of the day”
- “The big idea”
It is hard not to think about the reputation that our country has as a civil nation when events like the tragic shootings in Arizona occur. I was on the phone with a colleague in London earlier this week and she exclaimed how horrific it was to watch the news about Arizona over the weekend. She said that it was on non-stop. [And yes, the young man who pulled the trigger was undoubtedly mentally insane and not just uncivil!]
For a second, I was taken about because I nearly thought of the killings as our secret and shame. However, I know that local is now global when it comes to news and once again, America’s reputation for uncivil behavior needs adjusting. Of course, every country has its moments of tragedy and loss of human life for no reason but the killings and near death of Representative Giffords made us all stop in our tracks and wonder where we are headed as a nation.
About six months ago, we surveyed Americans about civility in this country to determine whether it was in fact mounting in our national dialogue, homes, schools and online. The results were chilling and as expected — we have work to do. My hope is that we can calm the rhetoric and discuss civility around dinner tables for a long time to come and give our young people a true civics lesson. Perhaps when we revisit civility later this year, we will see a reckoning of sorts.
My ears perked up when I read this sentence in a New York Times oped by Frank Rich today. The column was about how Obama could take some lessons from the late President Reagan. Rich wrote: “His White House spokesman, Larry Speakes, was only half-joking when he deflected critics with the old saw ‘if you tell the same story five times, it’s true.’” I think the same is true with the Internet today. If you search and see the same story online five times, it’s true. Of course, a rumor can be repeated in several places and now lives forever. I just wonder if the magic number online is five times, one time or ten times in terms of making something believable and unforgettable. Hard to know in this day and age. All I know is that it is harder than ever to get your message heard but if it is negative, you have a greater chance to be listened to.
My ears perked up a second time as well. I was thinking about how the horrific events in Tucson, Arizona are being discussed in terms of the growing incivility in this nation. As you know, a man killed six people, injured more and shot U.S. representative Gabrielle Giffords in the head. We conducted a survey last spring on the topic of civility in this nation. After reviewing the results then, I thought to myself that there was no turning back to the good old days. A vast sizeable 72% said that civility has worsened over the past few years. Although this killing rampage was not caused by out-of-control political rhetoric but by the hand of a disturbed individual , it does make one think about how divisive our public square has become. Let’s see if the heated dialogue we have become accustomed to simmers down for good or just a little bit.
Scorecards are part of our day-to-day business in building reputation. At Weber Shandwick, we are expert in identifying the right rankings, scorecards, league tables (whatever you might call them) for companies and their leaders. It makes perfect sense to me that vying for the best rankings helps boost reputation. It is but one way to spread the word that your company is worthy of what it is doing. Of course, if you dig too deep in some of them, you discover flaws. We recently advised a company against issuing a press release on a survey that had fewer than 50 respondents because of its limited sample size and lack of representation. Sometimes you just have to rise above it.
Well, companies are not the only ones to compete for these honors. Countries have caught on as well according to an article I just read. “With investment scarce and jobs even scarcer, countries that sparkle in global league tables can send a powerful signal to investors.” Countries are in a race to the top of the World Competitivness Index published by IMD, the business school, or the World Bank’s “Doing Business” league tables. Saudi Arabia just made it to the near top (11th place) from 55th place one year ago and Rwanda has moved up from the very very bottom to a more respectable showing. These accolades can go far in convincing investors that a country is business-friendly and investor-worthy.
Turning to company awards, I often talk about rankings fatigue and this article on airline awards in the WSJ nailed it. As it said, “The travel world is overbooked with awards these days, with some two dozen organizations around the world giving out annual awards for the ‘best.’ Each has different selection criteria, different funding and different judging, so they end up with different results.” That’s alot of applications to fill out and data to provide. This leads me to think that there should be a new corporate title in 2011 — Chief Rankings Officer.
Came across an interesting statement about CEOs this morning. It was in a Justmeans blog post about how CSR needs to get more humanized, meaning making a stronger link between the CSR director or manager with a company’s CSR initiatives and thereby giving it a face. The author Akhila Vijayaraghavan wrote:
This year will see the beginning of a shift from CSR itself to the CSR practitioner. Just like brand image is beginning to collate itself with CEO image, so will CSR with the CSR practitioner/manager. I believe this could be an important trend because putting a ‘face’ on CSR makes it not so ‘corporate’. CSR practitioners deal with far-reaching environmental, social and ethical issues on a daily basis that are profoundly human. Taking the corporate out of CSR will bring to the spotlight of what the people in businesses are really capable of . This is a good thing not just for CSR but also CSR practitioners.
As a long-time CEO reputation watcher and if I understand what she meant in her post (people often speak about brand and corporate reputation/image in the same breath), brands — not just corporations — will increasingly be linked with CEOs. For many years, the research I did found that nearly one half of a company’s reputation was tied to that of its CEO. However, the reputation of the brand was not as tightly correlated until the Internet came along and changed the game. Now that anyone anywhere can find out the parent company of a brand and also who its CEO is, that is most probably changing. And I expect it will change quickly.