Archive for December, 2011
Because I am off from work for the holiday, I have a little time to catch up on things I meant to read in the months before. I was particularly interested in some research on CEO transitions and its impact on the value of the enterprise conducted by FTI. A few facts jumped out at me from their study among the financial community. They found that one-third (32%) of investor decisions are impacted by the reputation of the CEO. Moreover, the reputation of the CEO was more important to investors than the reputation of the company’s products and services.
The research covers the value at risk depending on what type of CEO transition occurred. The greatest risk to the enterprise is when a CEO is forced to resign.
Because of my work on CEO tenures and how to build CEO reputation, the findings confirm my own research over the years that CEOs need to show success by that 12 month marker. FIT found that investors give new CEOs about six months to assess the challenges and opportunities facing the company, setting a vision and strategy. They give new CEOs more leeway to improve market performance and valuation — about 12 months. After the first year, all engines need to be firing.
Another particularly interesting finding was what investors look at in their first 100 days to further establish the CEOs credibility in their eyes….here is what they said was of “significant importance.” Despite the ranking for “charisma,” it is still interesting that it is still estimated to be of high importance and only 16% said it was of limited importance. FTI concludes that investors take a multi-dimensional view of new CEOs. They expect to see it all.
|During First 100 Days Of A New CEO||“Significant importance”|
|Grasp of the company’s challenges and opportunities||96%|
|Knowledge of/experience with industry dynamics||92|
|A strategic plan||88|
The other day I received this note in my email inbox. It is a handsome note from CEO Millard (Mickey) Drexler at J.Crew thanking me for my purchases over the past year. The text is below. It is beautifully designed. But I wanted to point it out because it certainly is a nice touch to add to J. Crew’s reputation….thanking customers. I am not a big customer. The note to all customers shows a lot of class and humanity. Here’s the text if you have trouble reading the pix.
We know there are a lot of choices when it comes to where
you shop, so on behalf of the entire team, I want to personally
thank you for being a J.Crew customer. As we head into 2012,
our most important mission continues to be providing you with
the very best in design, quality and service. We look forward
to seeing you in the new year.
If there is anything we can ever do better, please don’t hesitate
to let us know: firstname.lastname@example.org.
WISHING YOU A VERY HAPPY HOLIDAY.
The new year is fast coming up. I put together my thoughts on reputation trends to expect in 2012. It is on the HuffingtonPost site. Take a look and let me know what you think. Happy pre-Xmas day.
I went to the Thesaurus today to get a sense of synonyms and antonyms for “reputation.” I was just curious. They are listed below. I thought it was interesting that the word “image” was not a top synonym for reputation. Perhaps it is an old-time word that is not used much these days. I also was surprised that “credibility” was not among the selected few. However, some standbys such as esteem, trustworthiness and character are there. As an antonym, the word “disreputableness” does not exactly roll off one’s tongue.
The note about reputation is not terribly illuminating. I agree that reputation is how you are perceived by others but I think that reputation shines a light on a company’s or individual’s reputation and reveals how they are perceived. Not sure I get the distinction. Reputation is character. Either way, how you behave reflects on reputation.
I love the voice when you click on the megaphone.
reputation [rep-yuh-tey-shuhn] Show IPA
|Part of Speech:||noun|
|Definition:||commonly held opinion of person’s character|
|Synonyms:||acceptability, account, approval, authority,character, credit, dependability, distinction,eminence, esteem, estimation,|
|Notes:||character is what one is; reputation is what one is thought to be by others|
|Antonyms:||disreputableness, ill repute, notoriety|
Employee communications will undoubtedly be the hot topic of the next few years, especially in the reputation space. As leaders come to terms with the fact that employees can be their best advocates and worst badvocates, internal communications will rise to a new level. That’s a good thing because I think leader-to-employee communications is more immature than the art and science of external communications. With all the technology we have, you’d think that employee communications would be more advanced. But it is not. Research by Dov Seidman and the Boston Research Group surveyed thousands of employees at all levels. One of the more startling findings was that 27% of bosses think that employees are inspired by their firm, when in fact only 4% of employees agree. And 41% of bosses say their firms award people based on values rather than financial performance. Only 14% of employees agree. Bosses have much to do to get employees inspired and willing to go the distance to make their firms successful and a place others want to work at. Talent, leadership and culture are drivers of reputation. Time to inspire before it is too late.
You’ve heard this statement before. “What you spend years building, someone can destroy overnight.” I have probably written this several times on this blog when talking about crisis and reputation risk and I certainly wrote something very close in my book on reputation recovery. Well today it was cited in an article about GM‘s former CEO Rick Wagoner. The article was about his graduation speech made at Virginia Commonwealth University. A short 12 minute speech about “taking risks and accepting defeat gracefully.” He has been silent for over three years. Talk about grace. But in his closing lines, he made the statement about building and losing reputation which Mother Teresa apparently said (I did not know and am glad to have learned the origin of this statement). And he added his own two cents at the end to this famous piece of advice about reputation. He said “Build anyway.” A good reminder to those who wonder if being CEO is worth it or leading a country, I might add.
I met Howard Schultz at a luncheon years ago when I was at Fortune. His company was pretty much in its infancy and we talked about Brooklyn. Needless to say, he’s a great one to follow when it comes to reputation-building, engagement and reputation recovery. In an article I read about him recently where he was named businessperson of the year, Bill Bradley, the senator, basketball star and board member of the coffee company, noted how reputation was central to their success. Bradley said, “You don’t get millions to support your social networks just by selling coffee. People have to admire the company.”
I have been pretty enamored by Schultz’s political action where you can buy an American-made Indivisible wristband in the stores as a thank you when you donate to the Create Jobs for USA Fund. Last week I bought one in our local Starbucks because if my $5 can make a difference for even one person, I’m in.
As I may have mentioned before, I also met the head of Starbuck’s Ethics & Compliance several months ago at a meeting and was impressed by his thoughtfulness and mission. And a young woman I have mentored for many years and is now working her way through college works at a Starbucks in midtown. She adores it and it has introduced her a decent job that has influenced her interest in majoring in business.
There have been many touchpoints with the brand over the years and they all seem to add up. Just like the wristband says, reputation is indivisible. The whole is greater than the parts but the parts, the touchpoints, can all add up to a halo-like shield that makes a company’s reputation harder to destroy and easier to admire. That’s reputation at its best. It takes years to build and many bumps along the way. But when it gels, it is a wondrous thing to admire.
Yesterday’s oped by Maureen Dowd in The New York Times got me thinking about how much harder it is to build reputation in this shout-marketing world. Her column was about the loss of silence which was a pleasant surprise because I was not in the mood to read about politics. She quotes Ed Schlossberg of ESI who said, “Paying attention to anything will be the missing commodity in future life. You think you’ll miss nothing, but you’ll probably miss everything.” When everything and everyone seems to be talking, it is hard to make sense of it all.
Reputation building has reached that tipping point I fear. There are so many messages being distributed through so many channels that only bad or sensational news are getting through. Now I know that is an exaggeration. But it seems sometimes that the best way to get my attention is to tell me something awful that has happened and who it happened to (meaning which company or CEO).
Today I was on the subway on my way to work and two young men were talking about MFGlobal and Jon Corzine. Then I looked at the woman next to me and she was reading the Wall Street Journal about Olympus’s problems. Of course, someone was doing the crossword puzzle and another was reading their Kindle. Another person had a shopping bag with Macy’s logo on it and I was thinking about JCPenny teaming up with Martha Stewart. What about Macy’s? And all along, here I was thinking about how a company can break through and be liked enough.
Dowd’s column struck me hard. Silence is golden.
There has been a fair amount of news this year about people who risk everything and ultimately lose their whole reputation. Why would anyone take that risk? An article on “What makes a rogue trader?” made me think about people who take risks without realizing that they have so much to lose. Also the news today about Illinois Governor Rod Blagojevich being sentenced to 14 years in jail for corruption made me wonder what drove him to this pitiful situation. Money? Power? Just because he could do it. Interestingly, the article posits one theory….”What matters most of all is not how much a gamble alters their wealth, but where they start –whether they are already satisfied, or have suffered loss. Their overriding trait is their inability to accept loss.” Thus, these people are compelled to do whatever they have to in the name of gaining more wealth or achieving political office to avoid loss of their stature or status or sense that they are okay human beings. The loss seems to always outweigh what they sought in the first place. And these risk-takers lose all remnants of reputation and respect in the end. Something that you can’t even put a price on. Makes you think about Bernie Madoff. What was he thinking? His reputation is in shreds, at best.
23 Tips on Bed Bug Eradication, Cleansing and Reputation Recovery. I thought it was a mistake. I could not figure out what reputation recovery had to do with bed bugs. In fact, it gave me the creeps. I figured it was one of those online snafus where words get mixed up with lots of symbols #)@++&&& or something like that. I was wrong. In fact, it was an article on eradicating bed bugs and the site was referencing some wisdom from my book. Here is a snippet from it below. I never thought I gave out buggy advice but maybe I was wrong.
Did you know it can take up to 3 years to gain back the trust of your customers? Below are some thoughts offered from the book Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation. “The best steps to beginning the reputation recovery process range from having the CEO announce specific actions the company will take to respond to the problem, tireless communications through a wide variety of external and internal channels and a comprehensive re-examination of company culture and its commitment to corporate responsibility. A recovery strategy that continues to grow in importance…is the use of the corporate website to relay information, progress and updates about company actions.”
There’s more but I’m sure you get the idea. The GM for the hotel must step forward and take full responsibility for the issue and communicate, communicate, communicate.
As you can see, bed bugs are a nuisance that cannot be ignored. If you walk away with anything from this series, it should be the knowledge that regular proactive inspections are imperative. As I always state at the end of my articles, addressing the subjects I discuss will increase your revenue, improve your scores or decrease expenses. Being proactive in your bed bug management will in the long run benefit all three areas. Good luck and let me know how you do.