Archive for November, 2012

Another reason for why CEOs matter. Today’s story in the WSJ focused on how investors are increasingly demanding CEO face time in order to get greater insights into the company’s strategy and future and determine whether it is worth their investment to take a stake. One of the CEOs complained said that meeting with investors and analysts is taking up too much time. This should not come as such a surprise. The job of CEOs today is not to only run the business but be that communicator-in-chief with its portfolio of stakeholders which I grant is expanding by the year. The article seems to point out that these meetings are getting more granular than the larger-sized ones of years past and taking up more and more time. One CEO says he meets groups of 50 investors in batches, one after another, or in private 30 minute sessions.

The article provides a few interesting stats on the pressure on CEOs to make time for investors…

• C-suite executives in North America attended 70% of private investor meetings over the past 12 months, up from 64% one year earlier.
• CEOs and finance chiefs spent 14 days and 17 days, respectively, on these meetings.

The article provides many different reasons for why meeting the CEO is important but one that wrapped it all up for me was when a president of Fidelity Investments said that meeting the CEO provided “nuances” about the company that does not come through in an earnings call and helped him “put the entire mosaic together.” I thought that the “mosaic” idea was useful in understanding what role the CEO and his or her reputation does actually play. Although the CEO is just one part of the picture or mosaic in this case, the CEO’s leadership, transparency and credibility helps  glue together the partial perceptions of a company we all have and fit them into a pattern that yields a reputation. Getting to meet the CEO and gauge his or her character through the whites of his/her eyes is a critical piece to the puzzle of reputation that adds to a valuation about a firm’s future performance. After all, isn’t that part of the CEO job description today — to balance the external and internal?

Lessons on dealing with a crisis are always helpful, especially when your company’s reputation is in jeopardy. I found this list particularly worthwhile because it was written by Sallie Krawcheck, one of the most senior women on Wall Street. I heard her speak at a Forbes conference years ago and really enjoyed her tales of juggling work, family and husband. She was very down-to-earth, approachable and humble. She recently wrote on her LinkedIn page about the lessons she learned from leading through various crises and as she says, watching others make career-ending mistakes handling crises. Here is a brief synopsis of what she advises:

1. Be heroically available. I wholeheartedly agree with her that there are times when executives wish they could just close the door and wait until a crisis fades. We all also know that this strategy does not work and rarely happens. She mentions a colleague who hosted a call for Financial Advisors when investments had gone south and how he said he’d stay on the call until every last question was answered which lasted late into the evening.

2. Allow people to ask real questions, even if you don’t want to hear them. We have all been in meetings when no one wants to ask the hard question and most people just throw softballs. Leaders have to create an environment where the hard questions can be asked and there are no repercussions. Sometimes I advise a leader to ask the question himself, provide the answer and get on with it. Once the question is asked, others might have the courage to speak.

3. Frequency matters more than perfection. Krawcheck mentions how her management team had a call at the start and end of every day when the economy was tanking a few years ago. She says that some of the calls were not all that good and packed with answers but at least everyone knew they would be getting an update on a regular basis.

4. On your message: Repeat it, repeat it, repeat it. And do in different media. That is dear to my heart because those of us in public relations understand that to reach people who need certain information, you have to reach them where they are. And they are often not where you think they are. Some people read company emails, some ignore them. And as Krawcheck says, some people are readers and some are listeners. Some are in facilities where there is no easy access to electronic information. Make it easy to find out what needs to be known.

5. Bring in people who know more than you do or provide a different perspective. I found this one unusual since so many companies keep all their information and goings-on close to the vest. And rarely do they want to admit that they might not know something. She mentions how during the recent downturn, her company brought in some experts to bring a new voice into the conversation even if they were saying the same thing she was saying. This is good counsel.

6. Let them see you sweat, but don’t let them see you tremble. Another piece of good advice and a good way to end this post. It is okay to work super hard and show that you are not home for dinner with the family night after night when crisis is on your doorstep but make sure that your team does not see you scared. Being confident “goes a long way.” Yes indeed.

I wanted to include this wonderful ode to being thankful on my blog. I was on my way to work earlier this week and was reading the Science section of the NYT. I had just read two articles about cancer — whether chemo works and another about a young woman with ovarian cancer. I was definitely feeling down when I came across this article which just brightened my day. So sharing it here too! Happy thanksgiving.

 A Little Perspective Can Open Eyes

By JOE SHARKEY

It is November and I remembered that the World’s Best Multinational Companies to Work For list must be out. I went to the Great Place to Work Institute and there it was. The list was released last week. I have to say that between Hurricane Sandy, the election and the Noreaster we had in New York, we lost two entire weeks to chaos. So I must have missed the awards announcement on November 12th.

To make it to this premier ranking is not easy. Companies have to meet the following criteria — chosen from 350 companies, appeared on at least five national Best Workplace lists, have at least 5,000 employees worldwide and have at least 40% of the workplace based outside the home country.

Some of the amazing facts about these companies are:

• On average, returning companies on the World’s Best Workplaces list increased their revenue by 9% this year.
• Over the past 12 months, these 25 companies created 120,000 new jobs globally.
• Furthermore, voluntary turnover at 15 of the 25 companies was at 8 percent per annum, compared with the all industry average in the United States of 9.1%, according to CompData Service.
• Country with the most companies on the list — Mexico.
• Average number of national list recognition awards — nine
• Percent of women in executive/senior positions — 27%
• Greatest improvement in Trust Index — work/life balance, professional development
• Region with the most companies on the list — Europe
• Most represented industry on list — Manufacturing and Production

The reputation of the companies on the list are all stellar. I am, however, trying to understand why the logo of this award uses a dinner plate. Or am I being too literal? Perhaps it is the dinner plate from a white-tie dinner. You think?

In an article today on the academic dream team that consulted with President Obama’s team, a few lessons are shared that should be helpful for the public sector and CEOs or other executives. The group of behavioral scientists who were unpaid advised that voters focus on two characteristics in choosing a president or leader – competence and warmth. This is especially good advice for new CEOs coming into office to hear. The article states that Romney had the competence factor working for him but less so the emotional warmth factor, particularly with all the negative advertising that many people saw. Clearly, CEOs have to project both factors to gain support from their followers.

Another lesson to be learned that was shared in the article is useful for companies facing crises (who isn’t?). The social scientists that made up the dream team advised the Democrats running the Obama campaign that when it comes to neutralizing rumors, it is best not to deny the charge but to affirm a competing one. The example given was how the rumors about President Obama being a Muslim stuck over the long term but their advice (and probably well taken) was to counteract that rumor by asserting that Obama is a Christian. I do recall hearing that. Good advice that can apply to corporate leaders faced with hearsay and wanting to deflect innuendos.

Have you ever wondered if your company and spokesperson can repair its reputation by responding online to criticism? I have.

Despite the fact that many Internet-based companies such as Amazon, Yelp and TripAdvisor let companies respond to critics on their sites, most companies do not engage because there is scant research telling them if it works. That is where researchers at the University of Amsterdam come in. Their results were cited in strategy + business – thank you to Guda van Noort and Lotte M. Willemsen who filled the reputation void by doing this research. They looked at what happens when a company responds to a customer’s negative commentary to a blog post. They looked at company response in three ways — whether the company responded when the customer asked for a response, whether the company responded when no formal request from the customer was made and third, when the company responds not at all.

The short answer to the question of whether companies should repsond and manage damage control online is quite simple. They should, but carefully.

1. Consumers judge a company more favorably when a company responds than if it does not respond. Silence is not always a virtue. Reputations are built on engaging with customers. Of course, it always comes down to when and how and if you are invited.

2. Companies should respond online to customers when asked to do so. That lends favorability to a company’s reputation. All I can think of right now, however, as I write this is how LIPA (the power authority) on Long Island poorly communicated to customer complaints after Hurricane Sandy and especially to those begging for answers online. A woman who works with me wrote about 20 tweets per day to find out when her home would get power and no one ever responded. They were without power for at least 13 days and they live across the street from LIPA!

3. Company reputation is hurt when companies respond uninvited to criticism on consumer-controlled mediums such as Twitter, Facebook or a non-corporate blog. These types of approaches are viewed as intrusive. Company spokespeople have to be careful where they respond and be extra careful if they are not invited.

4. Personalizing company responses is helpful. Company spokespeople should use their names but not necessarily their titles which can appear standoffish. “When companies — in an effort to underscore the seriousness of their commitment to customer service — insist that their representatives use only official titles, they may wind up putting people off.”

Skins International Trading, maker of compression bodysuits for professional athletes, is suing the Union Cycliste International organization for harm to its brand reputation. They are saying that the UCI did not take the doping charges leveled at Lance Armstrong seriously enough and thereby tarnished the reputation of the sport and the brands that support the sport. This is a good example of how an individual with a damaged reputation can have a negative ripple effect on individual brands, events and sponsors that practically cripples an industry. Only time will tell how this ends. Hopefully a new generation of cyclists will emerge to remove the stain left by Armstrong.

I attended a Council of PR Firms Critical Issues Forum about one week ago. However, I can now only think in terms of PHS (pre-Hurricane Sandy) and PostHS.  It feels like the world has been turned upside down since life has not yet to normal. My neighborhood is basically fine (meaning we have power) but everything seems different in some indescribable way. Since I cannot get to the office, I have been working at home. We will see what Monday brings.

I wanted to write about the survey that Harris Interactive did with the Council on the connection between brand and corporate reputation. This topic was the theme of the forum. As you know, this is a subject we at Weber Shandwick also know well — take a look at our report on The Company Behind the Brand: In Reputation We Trust.  The Harris Interactive study analyzed results from several of their own studies (50,000 consumers) and VP Robert Fronk concluded: “Marketers might profitably think of themselves as operating in the corporate reputation business, while corporate communicators might think of themselves as operating more deeply in the product marketing business.” As we also found, brand and corporate reputation are now indivisible. The Harris Interactive analysis looked at three industries — auto, B2B and Food/Beverage. It is worth looking at their brochure, Hidden Harmony, which I highlighted above because it shows what drives purchase consideration and recommendation. To give you a taste, below are the drivers of purchase consideration for the auto industry. I was fascinated by the importance given by consumers of how employees are treated when it comes to perceptions of reputation in the auto industry. And no surprise that trust is high on the list for both brand and reputation. Brand consideration appears to be very me-centric (how it fits with my own image, seeing it everywhere, brand is exciting). For reputation, in constrast, the drivers are very company-centric. They are different but when strengthened together, they are a powerful punch. They should not be siloed.