Not a surprise. Today I read that maybe we need more CEOs like the new CEO of Citicorp who has a very low public profile. He is practically nameless according to the article. Barely noticed in the trendiest restaurant where banking moguls hang out for lunch. I probably could have predicted this. The headline reads, “Quiet Boss at Citigroup Setting Tone for Wall Street.” And as predictable, those CEOs who are in the news for good and bad reasons are being shunned for having a public profile when I am sure they’d prefer to under everyone’s radar screens too. The next time around we will be hearing that this low, quiet profile that Citigroup’s CEO now has is what got him into trouble when times get stickier. It seems like it is either too much or too little visibility and nowhere in between when it comes to CEO visibility and presence. Let’s see what the new year brings on this topic of neverending interest when it comes to CEOs. I think the common saying is, “Damned if you do, damned if you don’t”, which according to Wikipedia is described as having “two equally repulsive choices, neither of which results in a positive outcome.” I think that is exactly it — pros and cons and little in between to having any public profile for your company.
A new study is out that shows that companies that engage in socially responsible behavior are also more likely to engage in socially irresponsible behavior. And the research found this to be fairly common among Fortune 500 company CEOs who work hard at setting a highly moral image and identity. How could that be? The paper, “License to Ill: The Effects of Corporate Social Responsibility and CEO Moral Identity on Corporate Irresponsibility,” was co-written by professors at London Business School and University of California, Riverside School of Business Administration. The author-researchers found that for approximately every five positive actions that a firm takes, it gives them license to commit one negative action. As one of the co-authors says, “These findings show that CEOs should be aware of this tendency so that they can prevent their companies from slipping into this pattern. Additionally, corporate boards can’t allow CEOs to rest on their laurels. They need to be vigilant in monitoring CEOs.” Good advice. They held up BP and Enron as examples of companies that proclaimed high corporate social responsibility (i.e., beyond petroleum and all the philanthropy engaged in by Enron’s Ken Lay) and yet transgressed.
You might be scratching your head. It is hard to understand how this could be. The research which is pretty impressive found that leaders who direct their company’s CSR strategy end up with “moral credits.” These moral credits blind them to irresponsible behavior and being less vigilant about how they manage stakeholder needs. And this goes for employees too who also tend to internalize the prior ethical CSR image of their employers and feel that they too are untouchable when committing unethical behavior.
The best part of the article or at least one of the many best parts is how they use the term CSiR for corporate social irresponsibility. It’s a new term to me and one I will use again and again.
Someone recently said something to me that had me thinking. They were describing a CEO and said that they were amazed how willing he was to show his vulnerabilities. Leadership humility is very attractive these days because so many CEOs and leaders are being cut down to size as events careen out of control around them. A recent article in the Guardian echoed this same sentiment although the writer, Lynnette McIntire, referred to this trait as “humanity,” not humility. She says: “But the most persuasive CEOs are those who show how their personalities, histories, values and feelings are aligned with company culture. I have been charmed and disarmed when CEOs talk about what they’ve learned from their children, how a mentor changed their lives, how a hard lesson from life knocked them into gear or how a frank comment by an employee reset a decision.” McIntire struck a chord with the examples she gave. One was about Tom’s Shoes which has a business model of “buy one, give one” whereby a free pair is given to children in need when a customer buys a pair. She pointed out how the CEO, Blake Mycoskie, spoke about how unprepared he was for the criticism the company received about providing free shoes. People were criticizing how this policy was hurting local shoe producers. Tom’s Shoes is now committing to having a proportion of these giving shoes made in Haiti. She also wrote: “Now, Tom’s giveaway programs have a shoe replacement component, dispelling the in-and-out charitable giving image. For many children having black shoes – a school uniform requirement – means their education is not interrupted when their feet grow.” All very interesting to me because I did not realize that Tom’s Shoes’ reputation was being bruised by these criticisms. But also how the CEO listened, learned and began reshaping policy. And how the entire lesson made the CEO appear more human,vulnerable and teachable.
[I should add that I also was pleased that they quoted our research on CEO reputation.]
Glassdoor just released their most popular CEOs list for 2013. They selected CEOs who had at least 100 ratings from 2/15/12 to 2/24/13 and at least 40 ratings from the year before. Mark Zuckerberg of Facebook had the highest rating with a 99% approval rating. He was basically tied with the duo SAP CEOs –nBill McDermott and Jim Hagemann Snabe. Of the top 50 CEOs, only one woman made this year’s list — Victoria Secret’s Sharen Turney. Of course, you had to have at least 100 employees rating you so that defined whether you were considered or not but 49 men made the list. Last year, Glassdoor listed the top 25 most popular CEOs among employees and only one woman made the list, Meg Whitman of HP. Let’s hope that next year we see some more women being nominated (two?) but considering how few female CEOs there are, that’s a hard ask.
When I travel to speak in different countries , I spend a good deal of time investigating the reputation of the country I am traveling to and any recent reputational problems they are experiencing. I always want to know what the biggest business scandal, best example of a reputation recovery and what were the most widely covered social media assaults on a business. I usually get asked to comment on these types of questions one way or another during a media interview or in a Q&A session and I like to be prepared.
On my last trip, I was all prepared to talk about Turkey’s issues with the protests in Gezi Park. But everywhere I turned, I was also asked what I thought about the reputation of the United States in light of the government shutdown? Did I think its reputation was being harmed? I have to say that I was somewhat startled by the question because I am always so focused on the country that I am visiting that I forget that it goes both ways. But this time, I realized without any doubt that the reputation of America was being seriously damaged abroad by the incivility and absurdity of the standoff. It felt awful.
This week, we saw something I have posted about before….how companies are increasingly becoming involved in political issues, sometimes against their own will. And this week we saw first hand another form of Starbucks Diplomacy. The CEO of Starbucks, Howard Schultz, posted a note on his company website deploring the shutdown — “Please join me in pleading for civility and a respectful, honest discourse among politicians to bring a solution to the current stalemate.” And today, another note about Americans coming together for the collective good and signing a petition demanding that Congress put an end to the shutdown. Since I really want to get our reputation back on track, I’m all for this.
It has been a crazy few weeks — traveling to Berlin, San Francisco and Istanbul. But I am back in the USA. So here are a few observations about things I’ve read and learned that I wanted to share:
1. Deloitte Touche Tohmatsu just issued a new report on reputation risk. Reputation risk was the top strategic risk among 300 global C-suite executives surveyed. The survey found 40% of respondents listed reputation as their top risk concern today, with their business model second at 32% and economic trends/competition third at 27%. In 2010, reputation risk was at 26% so we can see that it has moved to the very top of the C-suite agenda. Henry Ristuccia, global leader of governance, risk and compliance at Deloitte had this to say (love this quote): “Reputation risk is going to always be the meta of all risks…how you manage the underlying factors that could affect the organization’s reputation or brand…how resilient are the people, the culture?” The meta of all risks!
2. In Istanbul, I spoke about Reputation Warfare, the theme of my Harvard Business Review article. The occasion was the 2nd International Reputation Management Conference at Kadir Has University. It was very impressive because there are not many reputation management conferences in this world (Reputation Institute holds one annually) and here I was in Istanbul. Very forward-looking of the university. The summer protests in Turkey at Gezi Park was an interesting backdrop to my discussion on using social media as an opportunity to defend one’s reputation in addition to the risk. Additionally, there was discussion about how the protests had affected the reputation of the country. Tourism took a hit in July but from the looks of it, it was pretty healthy this week. I am going to keep a watch out for how Turkey repairs its reputation and what types of reputation recovery strategies are employed. All very interesting and doable. I also experienced some of the Turkish hospitality that they are so well-known for.
3. Just this past week, I read two articles on how Goldman Sachs and JPMorgan are repairing their reputations. All in one week. Clearly this is a topic that has grown exponentially and particularly in the financial sector. The Economist article on Goldman Sachs was fascinating because it described the scenario setting that is being used to train vice presidents to better understand their responsibilities to the firm when faced with ambiguous and complex challenges to doing business today. The case study is preceded by a film that is described this way: “…an emotive documentary on the history of Goldman Sachs, filled with interviews of luminaries and former executives, each hammering home the virtues that supposedly make the firm distinctive—teamwork, personal accountability and the legendary exhortation by Gus Levy, a former leader of the firm, to be ‘long-term greedy’, by which he meant it should forgo short-term profits if they came at the expense of client relationships.” I mentioned in a previous post how Goldman Sachs is super-engaging in training which included their CEO from the start. In addition, incentives have been revampedd and tied more to collaboration and teamwork. The WSJ article on JPMorgan’s CEO Jamie Dimon focuses on how he is converying “business as usual” as he faces an imminent federal lawsuit, another revealing reputation recovery strategy. He has been touring midsize cities such as Cleveland, Oklahoma City and St. Louis meeting with local businesses and community leaders that are supported by JPMorgan’s philantrophy. According to the article, Dimon’s message are fine-tuned, upbeat and focused on the customer.
I was delighted to learn yesterday that The Holmes Report included me in its list of 25 Top PR Innovators. This new listing, the In2 Innovator 25, calls attention to the importance of innovation and ideas in the public relations field. The 25 of us were honored for breaking boundaries, challenging the industry and pushing PR onto the wider stage that it so deserves. Not bad.
One of the questions Holmes asked in a mini-survey of the Innovators was “Who most influences a brand’s PR/marketing innovations?” The top influences were CMO, receiving 10 votes, and CEO, which received 6 votes. I answered CEO. In my world, the CEO sets the guardrails for and shapes the corporate culture that allows ideas and experimentation to ferment and that also allows fear of failure to fade away. Without such a culture, imagination and risk-taking would never have enough air to breath so as to grow and flourish.
During my career I have benefited from just such an expanse of breathing space. My former agency CEO Chris Komisarjevsky encouraged me to ideate when I began one of my first research projects on CEO reputation. Today at Weber Shandwick, I have had the full support and encouragement of our CEO, Andy Polansky. Without Andy’s support, without the amazingly collaborative culture that he has fostered, I would have found it nearly impossible to think divergently and follow my instincts. I am fortunate and grateful that my boss and my colleagues have created an accepting, nurturing environment for ideas. My thanks to you all.
Love this quote from the Oxford Metrica/Aon 2012 Reputation Review and it applies not only to corporate communications but to CEO communications. A good CEO narrative can make all the difference to reputation:
“Communications that strengthen reputation are far more valuable than is recognised. We can make companies worth hundreds of millions more simply by making them better understood.”
When I first heard this story last weekend about AOL CEO Tim Armstrong publically firing the Patch creative director on a conference call, I was not sure what to think. It was quite the uncivil thing to do. At Weber Shandwick, we had just released our annual survey on Civility in America and I was troubled by the finding that one in four Americans (26%) had quit their jobs because of an uncivil workplace. This figure was higher than it was in 2010 (20%). When I heard that the public firing before 1,000 people was recorded and leaked to a web site, making its way across the world wide web, I thought that too was uncivil. All in all, not good news for Armstrong’s reputation.
I was wondering how this would all shake out or when an apology or statement would come from above and here it is. Unfortunately, the reputation of the workplace is highly impacted by the actions of the CEO and especially by how a CEO behaves during tough times which Patch is experiencing as they prepare for layoffs at the end of this week. His taking responsibility, regardless of the situation, and acknowledging his accountability was the right thing to do to bring some equilibrium back to the situation. You cannot explain away incivilty when it comes to CEO leadership because most people will regard it as just an excuse. Therefore, Armstrong’s apology does not dwell too much on why he fired Lenz the way he did. Since apologies are increasingly common among CEOs and leaders, I thought I would post below in case anyone is looking for an example in the weeks and months to come.
I am writing you to acknowledge the mistake I made last Friday during the Patch all-hands meeting when I publicly fired Abel Lenz. It was an emotional response at the start of a difficult discussion dealing with many people’s careers and livelihoods. I am the CEO and leader of the organization, and I take that responsibility seriously. We talk a lot about accountability and I am accountable for the way I handled the situation, and at a human level it was unfair to Abel. I’ve communicated to him directly and apologized for the way the matter was handled at the meeting.
My action was driven by the desire to openly communicate with over a thousand Patch employees across the U.S. The meeting on Friday was the second all-hands we had run that week and people came to Friday’s meeting knowing we would be openly discussing some of the potential changes needed at Patch. As you know, I am a firm believer in open meetings, open Q&A, and this level of transparency requires trust across AOL. Internal meetings of a confidential nature should not be filmed or recorded so that our employees can feel free to discuss all topics openly. Abel had been told previously not to record a confidential meeting, and he repeated that behavior on Friday, which drove my actions.
We have been through many difficult situations in turning around AOL and I have done my best to make the best decisions in the long-term interest of the employees and the company. On Friday I acted too quickly and I learned a tremendous lesson and I wanted you to hear that directly from me.
We have tough decisions and work to do on Patch, but we’re doing them thoughtfully and as openly as we can. At AOL, we had strong earnings last week and we’re adding one of the best companies in the world to the team. AOL is in a great position, and we’ll keep moving forward.
The pendulum is always swinging when it comes to CEO reputation. All of a sudden, there’s more frequent discussion about empathy, humility and the softer side of things. I have mentioned this trend a few times already. Today there’s an article in the WSJ about a new crop of boring CEOs in the financial sector. Boring with a small “b.” Underneath it all is the desire for boards to hire CEOs that sport no controversy by how they behave. These boring CEOs don’t necessarily command big bonuses (one CEO refused bonuses til 2015). They give eye-rolling, yawn-inducing presentations, focus on words such as integrity and stewardship, work well with regulators and are employee motivators behind the scenes.I bet that they also focus primarily on their company reputation and less on their own reputation. I liked the example given of how one CEO had to play CEO-for-the-day as a final test. “The candidate had to give a webcast presentation and get ambushed by actors dressed as television journalists, among other tests.” The article ended with a warning of what we can expect from our future CEOs: “Boring is the new black.” I give it three years and we’ll be back to the charismatic CEO winning the day. Maybe not.