Leadership

Years ago at my former job, the research we did caught fire due to one simple finding. In fact, I used to think of myself as the 50 percent woman. Our research on CEO reputation revealed that 50 percent of a company's reputation was attributable to the CEO. For some reason, this one simple factoid traveled around the world like wild fire. People just found it incredibly memorable. Part of the reason that the "50%" was so radioactive was because CEOs had became better known (Jeff Bezos, Steve Jobs, John Chambers, Jack Welch, Bill Gates, Carly Fiorina) and no one had really asked the question. Reputation as a body of knowledge was still nascent (not like it is now) but it was just about to tip. And tip it did. In our new survey on the corporate brand, we asked the question again.  It's been about 10 years since that earlier study. And despite all the ups and downs in the stock market, CEO compensation issues, scandals, Occupy Wall Street, celebrity CEOs, the Internet, etc etc, the executives in our study reported that 49% of a company's reputation is due to the CEO's reputation. As interesting, when we asked consumers -- the general public -- 66% say that their perceptions of top leadership also affect their opinions of company reputations a great deal to a moderate degree. Only 7% say that there is no link between the two.  So CEO reputations arenot going over their heads whatsoever. Thus as much as it might be politically incorrect to admit that the reputation of the CEO plays a significant role in how companies are viewed, it does. Of course, product quality matters most but leadership from the top, how they behave and what they communicate is not to be ignored. A large 59% of consumers cite leadership communications as influencing company perceptions. It no longer pays to be silent.

Another exciting day (despite the clouds and threatening rain here in NY). Weber Shandwick's research was covered in today's WSJ. B8. In the print edition. Can't send you a link (although here is one if you can get in) to the online version since you have to subscribe! But you can get all the relevant info here from the press release and the executive summary. Back at the beginning of the year, we released a terrific study (I really feel an affinity for this one) about the growing indivisibility of reputation and product brand. We had so much great data that we figured we would release at intervals. So here we are with the second installment of the global research, The Company behind the Brand: In Reputation We Trust – CEO Spotlight which explores the importance of executive leadership and communications to helping reverse the tides of waning trust in companies and solidify reputation. Here are some big learnings from the survey with KRC Research among 1,950 consumers and executives in two developed (U.S. and U.K.) and two developing markets (China and Brazil) :

• A full two-thirds (66 percent) of consumers say that their perceptions of CEOs affect their opinions of company reputations. Executives, like consumers, don't overlook the importance of a leader’s reputation – they attribute nearly one-half (49 percent) of a company’s overall reputation to the CEO’s reputation. Say goodbye to the days when purchases were made solely on product attributes. Today’s consumer is savvy, well-informed and privy to a wide array of purchase options. Decisions are now increasingly based on additional factors (yes siree) such as the company behind the brand, what the company stands for and now....even the standing of its senior leaders. 
• Nearly three in 10 consumers (28 percent) report that they regularly or frequently talk about company leaders with others. When consumers are asked what influences their perception of companies, approximately six in 10 (59 percent) say they are influenced by what top leaders communicate. Things have radically changed when you can say that consumers -- the public square -- are reacting to what leaders say. Corporate leadership communications are important across the globe, but to an even greater extent in emerging markets. Nearly two-thirds of Chinese consumers (64 percent) and nearly three-quarters of Brazilian consumers (72 percent) rely on executive communications when learning more about a company. For those companies growing in emerging markets, this is important.
• Respect for corporate leaders – CEOs and other corporate leaders – has taken an especially large hit in developed markets – 72 percent of U.S. and 71 percent of U.K. consumers have lost respect in the past few years. Not such a surprise to me because the past few years have been hard on everyone. A bit different in developing markets however: Chinese consumers are evenly split on their changing opinions of corporate leadership (35 percent lost respect vs. 38 percent who increased respect). Brazilian consumers are more likely to have increased their respect for top executives than decreased their respect (33 percent vs. 21 percent, respectively).

Here's the last word that holds a lot of punch in my book....a large 60 percent of a company’s market value is attributed to its reputation. Sixty percent. That's no small change. Get those execs on the communications trail sooner than later.   .

 The Power of Reputation.  Chris Komisarjevsky’s new book, The Power of Reputation: Strengthen the Asset that Will Make or Break Your Career, is a must-read for anyone interested in understanding how to steer their reputation into a career worth having.  Chris provides practical, easy-to-apply advice, techniques, tips and best practices on how to build that reputation you always wished you had but maybe never planned with very much care. He covers all the many elements that make up an enduring personal and professional reputation (they are the same, you know) such as values, character, behavior, trust and communications.   I regard myself as an insider when it comes to Chris’ new book.  Chris was CEO of Burson-Marsteller when he hired me and throughout my time there, encouraged me to build the bank of reputation research we launched as a firm.  He also served as a role model for how CEOs should lead their organizations and build a best place to work.    There are so many great examples that I remember from his leadership and I got to experience up-close how the character of the person at the top sets the tone for the entire organization. There is no denying the inextricable link between the two. Perhaps for that reason, I was particularly drawn to the chapter on Values. Chris provides a list of values that can guide your career path. It seems that everyone should be given that list as an exercise when they start a new job so they can be regularly reminded to follow it. The Power of Reputation also provides terrific real-life examples and anecdotes from a wide variety of CEOs who have been faced with reputational issues and had to decide what was most important to the organization and its members.   Overall, if you are looking to better understand what you stand for, what your company should stand for, and how to build trust and an enduring career, this is a great book to read.    

Just read this article in Forbes about Amazon's Jeff Bezos' number one leadership secret. I've followed him for years and enjoy reading about how Amazon has grown from a bookseller to an everything store online.  I had already been thinking about about the importance of employees and customers for new CEOs when I read that Bezos' number one leadership secret is that the customer is always right. There is this example described in the article that when Bezos calls meetings, he leaves an empty seat at the conference table for what he calls the customer's seat.  A potent reminder to bring the customer's point of view to the table. The article hints at the fact that Bezos has built his hugely successful business bent on "coddling his 164 million customers, not his 56,000 employees."  This has me wondering that in this age of the Internet and social media galore, if customers are now more important than employees, maybe because of sheer size? The pendulum seems to be swinging again anyway. It used to be that all business activities were primarily all about customers, then all about employees and now... it's all about equal parts' employees and customers but with customers gaining the upper hand again.  The Internet has created a sense of urgency about how satisfied your customers are.  Probably because they spread word of mouth more quickly and seem to have more power than employees. They can advocate or criticize your business approach or customer service online for all to see. They have more power because they have so many choices from which to buy from.  The answer for new CEOs, however, appears to be focusing on employees with a healthy dose of understanding what your customers want and quickly scaling to reach them online to confirm what employees are telling you. Something to think about over the next few weeks. Whose more important -- employees or customers for new CEOs and CEOs who've been in office for some time?

I am in Florida now about to speak on a panel about Corporate America and how it can restore its reputation. The panel is being convened at the annual summit of National Association of Manufacturers (NAM).  Getting ready to talk about reputation and how we can repair America's reputation for good business.  A few things are on my mind right now as I was preparing for my remarks. First, has anyone noticed that all the candidates for president this year are always speaking in front of large machinery at manufacturing sites? The manufacturing industry definitely has the wind at its back and should capitalize on this momentum of favorability (and free publicity from the candidates).  Also, in a Harris Interactive survey this year, when Americans were asked about the reputation of corporate America, understandably the numbers were not great. Only about one quarter had a positive perception (with only 2% saying very good, UGH) and barely 10% saying it had improved since 2011. What I found particularly interesting was that when Americans were asked which industries would be part of the solution to the problem of a poor corporate America reputation....they answered that the technology, manufacturing and retail industries were most likely to help improve perceptions. Least likely places to expect help were the governmental and the financial sectors, not surprising. Anyhow, thought I would share these reputation findings as I figure out how to talk about combating the reputation of corporate greed that seems to follow us around these days.

A Wall Street reputation study among marketing and communications executives at financial services firms was released this week.  When asked to rate themselves, only 34% gave themselves an above average grade while 9% gave themselves a grade of  "perfect."  Wonder who those 9% are? The remainder -- 57% -- gave themselves average or below.  The survey by Makovsky and Company had some intriguing results:

• 53% said that Occupy Wall Street impacted their business
• 71% said that Occupy Wall Street will last beyond the upcoming election
• 38% were surprised by Occupy Wall Street (time to be better prepared)
• 74% believe that increased regulation of the industry will help to improve financial service firms' reputations and rebuild trust with customers
• 81% are worried about negative perceptions that exist about executive compensation
• somewhat more than 40% believe that social media has a positive impact on their company's reputation; over half only perceive a neutral effect (fair enough)

So what's a company in the financial sector to do? According to the findings, executives believe that management leadership, quality products and service, and a focus on reputation management will help restore reputation. The killer finding is that 96% of executives agree that the industry brought the problems on themselves. You don't get too much higher than 96%. That's a outright acknowledgement. Of course, today I saw an article saying that college students are still dying to get into the financial services industry. Many are waiting to hear news of summer internships and they are eager to make their way to the the cavernous alleys of Wall Street. So be it. However, I do think that this is the time for financial services firms to hunker down and repair their reputations for the long-term. I vote "yes."

The premier list for CEOs....Barron's World's Best CEOs list came out this weekend. Although you have to have a subscription to the magazine, I can tell you a few things. Number One -- this is a very hard list to get on. CEOs have to have been on the job for at least three years (although they actually prefer five years) to show the impact that a CEO has on a large company. They have to have market values of at least $5 billion and the list is global  (Eighteen CEOs come from the U.S., seven from Europe, three from Asia, and one each from Australia and Canada.)  Every year they have a different slant to how they choose their CEOs. This year they applied the Warren Buffet rule:

"As Warren Buffett sees it, the best CEOs always think like business owners. What he means is that great leaders combine passion, commitment, creativity, and an entrepreneurial drive. That mix isn't easy to find, but Buffett definitely is onto something. So, as Barron's drew up its annual list of the 30 best CEOs around the world, we looked hard for ownership mentalities."

 Many of the usual suspects are on the list such as Jamie Dimon, Howard Schultz, David Novak, Larry Fink, Paul Otellini, Jeff Bezos, Steve Jobs, Peter Loscher and others (including Buffett).

What I particularly liked about the article besides giving CEOs their fair due was the close to the article. They humbly said:

"If you think we put the wrong people on the list or want to make a suggestion for next year, please write to editors@barrons.com. We take advice seriously."

I think that is a great way to solicit opinion. It makes you feel comfortable about taking them up on their offer, in fact.  Impressive.

I spent last Saturday afternoon reading the Harvard Business Review issue which has Reinventing America on the cover. The March 2012 issue. It holds alot of information about how to bring back America and make it a desirable location for businesses around the world. It is rich with information and insights. I highly recommend. In one article on what's wrong with politics in the U.S., (definitely read), you start to realize that one big problem facing the reptuation of the USA is our intractable political warfare. It is hurting America's reputation as a place to do business. The point is that there are many advantages to locating business in the U.S. but the political problems are creating barriers to consideration. One suggestion from the article is the following which falls in line with our work on Civility in America. We are hoping to conduct our third wave on Civility in America in May or June so we will be sure to look into the demand for getting civics classes back into the classroom. A call for action. America's reputation has to turn around and Congress is not going to be the stimulus. Business will.

 

Stand up for civics. Business leaders should urge public officials—and the public at large—to restore civics to its rightful place in the classroom. Data show that many schools fail to effectively teach the workings of U.S. democracy or the responsibilities that go with citizenship. Just as America cannot be globally competitive without a well-educated workforce, it cannot retain its economic edge without a well-educated electorate that is ready to meet the relentless challenges of democratic governance.

 

 

 

Job descriptions for leaders today have to begin including public relations expertise. Just looking at this week's headlines convinced me that CEOs have to be PR crisis experts to be qualified for the job. I was thinking about this when I read the oped in The New York Times from an investment bank's employee and hearing the news about the Afghan killings by a U.S. military person. I also just read an indictment by a former Google employee about the oversized focus on advertising since Larry Page took the reins at the search giant.  Whereas we used to enumerate the operational excellence of CEOs-to-be, today we should seriously consider whether they are crisis-seasoned enough. Bank CEOs, presidents and Internet champion CEOs have little time to respond when their organizations or countries are making breaking news. I hold my breath waiting for them to respond. Every word is dissected and critiqued. Not easy. Years ago, I worked on a research project about how pr-savvy board members were. We looked at how many board members  in the Fortune 500 had "any" communications experience. Sad to say, there were few. I used to wonder how these board discussions went when no one in the room knew how to deal with detractors. Now I realize that not only do boards need some practiced PR professionals among their board members but CEOs too need to also be PR- tested. Of course, corporate communications officers are there to work alongside CEOs experiencing a crisis but CEOs themselves need to be good at communicating their positions and steadying the troops (so to speak). Tone is sometimes everything. Here are remarks from the highest offices of the US government in response to the Afghan rampage. Wonder what you think?

"And obviously what happened this weekend was absolutely tragic and heartbreaking. But when you look at what hundreds of thousands of our military personnel have achieved under enormous strain, you can't help but be proud generally." -- President Obama "This terrible incident does not change our steadfast dedication to protecting the Afghan people and to doing everything we can to build a strong and stable Afghanistan." -- Secretary of State Hillary Clinton   "Our thoughts and prayers are with the families and their entire community." -- Deputy American ambassador to Afghanistan, James Cunningham.