I had heard of a new CEO listening tour but to me, this was a first. JCPenny is running a social media Apology tour. We’ve all heard CEOs apologize for one thing or another and we’ve all worked in companies where a new CEO visits different employee facilities to meet and greet and hear what is on people’s minds. But JCPenny now has a new campaign on TV that apologizes for letting customers down and thanks them for coming back. If you recall, the former CEO Ron Johnson from Apple fame was booted out when his plan failed, possibly because of the elimination of coupons which drove customers into the store. The former CEO, Myron Ullman, was asked to return and now they are in recovery mode. The two ads say:
“It’s no secret. Recently, J.C. Penney changed. Some changes you liked, and some you didn’t. But what matters with mistakes is what we learn. We learned a very simple thing: to listen to you. To hear what you need to make your life more beautiful. Come back to J.C. Penney. We heard you. Now we’d love to see you.”
“At J.C. Penney, we never stop being amazed by you. How you work so hard without looking like you do. How you make every dollar stretch so far and keep your family so close. So we brought back the things you like about J.C. Penney, gave you new things to explore and now, we’re happy to say, you’ve come back to us. We’re speechless, except for two little words. Thank you.”
But back to social media….using the hashtag #jcplistens, JCPenny is in response overdrive from what I saw on Twitter today. They are in constant contact with its Twitter-ites. Every customer or tweet seems to get a personal and speedy response asking to help out, mentioning they will share the feedback with the team if something was amiss and thanking customers for comments. As pointed out on Business Insider, they even told people when they were retiring for the evening. On its Facebook page, JCPenny is polling fans about their favorite brands that they want back after having been cut by the former CEO. And it looks like they are bringing back St. John’s Bay, a favorite. So they are listening hard.
You’ve got to hand to them. They’re trying. And social apology tours are a smart redemption move.
As you already know, I am keenly interested in how CEOs manage their tenures. In my book on CEO reputation, I referred to the various stages of a CEO’s tenure as the seasons of a CEO. When I wrote it several years ago, it started with the Countdown period (pre-announcement), the first 100 days, the first year, the middle years and ends with the last 100 hours and legacy-setting. Since then, I have continued to follow CEOs closely but have been particularly fascinated by how CEOs can use social platforms to build their companies’ reputations and to some extent, their own. That is what I explained in this new article on CEOs getting social in their early tenure. (See also Weber Shandwick’s Socializing Your CEO II)
Surprising to me, despite billions of people communicating and socializing online, little has changed in experts’ advice to CEOs or other executives on how to navigate their early tenure by taking advantage of social tools. In three separate research investigations on how CEOs spend their time by Harvard Business School, the European University Institute and the London School of Economics, and Fondazione Rodolfo Debenedetti, the words “social” or “digital” did not appear once in the nearly 30,000 words written. Management consultants’ white papers on CEO transitions reveal little attention to how to effectively use social platforms. I have about 15 articles with smart advice on CEO successions and transitions that I send to new CEOs and not one mentions using social media. Further still, an online search of the most relevant 30 hits for “how CEOs should use social media in their first 100 days” does not retrieve a concise blueprint whatsoever. Instead, the mentions consist of lists of Twittering CEOs, reasons why CEOs don’t use social media, events and primers for getting into the social game, articles written by CEOs of digital agencies, and do’s and don’ts for CEOs who use social media.
Social media should be incorporated into new CEOs’ early playbooks. Whether CEOs are communicating, engaging in two-way conversation or simply listening in, social media platforms should be gradually adopted. As technology increasingly permeates all aspects of business and society, CEOs cannot afford to be out of touch with their cultures, how their products or services are being received and what their competitors are up to. Moreover, as the next generation of technology-literate CEOs start taking office as 77 million baby boomers leave the stage, being socially-literate will become the norm, not the exception.
For these reasons and because all these management consultants seemed to be overlooking social media as a leadership tool in their early CEO days, I wrote this article titled Get Social: A Mandate for New CEOs. It just appeared this week on MIT Sloan Management Review’s nicely redesigned Social Business site. Please take a look if you are a new CEO and getting the social bug! Or if you are advising CEOs to jump on the social bandwagon even a little. I firmly and proudly believe that this might be the first (or among the very first) articles on how and why CEOs should be social citizens at the start of their tenures and not wait til their seasons come to an end. There are some great examples from CEOs and presidents of companies such as Aetna, Etsy, GM, MassMutual, Best Buy and BAE.
Boston Consulting Group issued a new report about debunking the myths of the first 100 days. It is worth reading if you are a new CEO. Several facts are worth sharing here however and I already dropped some into my presentation on steps CEOs should take in their First 100 Days. Since I wrote a book on the various stages of CEO tenure and how CEOs build reputation from day one to the very last hour, I try to update it as often as I can to keep up. CEOs have to keep up too because their first 100 days provides them with less time than ever before to get it right.
In one sidebar, the article describes how the CEO job has changed due to the growing complexity facing the modern day CEO. BSG found that organizational complicatedness (their word) has risen by a factor of 35 compared to 1955 (when the Fortune 500 was first created!). Many of these changes we already feel but BCG attaches facts and figures to these changes which are good to have.
Far more complex world for CEOs
• Number of performance requirements is 6X more than in 1955. Then, CEOs were measured against 4 to 7 KPIs vs. the typical 25 to 40 KPIs now.
Far more scrutiny for CEOs
• Many more stakeholders are now watching every step that new CEOs take These include activist shareholders, board members, regulators, lobbyists, online pundits, NGOs, consumers, media.
Far more dispirited workforce
• New CEOs are starting when falling employee engagement levels have dropped as much as 14%.
• Among U.S. employees, job satisfaction plummeted about 60% in 1990 to less than 43% in 2010.
I truly believe that the disengagement of the workforce is one of the biggest challenges facing CEOs. And what CEOs do in those first 100 days can make or break their tenure’s success. This is why I believe it is time for new CEOs to get a bit more social, like online!~
When new CEOs start in their jobs, their early actions or what they say at their first retreats with the senior team are memorable. Everyone is on high alert and wondering if things will be different, how their new CEOs will establish legitimacy and set a new tone. So my CEO First 100 day antennae were up and ready for incoming signals at our first senior team meeting with our new CEO. It was a great meeting, lots of discussion, priority-making and theme setting. But what pleased me most was what I would call establishing a CEO signature. Sometimes it could be as simple as handing out books to the team that they should read, inviting certain types of guests or inviting new people to the table. Everything matters because everyone is reading the tea leaves — what does this mean? what signal is he/she sending?
So I was pleased when our new CEO, an insider, began the meeting reading parts of an email that someone had sent him earlier that morning about a meeting with a potential new client. The email was about the 6 reasons to love my company, Weber Shandwick — Smart people who respond even when they are insanely busy, a core group you can always depend upon and never let you down, knowing what great looks like, pride in the people in the room with you and share the company name on their business card, our new business people who always have your back 24/7, and colleagues who always set the bar higher. Then later in the morning, our new CEO read another email he had received from a major business publication praising the firm on their responses to interview clients for a story. He wrote that he just had to let our new CEO know that he has never seen a pr firm respond with such rapidity, thoughtfulness, thoroughness and smarts.
At that moment I decided that this had to be our new CEO’s signature….sharing these kinds of notes with the team. First, it felt great hearing what people had said about the company and second, it was all about the work and colleagues. It just felt so right. I immediately thought of how President Obama reads 10 letters a day to see what people are thinking. I had just read a note he had sent to a young girl who has two dads and asked the President about being teased at school and asking him what he would do. The President wrote the little girl with his advice.
CEOs must get amazing notes — good and bad. It makes sense to let everyone hear how the firm makes an impact in unexpected ways that do not get shared every day. There was some drama in the emails being read which I loved. It deepened the sense of a shared experience and community which is what a CEO should try to instill, especially at the outset.
Just caught up with my November HBR. There is an excellent article by the CEO of Siemens, Peter Loscher, on how to use a scandal to activate change in an organization. There is a section in the article on Loscher’s first 100 days, a favorite topic of mine. He says that he was the first chief executive at Siemens who came from the outside and mentions how it actually worked to his benefit because he brought an outside perspective to his early start.
In the article, he mentions that one of the things he wanted to do in year one (post 100 days) was to get the organization more focused on customers. And then he proceeded to explain how he did it. I thought it was such a cool idea that I wanted to share it. Here is what he said:
“In my first year, I tried to find other ways to emphasize to the entire organization that customers should be our primary focus. Once a year, our top 600 or 700 managers gather for a leadership conference in Berlin. Before my first one, in 2008, I collected the Outlook calendars for the previous year from all my division CEOs and board members. Then I mapped how much time they had spent with customers and I ranked them. There was a big debate in my inner circle over whether I should use names. Some felt we would embarrass people, but I decided to put the names on the screen anyway.
The rankings were a classic bell curve, with most people in the middle. I was number one, having spent 50% of my time with customers. I said to the people at the leadership conference, “Is this a good sign or a bad sign? In my opinion it’s very bad. The people who are running the businesses should rank higher on this measure than the CEO.”
I put the rankings up again in 2009, in 2010, and in 2011. And now things have changed. The curve has shifted. Some people have passed me, and most are near me at the top of the distribution—because everybody knows this matters and that names will be up there at the next leadership meeting. With this simple approach we have achieved a much, much stronger emphasis on customers in the top management echelons.”
What a smart way to get management focused on being customer-driven. As he concludes, “But if you want to change a big, complex organization like Siemens, you have to make your agenda known, and you have to communicate in simple terms.” I’d say taking stock of everyone’s calendars and tallying up the time spent on customer activities, sent the right message, clear as a bell.
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.
What a day for female CEOs. Marissa Mayer becoming the CEO of Yahoo! and lo and behold, she is having a baby. Talk about agita. I thought it would be interesting to see how many mentions of pregnancy came up when searching for Marissa Mayer and Google or Yahoo! So I started by first looking at Marissa Mayer and Google or Yahoo! There were zero mentions on the days leading up to the announcement (good to hear that there are some secrets in this world) but on the day of the announcement (7/16), there were 125 mentions and 449 one day later (7/17).
What about when we add on “pregnancy.” On Day 1 and 2, there were 70 mentions of Marissa Mayer and Yahoo! and pregnant or pregnancy. It felt like that is all I read about so I was surprised that there was not more.
However, what would happen if we looked at Marissa Mayer and Yahoo! and pregnant or pregnancy compared to Marissa Mayer and Yahoo! and “qualified” or “qualifications” or “qualification”? Oops, there were only 9 mentions. So the PREGNANCY of new CEO Mayer at Yahoo! outweighed mentions of her QUALIFICATIONS about 8 times over. That sounds like a story in itself.
As my colleague Liz said to me, “She really blows the first 100 day CEO model out of the water. Maybe this is a new book for you to write, Leslie. Your new model can be segmented by trimesters.” That certainly got me laughing.
Every week I think nothing new is happening in the world of reputation. And I am always wrong. There are always CEOs coming and going, companies that get into trouble and lose reputation points and new things to learn. That’s the best part. Here’s a few:
1. Booz Allen released their fabulous CEO Succession report. I read it every year and welcome the insights. This year they focused on new CEOs, a topic dear to my heart and book. This year they found that 14.2% of CEOs of the world’s 2500 largest public companies changed over. This is a sizeable increase from last year when the turnover rate was 11.6%. This increase makes sense because as boards battled the recession, it was not the opportune time to change chief executive reins. Better to batten down the hatches when times are tough. Strikingly, Bozo found that outsider CEOs are making a comeback. In 2011, 22% of all new CEOs were outsiders compared to 14% in 2007. That’s definitely surprising to me since the trend has been in favor of insiders for a while now. The possibility is that companies need fresh new ideas and outsiders with global experience as they now look to grow. You should check out the report because there always is a lot of fascinating information on the world of CEO transitions. For example, outsider CEOs are more likely to lose their jobs, the number of CEOs being appointed chairman has declined and nearly 90% of new CEOs have not been a CEO before. That last fact is astounding and perhaps why we get asked about our services on CEO First 100 Days as often as we do. In another post, I will provide Booz’s insights on advice on CEO’s first year in office.
2. Reputation Institute released its worldwide reputation findings on the Most Reputable Companies. Their headline reads, “Reputation Is Impacted More By What You Stand For Than What You Sell.” In their research, they found that “People’s willingness to buy, recommend, work for and invest in a company is driven 60 percent by their perceptions of the company and only 40 percent by their perceptions of their products.” That’s an important finding and mirrors Weber Shandwick’s results on the importance of the company behind the brand. We are on the same wavelength, clearly. They also found that only 11% of the top 100 companies have better reputations abroad than at home. “It’s because reputation isn’t something that’s easy to export,” says Nicolas Georges Trad, Executive Partner at Reputation Institute. Love that quote.
3. I also attended Spencer Stuart’s CMO Summit this week on innovation. It was illuminating in how innovation gets baked into companies from the head marketing honcho. Whereas one company CMO panelist was analytical in her approach, another was more artistic and qualitative. Goes to show that culture drives execution. From the panel, I learned about another usage of HIPPO which is always a bonus to me – it is a reference to the Highest Paid Person’s Opinion. Everyone in business knows what that means.
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?
Yesterday I was asked to talk about what I do at Weber Shandwick to our Crisis and Issues group in New York. It was an end of the week get together to take the edge off of all the long hours. I talked about reputational issues and answered several questions. It was a nice opportunity for me to reflect too.
I was asked where all the celebrity CEOs had gone which made me recall my first book on CEO reputation. The book was released at the height of the dot com boom when 22 year old CEOs were the norm and celebrity CEOs were plentiful. In my book, I tried to make the point that it was not CEO celebrity that mattered but CEO credibility. As I was answering this question, I realized that I hit on some of the right notes as to why CEO celebrity was not the same today but missed a few. In fact, I mentioned that being CEO today was not an easy job whatsoever. CEOs are much more embattled. Here are some of the reasons I talked about yesterday but others as well taken from an Economist article I was saving to post about.
- CEO tenure is shorter than it used to be (on average 6.6 years, according to Booz’s research). They usually come into office with great fanfare. They get approximately two years of grace when they start out (more like 18 months), 2 years to provide evidence that their strategy is working and two years to get pushed out. After six years like this, it’s best to be a CEO nobody.
- CEOs don’t have all the power anymore. Most CEOs now have separate chairmans that are looking over their shoulders and asking a lot of questions. Booz found that in 2002 48% of incoming CEOs were also chairmen. In 2009, that number dropped to 12%. Hard to be a celebrity when there is power sharing going on.
- CEO compensation is always a headline and increasingly links the CEO title to perceptions of greed. CEO compensation is actually declining.
- Shareholders and stakeholders are not sitting idle. They are much more aggressive. Some hedge funds are actively browbeating CEO and corporate decisions and in executives’ faces. The ridicule can get strenuous.
- Boards are more active too. They don’t want their reputations shamed either by poor CEO decisions or poor behavior. And according to Korn Ferry, new board members are more likely to be deep in international experience and have worked abroad. They are not necessarily golfing buddies like board members of yore. Angry birds maybe, but not necessarily tee time!
With all these barriers in place to curb the power of CEOs, celebrity CEOs can hardly flourish. Instead, we are looking at a new world of convening CEOs who communicate internally to employees, communicate online or through video to netizens, travel to speak to customers and influencers at forums they convene themselves (IBM‘s Smarter Planet method), partner with third parties and government to problem solve on today’s economic woes and so forth.