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.
I’ve always said that every industry gets its turn at reputation downfalls. Every industry has to be prepared for clearing its name when crisis strikes. We’ve seen that in the oil industry, financial services industry, auto industry, pharma industry and so on. The one industry that seems to always fare well in the best industry rankings is technology. However, according to an article in The Economist on what to expect in 2014, we should be getting ready to witness a tech-lashing. The reputation of the Silicon Valley elite are soon meet their due if the tech-party extravaganzas and limosine crowd continue full throttle as they are. As Adrian Wooldridge of The Economist says, “Geeks have turned out to be some of the most ruthless capitalists around….The lords of cyberspace have done everything possible to reduce their earthly costs. They employ remarkably few people: with a market cap of $290 billion Google is about six times bigger than GM but employs only around a fifth as many workers. At the same time the tech tycoons have displayed a banker-like enthusiasm for hoovering up public subsidies and then avoiding taxes. The American government laid the foundations of the tech revolution by investing heavily in the creation of everything from the internet to digital personal assistants. But tech giants have structured their businesses so that they give as little back as possible.” These are not kind remarks about an industry that has been revered for so long.
Wooldridge might be onto to something as more information seeps into the public’s consciousness and the inequality divide starts to gain notice. One example cited by Wooldridge was a recent party where a 600lb tiger posed for revilers in a cage and a monkey was made available for Instagram pictures. [Where was PETA?] Another article on Gawker headlined this supposed joke: “If you ask people in Silicon Valley about the dismal job market, they’ll laugh and say, ‘What’s ‘job market’?’ A new mobile social networking app?” And if you are still not convinced that something is underfoot, The New York Times ran an article this week about how all the Silicon Valley million-billionnaires are changing the tenor of neighborhoods in San Francisco, buying up all the real estate and generally crowding out the long-timers. One person is quoted as saying she is surprised by how coldblooded these technorati are. Not a pretty portrait.]
All of this criticism is tied up with ill feelings about technology companies having handed over data to the NSA whereupon Edward Snowden exposed this wrongdoing to the world. These serial reputation-damaging incidents are beginning to chip away at the technology elite’s image-making and positivity they’ve done in making our lives more productive and interconnected.
2014 might just be the year when the technology sector loses its luster and customers and the general public begin to wonder what social good they are doing with all their riches and IPO shares. A reputation risk for the technology sector for sure.
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.]
CEO reputation is still incredibly important. As I have always said, it’s nice to say that it should not be so important or to say that it is should be more about the company than the CEO, but ultimately the CEO sets the tone, style and destiny of a company. A recent survey of top communications officres in Europe confirms the uber-importance of the CEO to a company’s success. What I found most interesting, however, were the findings on CEOs and communications. Considering that these are communications officers, the study has some good inside info on CEO activity:
- 83% said that their communications teams are working on positioning their CEO
- 67% are working on the CEO’s profile (probably online) and a CEO-focused communications strategy
One of the more interesting articles I have read recently describes how the conference business is surging and providing better outlets for CEOs and other executives to speak. All this “live media” or “live journalism” (what it is now being called since you can repurpose it, livestream it, twitter it, YouTube it, etc) is perfect for positioning CEOs (reflecting the findings above) and other top executives you want to shine a light on. Weber Shandwick has a thriving business run by Carol Ballock helping CEOs and top executives find the right platforms to speak at and helping shape content. Our research on the best conferences has finally put some metrics behind this burgeoning phenomenon. Here are a few examples if you don’t believe me. The Huffington Post is hosting three conferences of Arianna Huffington’s marvelous Third Metric idea, Atlantic Media now does over 200 events per year including exclusive dinners and week long conferences. The New York Times is convening 16 conferences in 2013, up from one last year. The Wall Street Journal is hosting its 6th CEO Council. Tina Brown left the Daily Beast to get into the conference business. Many of these conferences, including Fortune’s Most Powerful Women in Business, are expanding overseas too. Digital media companies are also hosting live events that help position executives, pundits and influencers. It is a gold rush. As the New York Times says, “Live events promote their brand” and “..conference centers are considered just another social platform with Twitter, Facebook and online video.”
I attended the Council of PR Firms Critical Issues Forum a week or so again. I always enjoy attending because I learn something that sticks with me. The topic was all about Content Frenzy which certainly resonated with the attendees. The panels were stimulating and overall, an A+ event for those of us in this industry who are watching what is content change before our eyes. Of course, I have to tie everything back to my main interest in reputation, so here goes:
1. Media pundit Jeff Jarvis said that “messages are dead.” He said that we should be in the relationship business and worry less about messaging. Makes sense to me if you are building reputation. Communicating that want to be perceived as the most innovative company, the most admired company, the best place to work, the most global, etc. does not stick for long in people’s minds as much as creating the feeling that a company cares about you as a customer, wants to listen to what you have to say and works hard to retain your business.
2. News Corps’ Strategy VP Raju Narisetti said that companies are not competing for audiences but for our time. That’s the honest truth. Companies have to recognize that there are so many hours in the day and everyone is overextended and bombarded with messages. Good storytelling is the answer and knowing how to do it well is an art as well as a science. Six second Vine videos might just do the trick. He also said that native advertising was a faustian pact that could cause serious credibility problems (ouch!) and damage reputation (ouch!).
3. Harvard Business Review’s editor-in-chief Adi Ignatius said something that certainly perked up my ears. He said that everyone today is a thought leader. He is right. Everyone provides content. I consider myself a thought leader and it did not feel good to hear that my competitors are everywhere. I have been learning too that everyone is a reputation management expert. I might have to figure out something else to do. Reputation-wise, companies and CEOs with a thought or two of their own are competing with everyone else’s content storms. Everyone is overwhelmed with a glut of content, so said Amy Webb of webbmedia. She is someone worth following.
4. Small data is more relevant than big data. I dont know who said it but it is profound. I agree. We are so focused on the very big data, that we are missing the more relevant, localized, individualistic insights that can break through our universal content overload. When it comes to reputation, maybe we should be focusing on the small conversations and not the “most popular” ones. We might learn alot more by following one person over time than following an entire army of tweets and posts. Maybe, also, it is the smaller and more incremental reputation enhancement steps that matter than the large, broad big efforts that companies tend to embark on and hammer us with. I am not sure but I know it is true when it comes to reputation recovery.
Tomorrow is Monday…have a good week!
I wanted to read the chapter in Trust Inc. by Linda Locke on “Trust, Emotion and Corporate Reputation.” I bought the book because Barbara Brooks Kimmel has done such a terrific job building Trust Across America-Trust Around the World, an organization focused on the fundamental element of trust. Linda is the founder of Reputare Consulting which is a reputation management consulting firm. I know Linda from events at Reputation Institute and her work leading reputation management at MasterCard. She really knows the field, is a thought leader on reputation, has powerful insights, and I follow her regularly on Twitter (@reputationista)…love that handle.
In the chapter, Linda mentions that facts are often not enough. It is a good starting place to build trust but if that’s all a company has to provide in a crisis situation, it is not going to work today. She says: “To earn trust, a company must go beyond the requirements, beyond the simple facts of the situation, and demonstrate that it understands the concerns of the stakeholders.” Showing empathy, care and concern are necessary ingredients to rebuilding trust, protecting reputation for the long-term and beginning to repair the reputation tear. What caught my attention was her recommended breakdown of communications content when a company’s reputation is under the glare of spotlights:
- 50% of a company’s external communciations should express care and concern
- 25% should express the company’s commitment to fixing the situation (what are you going to do, when and how)
- 25% should focus on the facts (again, facts have to be there but it is not all there is).
These are very helpful proportions to use when explaining to companies what they need to do about the content of their risk communications. What fascinates me the most, however, is how companies today have to show their “softer side” when they are in the middle of a brewing crisis and be more vulnerable and empathic. This is a major change in how companies are expected to communicate when they have done wrong in the public’s view.
Linda provides some case studies in her chapter that truly intrigued me. She provides a social-pyschological framework to understanding the public’s emotions to losing trust in institutions. Here’s one to share. She gave an example of a financial services firm managing their reputation during the horrific and unprecedented financial recession of 2007-2008. The firm analysed what people were saying about how they felt during this period. As she describes it, the firm found that three emotions were most evident in the public discussions about the financial downslide that was causing a real sense of fear and loss of trust. They were: irreversibility (consumers fear that what was happening was irreversible and would be permanent); unfamiliarity (consumers having never experienced anything like this economic uncertainty before) and involuntariness (consumers had no control over what was happening to them and could not influence the outcome whatsoever). The consuming public was paralyzed by fear and what could companies do to assuage their loss of trust. For companies faced with these raw emotions, Linda recommends explaining in everyday language (certainly not corporate speak) how the situation happened, how it is similar to a familiar experience they may have encountered in the past, the role of the responsible parties to fix the situation so it does not happen again and how the company will do whatever it takes to repair that broken bond of trust. And certainly empathisize with those affected and show you care if you want to keep your reputation from cratering.
Building trust is the bedrock of reputation. If your company is not trusted and credible, it is going to fail fast and I mean really fast.
There are many ways to rebuild reputation but one way that companies might consider when recovering from a crisis is developing a Compliments page where employees and non-employees can anonymously thank those front line or other employees for doing their jobs well and conscientiously. I spoke to a company a short while ago as they were dealing with a reputation crisis and suggested that they start a Compliments page where community members could thank those front line people they encounter frequently for doing a honest day’s work. It could help. Of course, the site would attract uncivil types but there must be a way to delete them if they stray too far from the site’s purpose and goals.
Some universities have being doing this for a while. It started at Queen’s University in Ontario because the founders wanted to find a way to counteract bullying. University of Pennsylvania has a Compliments Facebook page as does Penn State. On the U of P site, people thank others for returning their lost wallet, for the sense of accomplishment they feel after doing nonprofit work, to a capella group for their beautiful sound and send support to a fellow classmate struggling with pain. The U of P Compliments page has the goal of “learning to do good and spread good.” Penn State’s site says that it is a social project to spread happiness.
Compliments pages are a wonderful idea considering that incivility that can sometimes surround and engulf us. In Weber Shandwick’s Civility in America 2013 study, we found that 70 percent of Americans believe incivility has reached crisis proportions. With Americans encountering incivility more than twice a day on average (2.4 times per day), and 43 percent expecting to experience incivility in the next 24 hours, dealing with incivility has become a way of life for many. Maybe it is time to turn this tide of negativity.
Compliment sites can be contagious and make people feel good despite their company’s blemished reputation. It could give an employee that extra boost they need to be productive and positive when they find everything uncertain. Hearing a compliment might keep an employee loyal to his or her company and make them feel they are doing their part in getting their company’s reputation back on its feet. Companies might consider trying this and seeing what happens. Reputations get repaired in the oddest ways.
You have to love him. Was just reading from Fortune’s Most Powerful Women summit and came across Warren Buffett’s latest description on great reputations. He obviously has the insanity in Washington D.C. over the debt in mind.
A great reputation is like virginity – ‘it can be preserved but it can’t be restored.’ Once you default, it’s hard to go back.
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.