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.]
Leadership is very messy. I was asked the other night at dinner why President Obama was not coming out slinging on the repair of the healthcare website. Why was he not saying anything? And why were his advisors not telling him to speak up and put a stop to the constant naysaying? Well, for one, I think the reason is that there is nothing to say until it is fixed. He apologized and put a bookend on the mess for now. That was the right strategy. Now he should say nothing until it has been resolved. Why keep it in the headlines by saying something? No one wants another BP oil spill where the headlines went on for weeks regarding how much oil was spilling into the Gulf.
I read the New York Times columnist Bill Keller’s to-do list for President Obama on how tosalvage his reputation now that it has stalled. Keller basically says that now is not the time for “grand new initiatives.” True. He goes on to say, “ It’s not that I want the president to think small; by all means, address the threat of climate catastrophe and push ahead on early childhood education. But he needs to get a few wins on the scoreboard.” Absolutely. Now is not the time for the big speeches, big sweeping initiatives, big words. Now is the time for small, incremental steps that change the conversation and get him back on track. I also found it interesting that Michelle Obama chose this time to release news that she is going to focus on higher education for low-income students. Clearly, a great policy decision but the timing is not coincidental. The White House needs some positive news to overshadow the constant barrage of negative sentiment surrounding the White House. Everyone loves Michelle and who can argue with her for coming to the rescue. Wonder if we will be seeing more of the kids now.
However, this too shall pass. Maybe we should spend more time focusing on the devastation in the Phillipines and what we can do.
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.”
It is turning into a red hot trend and helping to chip away at that uncivil reputation about America. And it is happening right here now. A colleague at work even told me how a total stranger ahead of her on line paid for her cup of coffee the other day and how touched she was. Then I saw this article on the concept of paying it forward. When cars are waiting on line to order a burger or chicken sandwich or milkshake at their local drive thru, they pay for the person behind them — no strings attached. And it just starts a wave of others doing the same. “We really don’t know why it’s happening but if I had to guess, I’d say there is just a lot of stuff going on in the country that people find discouraging,” said Mark Moraitakis, director of hospitality at Atlanta-based Chick-fil-A. “Paying it forward is a way to counteract that.” Some of these drive-thru operators are saying that this happens several times a day now. Because I dont drive often, I have experienced it less frequently here in New York City. However, it’s a great idea for enhancing our reputation as a nation of kind human beings that have the capacity to speak in civil tongues (unlike the shenanigans in DC). For more on Civility in America, read here. Happy halloween!
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.
Fake commentary. This weekend I received constant fake commentary to my blog — every minute. I deleted over 1000 or more in the end. I just could not believe that anyone cares enough to assault my blog like that but apparently wordpress has been having these robo-attacks which affects its users. Very annoying.
On the subject of fakery and forging online reviews, this morning I read about the proliferation of fake reviews online. It is estimated that by 2014, nearly 10 to 15% of social media reviews will be fake. The problem with this is obvious to all — reputations are won and lost by such phony reviews. How many times have you turned away from a product because a review was scathing or negative? And how often has that bad review made you think less of the company behind the brand or anything else that company sells? This causes reputation doubt.
Some of our research at Weber Shandwick has found that online reviews were becoming nearly as important as professional reviews. For example,by more than a margin, consumers pay attention to consumer reviews over professional reviews for consumer electronics products (77% to 23%). They read 11 online reviews on average before purchasing products. Online reviews surely affect the bottom line. New York’s Attorney General Eric Schneiderman, who is leading a crackdown on companies in the business of creating false online reviews, gives good reasons as to why this is more than an annoyance: ”Harvard Business School found that increasing a restaurant’s review score by one star on Yelp.com could boost business up to 8 percent. Cornell researchers found an extra star on Travelocity or TripAdvisor could translate into an 11 percent increase in a room rate.” So there you go. Fake reviews destroy reputations and profitabilty.
Many of these firms hire people in other countries who get paid $1 up to $10 to write one negative review. Luckily, our attorney general in New York is trying to get rid of them and is giving out large fines to keep them from continuing this bad behavior. Reputations deserve better than this.
Reputation resilience is a topic I often think about because it should be on all leaders’ minds. How can I build the most resilient culture so that we can withstand a crisis that risks our hard fought for reputation? A new report from Schillings in the U.K. examined UK FTSE 350 and leading private companies about reputation risk and resilience. Respondents were Communications, Legal and Risk executives. Here are some of the findings:
- All executives surveyed are spending more time on reputation risk management than they did two years ago — 80% say more time (among risk managers), 68% (among communications heads), and 53% (among legal executives). No one said less time.
- Only 17% say that there is formal reporting to the board of directors on reputation risk. Clearly, not good enough.
- The top five threats to their company’s reputation are (in rank order): business underperformance, information risk, operational risk, health and safety incidents, and employee behavior. Social media comes in at 6th place.
- When asked what was the biggest obstacle to making reputation risk management top of mind at the company they work for, 37% of respondents said “CEO/Board removed from reputation risk: lack of focus without a crisis and too much reporting.” That is unfortunate. Companies should not need a real crisis to get them to pay attention to risk management.
- Fortunately, communciations and legal executives are onto it. They know that their jobs require them to take charge of their company’s reputation and any associated risks. A full 72% of communications executives said they feel directly responsible and 63% of legal executives are responsible for their company’s reputation.
- How resilient are companies to facing challenges to their reputation? There is a surprising (to me) fair amount of confidence. 55% are “confident enough,” 29% are “very or extremely confident” and 16% are “not at all confident or unsure.” Although this bodes well for many companies, I would be wary – essentially 84% of top executives are confident. If you ask me, they are not worrying enough about all the possibilities that could befall their reputations. Risks to reputation seem to be coming from all directions today and being over-confident is the wrong stance.
Another interesting aspect of this newly issued report is that Schillings is a law firm. They have rebranded themselves to be all about managing reputation risk. Their tag line is “Law at the speed of reputation.” Serious business. What would compell a law firm to switch to focusing on reputation? Here is what they say about their transformation: “To continue to lead at a time of such extensive change, we’ve fundamentally changed our own offering. By combining our unrivalled expertise in reputation law with new risk consulting and IT security expertise, we have been able to create an integrated offer that continues to safeguard the successful businesses and individuals we represent whilst living up to the promise that underpinned our business from day one.” It would be hard to name many law firms that have done the same. Reputation is changing the face of organizations all across the globe and some firms see the opportunity ahead. Maybe Schillings sees the risks down the road for them as a law firm and are taking their risk by the horns. Interesting approach.
Everyone wants to measure reputation. Measurement, big data, metrics are all the conversation today. As I have mentioned before, reputation is high on CEO agendas as they see more companies lose reputation equity and that calls for better research. I just came across the Arthur W. Page Society, The CEO View: The Impact of Communications on Corporate Character in a 24×7 Digital World study which noted that some CEOs “report measuring as many as 30 different brand attributes as experienced by as many as 15 discrete stakeholder groups.” That give you a sense of how research has become more complex as the world has become smaller and scrutiny greater. 15 different stakeholder groups! It used to be employees, customers, media, investors and government officials. So whose among these added groups? NGOs, online influencers, bloggers, naysayers….it is never ending.
The report calls this “high-resolution measurement.” A great term. Hard-data rules.
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.