Weber Shandwick

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.

I have thought about the company behind the brand for at least a decade (maybe more?). Years ago, I was involved in a pilot test where we placed corporate and product ads for several companies from different sectors in a business publication to try to determine the right balance of corporate to product messages to generate awareness and interest to buy. Should a company run one corporate advertisement and 1, 2, 3, 6, or 10 product ads to gain notice? Should they alternate the order -- three product ads, one corporate ad, three product ads in that order? Do they even need corporate ads? Over how many months would it take to generate the most interest for the company and the products being sold? This was in the days when companies were wondering if they should communicate what they stood for, who they were and if it really mattered. Obviously pre-Internet days. It was a huge research undertaking that involved printing presses and hand-inserted advertisements. I learned alot about rubber glue and washing sticky hands. But my interest in the company behind the brand has always remained with me and kept me wondering how important it was to consumers (and executives). Do they really care? Does anyone notice the face of a company and its character, its values, its narrative? What do people do if they don't like the parent company but still want the product?  Luckily, we now have research on how important the corporate brand or parent company really is and why it matters to consumers and executives alike. We released the research today, The Company Behind the Brand: In Reputation We Trust, conducted with KRC Research. Some of the key findings are:

• 70 percent avoid buying a product if they don't like the company behind the product (consumers)
• 67 percent are increasingly checking product labels to see what company is behind the product (consumers)
• 61 percent get annoyed when they can’t tell what company is behind a product (consumers)
• 56 percent do research to learn about the companies that make what they buy (consumers)
• 56 percent hesitate to buy products if they can’t tell who makes them (consumers)
• Executives estimate that, on average, 60 percent of their firms’ market value is attributable to its reputation. 
• 86 percent of executives report that their companies increased their efforts to build reputation over the past few years

More to come. And it's been a busy day getting the research out so will return shortly.  

Tomorrow is the anniversary of the shooting of Gabrielle Giffords, Congresswoman from Arizona. And let's not forget the unnecessary killings of six people including a young 9 year old. Many were also hurt, including our nation's reputation. At Weber Shandwick, we started studying civility in June 2010 with a follow up in 2011.  We realized that civil discourse was taking a turn for the worse in 2010 and we set out to better understand how the American public felt about this . We did not of course realize what was to come in the Arizona killing spree but we definitely knew that America's reputation for civility was heading in the wrong direction. Our research with Powell Tate and KRC Research on civility was breakthrough for a pr firm. The coverage has been consistently high.  There are approximately 10  million mentions of civility when I last searched. The idea came to me when I was at the Council of PR Firms' annual event in October 2009.  David Gergen, the political commentator and advisor to presidents,  was a guest speaker and he was talking about how President Obama had mentioned how he had to figure out a way to get people interested in civility. The light bulb went on in my head and I could not let it go. Why not ask Americans what they thought of the tone of our national discourse in politics, schools, on television, online and in sports? How had the American public square become so unruly and what did Americans think they could do about it? And so we started the research. I am proud that Weber Shandwick added to the national conversation in a thoughtful and meaningful way. In my opinion, we should make it our business to teach people what is civil and uncivil behavior. There needs to be a national public education program to better inform people what the limits are. In 2011 when we did the last survey, Americans expected civility to erode even further. Whereas more than one-third (39%) expected things to turn less civil when surveyed in 2010, more than one out of two Americans — 55% — expected a lack of civility to become the norm in 2011. And incivility did become the norm, not just in politics but in cyberbullying, school bullying and workplace bullying. I could not even guess what people think now as we enter the political cycle. We will be asking again as the incivility season (oops I meant silliness season) begins again. At least tomorrow, on the one year anniversary of the Arizona tragedy, we can hold our tongues and keep our clicks at bay and be civil to our neighbors. The Arizona tragedy was not really due to incivility but due to the mental illness of a lone shooter. But it did touch the nation's nerve and made us all think twice about the widening of our civility deficit.

Chris Perry (@cperry248) who is our digital communications president, wrote this really good post on Forbes about social CEOs. I am taking the liberty of repeating his 5 must-dos for CEOs wanting to get social or even considering it. I would probably add one more and that is to find yourself a buddy who can read your Tweets as a sounding board when you first get started. I think that that second opinions can save oneself from having a red face and worth the try until you feel comfortable enough to try it alone.  And maybe it's worth having a buddy just as good practice when it comes to Tweeting or even Facebook.  They might not be good golfing buddies but hey, this is a new age. Take his advice. It is seriously good. Here they are.....straight from Chris. Realize you shine bright in social mediums. Social media participation is a public appearance where everything is on the record. Assume that comments will be picked up by the press as well as examined closely by your customers, staff and others watching your company. Speak and act accordingly. Recognize your role as Chief Narrator. Social platforms like Twitter aren’t a sounding board for a CEOs innermost thoughts; they’re an extension of other modes of communication you use as the lead executive of your organization. There’s great opportunity to share thoughts on your company or industry issues that get amplified through networks that reach employees, investors, customers and the press. As with existing communications efforts have a plan in place as you engage. Anticipate social remarks being a part of a permanent public record. Avoid posting or tweeting on topics that you would never discuss aloud in a public forum. Badmouthing competitors, going too deep into personal affairs or speaking about divisive issues is not the way to go. Don’t be gun-shy when engaging online, but anticipate that what you say will generate the same reaction as if it were published in the press. Don’t court controversy if you can’t take the heat. Opinions on relevant industry issues and current events that affect your business are fine. But steer clear of statements that might be controversial – unless you want to be at the center of the storm. Off the cuff remarks can have a massive ripple effect to be managed your staff, PR team and others tied to the issue after the fact. Pause for a moment in private before you go public. Despite the inherent risks embrace your humanity. Words of caution don’t mean you can’t let your personality shine through. In fact, this is one of the best ways CEOs can engage on a deeper, more human level with stakeholders. Personal insights into what it’s like to lead an organization show authenticity. Just remember that there are limits to what’s appropriate to share.   Any leader looking to engage through social media can harness the power, or suffer from the peril, of the medium. While it provides a forum for new interaction, new communications policies have similarities to traditional media guidelines. Keeping that in mind will help you participate in ways that adds value, not headaches, to your organization.    

We recently released an interesting exploration on the relationship between top corporate communications officers and legal counsel when it comes to reputation management. I have already posted about this relationship where these two senior corporate officers seem to be working together more than ever. In light of the multiplying crises that companies and its leaders are facing on an hourly basis, the relationship between the two officers including outside counsel has to be strong and respectful.  As we say in the report, “general counsels (GCs) and chief communications officers (CCOs) are now finding themselves participating in the same reputation management strategy meetings, conference calls and contingency planning sessions. GCs, external legal advisors and CCOs now have no choice but to trust and understand each other.” There are several noteworthy insights and best practices in “Managing Legal and Reputation Risk” but two stand out for me in particular. The first is that you can’t prepare enough and expect surprises. ...”executives still find the nature or intensity of the situations they’ve managed to be unfamiliar or unanticipated on some level.” This is so true. There is always something overlooked or unexpected.  In fact, it seems to me that it is getting harder to find precedence for some of the crises that arise. For example, the Olympus crisis has few precedents.  For this very reason, being ready, practicing a few scenarios ahead of time and giving time to “near misses” are sensible readiness processes to have in place. Another finding that resonated with me was how general counsels appeared more willing today to balance the interests of the business with legal priorities. They said this, not just me. There are times when the short term hit (such as apologizing or admitting that the company could have done better and will do better in the future) outweighs the costs of winning or losing in a court of law down the road. The fact that many of the legal counsels we interviewed agreed that the “short-term pain for long-term gain” is often the right strategy demonstrated the transformation in communications-legal circles that we explored.

Another stat to add to the many on how long it takes to recover reputation. Actually I should say...to add to the few. There really are not that many besides the one we did some research on that shows it takes about three to four years after a crisis. However, I found this one from the Ponemon Institute and Experian that says that nearly 850 executives say that it takes about one year to restore an organization's reputation after a data breach.  It also found, depending on the type of breach, that the average loss ranges from $184 million to over $330 million. Or put another way-- the minimum brand damage is a 12% loss which could increase to 25% of the brand value if the breach was horrific. Just as disturbing is the lack of data breach preparedness according to the research. A fairly large 43% had no plan in place to deal with a breach of confidential leak or theft of customer data.  Perhaps this is why there seem to be so many. Most companies are unprepared and do not think of a data breach in the same way they do another type of crisis that is more common. Either way, it is critical to be prepared since if you really want to make your customers mad, a data breach is a surefire way to make that happen.

  Just returned from a multi-city tour of Europe where my colleagues and I talked about socializing your brand. This was based on our (Weber Shandwick) new recent research. We spoke to many clients and prospects about digital communications and the rewards and risks that come with this new territory.  Someone asked how you balance the reward-risk ratio when your senior management does not recognize that digital is so important to reputation today. In fact, our research found senior marketing/brand/comms executives saying that over half (52%) of a brand reputation today is attributed to how social it is. And this figure is expected to grow exponentially as time goes by. This gentleman said that being a social brand is akin to surfing with sharks. I loved the analogy because it explains how great it can feel to employ digital to communicate and give voice to a brand's story and yet how unexpected it can be when you feel that shark ripping into your reputation. The answer of course is being prepared. That's what the best of companies do. Crisis readiness gives you the head start you need today, in both a digital and non-digital world. Reputation is increasingly hard to manage while swimming with the unknown.

  It has been a very hectic week as we travel around to the many markets in EMEA to discuss Socializing Your Brand, our new research on what it takes to be truly social today. As always, I try to keep up with other news and events and that has been harder than usual as my laptop crashed between markets. Caught an article citing Michael Silverleaf, legal counsel hired by News Corp., saying that it would be harmful to air information related to “a culture of illegal information access” because it would be "extremely damaging to NGN's public reputation."  (NGN=News Group Newspapers) I had a double take when I read the last two words of this sentence. Is there such a thing anymore as a public vs. private reputation? It seems to me that there is no longer a divide between private and public. There are no secrets and we are all public figures and public institutions. Let`s get real. The other article that caught my eye came about while taking a train with my colleague to a mountain top village near Geneva.  Instead of day dreaming as I had hoped, this brought me back to reality. The article is terribly interesting because it is about women CEOs and how their husbands support them in their quest to the top.  James Stewart wrote it probably because he was thinking about the new female CEO of IBM who recently joined the exclusive – and small -- club of women CEOs.

“Asked at a Barnard College conference what men could do to help advance women’s leadership, Rosabeth Moss Kanter, a professor at Harvard Business School and author of the landmark “Men and Women of the Corporation,” answered, “The laundry.””

Hah. If only it were that simple. Made me realize that I had to get back to the hotel and get some laundry done quickly for the next leg of the tour.

 Thought leadership, according to an alert I just received from LinkedIn, is up 5% in terms of people's skills.  Apparently 38, 710 people have attributed this skill to themselves. That seems like alot and a little. Hard to say. However, I've written here several times on the challenges and opportunities of being a thought leader. It comes in and out of fashion depending on the economy and the industry. Yet, who can argue with having new ideas and thoughts? In my line of work, thought leadership has definitely increased in importance. Communications and public relations agencies are now expected to have the pulse on new ideas and insights for our clients and the industry as it increasingly reaches the top echelons of companies. Communications is ubiquitious and can make the difference between success and failure. Bringing new ideas to the fore on how communications and reputation are transforming the world at large (including politics) is critical. What I find hard is coming up with new new ideas that break ground.  Here at Weber Shandwick, we probably outpace the industry in developing a wide range of new ideas and launching new research endeavors that back them up. Instead of relying on one or two big thought leadership efforts, we challenge ourselves to think differently every quarter. Hard stuff. But I am personally gratified to hear that 38,709 others are doing the same.

  Not sure if you were sent this article about "green" rankings....based on another article in MITSloan Management Review by Auden Schendler and Michael Toffel (you have to sign in to get the article). It is definitely worth reading but the central premise is that many of the environmental ratings focus on the wrong criteria, namely failing to incorporate advocacy activities that influence environmental regulation. What the article says is that environmental ratings should also include whether a company's political actions support or undermine climate action. From a reputational point of view, these sentences stood out:

Third party corporate responsibility ratings matter. They help consumers vote with their wallets, aid job seekers with employment decisions, affect employee morale, guide socially responsible investors and pension funds and generate good -- or bad -- PR for businesses. Research has shown that poorly rated firms respond by improving their performance.

We work with companies on rankings of all sorts. And these "green" ratings are very sought after. There is no perfect scorecard that I know about and yes, companies can game the system even when they don't deserve the reputation burnishing. What else is new? But winning them is important to reputation-buidling of credentials in the environmental space. And for those companies that are not truly green today, these environmental scorecards push them to do better and that's what counts in my book. I often tell companies to go ahead and apply for Best Place to Work awards because it gets the CEO involved and gets leadership focused on one day being among the chosen few. Even if you don't win, you usually can get your scores to determine what you need to do better. The same goes for climate change. If you don't win, that's okay. Try again next year. The article rightfully says that these rating systems should factor in other criteria such as political contributions, CEO advocacy and NGO relations. True. And they also rightfully say that these rating systems could benefit us all by spurring corporate activism "to solve one of the world's most pressing problems." True. But we should recognize how far we have come already. I remember when there was no such thing as "green" ratings. As it's been said, we've come a long way baby.