Posts Tagged ‘CEO reputation’

I have to say that the headline in today’s WSJ re the $2 billion trading loss at JPMorganChase strongly resonated with me. The title is “J.P. Morgan Trades in Its Crown.”  In our research on safeguarding reputation, we start out by summing up reputation failures among the world’s most admired this way:

 

“The last decade has seen many of the world’s most admired companies descend from their once lofty positions. They were in a class by themselves — corporate reputation royalty whose invincibility was universally accepted by business executives around the globe. No one could have predicted that these companies would ever part with their crowns. How the world has changed!”

 

It looks like we now have another major kingpin to add to our Weber Shandwick “stumble rate” analysis that we calculate every year. You can find more about it in an earlier post.  But…between 2011 and 2012, 49% of the world’s largest companies experienced a reputational stumble, up from last year’s 43% but exactly the same as 2010’s rate.  There seems to be no more untouchables among the Fortune 500 with this recent news.

 

I was also intrigued by Jamie Dimon’s remarks about what he could have done differently to have caught this $2 billion blunder earlier. Dimon’s deadpan answer was paying more attention to the “newspapers” among other things. He was referring to earlier reports in the papers about the trading problem. Have to hand it to him for taking the blame and being brutally honest in his response. He’s been true to his reputation on that count.

“In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored. The portfolio has proven to be riskier, more volatile and less effective an economic hedge than we thought.”

Another side note of interest is that this reputation crisis did not start in social media. It has certainly taken off online but as far as we know now, there's been no social media assault that instigated this crisis. No online cloak and dagger here.

Will be interesting to see how this pans out reputation-wise. Will this tarnish the bank’s reputation for the long-term or just be a stain? No doubt it will be headline news for a while. Dimon is eminently quotable --the WSJ has his most notable quotes already listed. I hate to have to say it but another one hits the dust.

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.   .

Thought I would check out Pinterest and see if anyone was posting on reputation or CEO reputation. Why am I not surprised that the pickings are slim.  Pinterest is not exactly the place where people want to pin interesting items and favorite photos or sayings on reputational matters or CEO quotes. But I had to take a look. For "reputation," there are a bunch of quotes and the same infographic over and over. Seems to be a favorite. It is about how to manage your personal e-reputation and its from a reputation management agency in Geneva. Good for them. As for CEO reputation, there are two items pinned of photos of people.  But mostly a non-pinterest event.  Thought I'd see a little more but no. Infographics seems to be popular on pinterest. They add visual splendor.  I have a pinterest account but never started it. I might just do that today. Might be fun. We will see.

  Because I am off from work for the holiday, I have a little time to catch up on things I meant to read in the months before. I was particularly interested in some research on CEO transitions and its impact on the value of the enterprise conducted by FTI.  A few facts jumped out at me from their study among the financial community. They found that one-third (32%) of investor decisions are impacted by the reputation of the CEO. Moreover, the reputation of the CEO was more important to investors than the reputation of the company's products and services. The research covers the value at risk depending on what type of CEO transition occurred. The greatest risk to the enterprise is when a CEO is forced to resign. Because of my work on CEO tenures and how to build CEO reputation, the findings confirm my own research over the years that CEOs need to show success by that 12 month marker. FIT found that investors give new CEOs about six months to assess the challenges and opportunities facing the company, setting a vision and strategy.  They give new CEOs more leeway to improve market performance and valuation -- about 12 months. After the first year, all engines need to be firing. Another particularly interesting finding was what investors look at in their first 100 days to further establish the CEOs credibility in their eyes....here is what they said was of "significant importance." Despite the ranking for "charisma," it is still interesting that it is still estimated to be of high importance and only 16% said it was of limited importance.  FTI concludes that investors take a multi-dimensional view of new CEOs. They expect to see it all.

During First 100 Days Of A New CEO	“Significant importance”
Grasp of the company’s challenges and opportunities	96%
Knowledge of/experience with industry dynamics	92
Vision	88
Operational focus	88
A strategic plan	88
Leadership style	76
Charisma/personality	54

 FTI Consulting  

Interesting to hear that The Wall Street Journal is outright asking subscribers how the Murdoch scandal at News Corp might be impacting its own reputation. Many companies prefer not to bring up an issue they are facing, even when it is often the elephant in the room.  Some companies, however, think that surveying customers about an issue or self-inflicted crisis is a smart way to demonstrate that they care enough about their reputation to ask the tough questions or they simply want to know in the name of transparency.  Apparently the WSJ is asking subscribers, of which I am one, "What impact, if any, do the illegal acts by News of the World journalists have on your impression of The Wall Street Journal?" or something close to that. And my favorite question from what I have read this morning is whether the CEO of a company should be held responsible "for all the actions of all its employees, no matter how large the corporation is" on a 1 to 10 scale (disagree completely --->agree completely).  I think I know the answer to that one. My guess is that 75% to 85% of subscribers, AKA business executives, will give this statement an 8/9/10.  All in all, as my colleague said to me....a brave move.

  How much does charisma affect leadership reputation today? It seems to be an age old debate. Too much? Too little? Just about right? When we asked this question years ago in my research on how to build an enduring and long-lasting CEO reputation, we learned that it is was important --  better to have than not have.  Charismatic leadership is not what you say but how you say it.  It’s not just what leaders communicate that makes them charismatic; it’s what they elicit from others. I think I read this somewhere and it stuck in my mind. Among the new breed of CEOs today, a quieter charisma is now more important. It is not about CEO celebrity but building CEO credibility. Maybe we should call it "slow charisma." Credibility or authenticity coupled with charisma can be electric.  When you see it, you know it. However, it is not all there is to leadership. Leadership also includes sound judgment, ethical conduct, the ability to listen and serve others. Lets not kid ourselves. The Economist just wrote an article about what we can learn from Lady Gaga and Mother Teresa about leadership. Apparently there is a lot to learn.  The article infers that brilliant and flawless communications helps enormously, particularly with these two charismatic (in their own way) women.  Here is an excerpt.

Mother Teresa was a “PR machine” who, whether talking to a dying leper or a rich donor, “always left her imprint by communicating in a language the other person understood”. Lady Gaga is “one of the first pop stars to have truly built her career through the internet and social media.  Lady Gaga has what Messrs Anderson, Kupp and Reckhenrich call “leadership projection” and a layman would call charisma. The authors think this is because she tells “three universal stories”. First, a personal story: who am I? (She stresses that she was the weird kid at school, but driven to be creative.) Second, a group narrative: who are we? (She calls her fans “my little monsters” and herself “Mama Monster”, and she communicates with them constantly via Facebook and Twitter.) And third, a collective mission: where are we going? (She promotes gay rights and celebrates self-expression; she tells her fans that together they can change the world.) Lady Gaga has the “ability to build emotional commitment” in those she leads, says Mr Reckhenrich. This ability is increasingly valuable in today’s business world, he believes. In “The Fine Art of Success”, a book he and his co-authors released last year, they examine it at length. They are now working with Egon Zehnder, an executive-recruitment firm, to figure out how to identify whether candidates for top corporate jobs have the ability to “project leadership” the way Lady Gaga does.

Charisma can be critical when a leader has to deliver an important message, whether the individual has it or not. I think former President George W. Bush demonstrated charisma when he faced the nation after 9-11, both on television from the oval office and when visiting the site of the World Trade Towers site in New York City. All eyes were on him and he delivered, as required.  However, that charismatic leadership soon faded with the war in Iraq and debacle of Hurricane Katrina because the empathy, emotional connection and authenticity were AWOL.  Former President Clinton has it in spades. President Obama has it and especially when he puts it to good use. In this day and age, it is not enough for CEOs to bark orders or to manage the bottom line only. Being able to deliver meaning and purpose along with a dose of slow charisma and empathetic communications is required. It is a tall order, I know.

  Last night I was asked how long I had been blogging. I threw out a number without thinking about it.  However, since I was not sure, I went online to determine how long it might actually be and I was curious about whether I had hit an anniversary of sorts. Should I be celebrating my 5th or 8th or 10th year anniversary of blogging about reputation? My first web site was CEOgo.com.   I defined it as "The premier site on chief executive officers, leadership and management trends." Actually, there was no other comparable site so I could have easily said it was "The site on chief executive officers, leadership and management trends."  CEOgo is no longer live since it was closed down after I left my previous position and I joined Weber Shandwick, starting anew with reputationXchange.  I started CEOgo in February 2000 (according to when it was registered) which answers my question on how long I've been blogging -- 11+ years. Who would have thought I had so much to say on CEOs, CEO reputation, corporate reputation, CEO transitions, leadership and all things reputation-related. CEOgo was the site to go to on CEO turnover, whether CEOs were insiders or outsiders, average tenure, reasons for departure, reputation-building, etc.  It certainly chronicled my thought leadership in this area and eventually rolled itself all up into my book, CEO Capital. And although much has changed (the more common division of the Chairman and CEO role for one), much has stayed the same. It is among the hardest jobs there is, next to being President of the U.S. I have anniversaries on my mind today because I am looking at my five-year anniversary at Weber Shandwick. Although I like to think that annniversaries come and go and corporate life has its good-and-plenty ups and downs, I have to say that my past half decade at Weber Shandwick has been fulfulling, productive and full of pleasurable surprises. The leadership and collegiality are truly the real deal and I am thankful for what I have been encouraged to accomplish. And I have also been lucky enough to work with Liz and Jen who make all the difference to my ability to face those very early mornings that are my habit. It is important not to let important milestones just pass -- whether 11 years of blogging about reputation or 5 years at Weber Shandwick. I consider myself lucky.

Came across an interesting statement about CEOs this morning. It was in a Justmeans  blog post about how CSR needs to get more humanized, meaning making a stronger link between the CSR director or manager with a company's CSR initiatives and thereby giving it a face. The author Akhila Vijayaraghavan wrote:

This year will see the beginning of a shift from CSR itself to the CSR practitioner. Just like brand image is beginning to collate itself with CEO image, so will CSR with the CSR practitioner/manager. I believe this could be an important trend because putting a 'face' on CSR makes it not so 'corporate'. CSR practitioners deal with far-reaching environmental, social and ethical issues on a daily basis that are profoundly human. Taking the corporate out of CSR will bring to the spotlight of what the people in businesses are really capable of . This is a good thing not just for CSR but also CSR practitioners.

As a long-time CEO reputation watcher and if I understand what she meant in her post (people often speak about brand and corporate reputation/image in the same breath), brands -- not just corporations -- will increasingly be linked with CEOs. For many years, the research I did found that nearly one half of a company's reputation was tied to that of its CEO. However, the reputation of the brand was not as tightly correlated until the Internet came along and changed the game. Now that anyone anywhere can find out the parent company of a brand and also who its CEO is, that is most probably changing. And I expect it will change quickly.

  In an interesting take on reputation damage control regarding the new movie (The Social Network) about Facebook's founder Mark Zuckerberg in the Wall Street Journal Buy Menadione Without Prescription,  today, I came across the following quote by the producer Scott Rudin about Facebook's involvement. Menadione withdrawal, snort, alcohol iteraction,  "They were trying to figure out a way not to tie Mark's personal identity to the identity of the company. Because they were and are talking about an inevitable IPO and clearly want the company to be bigger than Mark Zuckerberg."

There is no way that Zuckerberg's personality is not tied to the company, online buy Menadione without a prescription. Purchase Menadione online, When it comes to founding CEOs and when it comes to companies in the technology industry, the link is inextricable and unbreakable, rx free Menadione. Buy Menadione online no prescription, It is a double whammy when the product, in this case Facebook, australia, uk, us, usa, Order Menadione from mexican pharmacy, is so stupendously successful. It would be nice if this were not the case but there is no arguing about this, Buy Menadione Without Prescription. Think about Steve Jobs and Apple, reasons to buy Menadione online, Where can i order Menadione without prescription, Bill Gates and Microsoft, Larry Ellison and Oracle and Scott McNealy and Sun Microsystems, Fort Worth, Texas. Denver, Colorado, Buy Menadione without a prescription, to name a few.  That's the way it is. Each of these is endlessly interesting in how these young men started these colossally large firms and changed the industry forever, Menadione coupon. Kjøpe Menadione online, bestill Menadione online, Yes, the company is bigger than Zuckerberg, online buying Menadione hcl, Menadione samples, technically-speaking. But as I have said so many times before, buy Menadione no prescription, Baltimore, Maryland. Milwaukee, Wisconsin, the CEO or founder is the public face of the company and no more than it is in this new and exciting social media age. It has a storyline with grand proportions which is why a book has been written and a movie made, buy no prescription Menadione online. Menadione FDA approveds, I thought that the New Yorker interview with Zuckerberg added further dimension to the founder's personality and probably counterbalanced some of the negativity that is in the newly released movie.

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