Posts Tagged ‘CEO’
I was eager to read JPMorgan Chase CEO Jamie Dimon’s Letter to Shareholders this year. Considering the London Whale episode of the past year, I thought his Letter would be revealing. He clearly did not skirt the issue. I cut and paste some quotes below which are direct, apologetic and conciliatory. Also, I used the picture from the Letter to Shareholders here because it was surprising in that it almost looked like a man running for office but mostly because it is something that we advise clients which is to make better use of photos of their CEOs and execs with people (preferably employees) and not alone in some corner office isolated and solitary. You can’t know what is going on in your company by spending too much time in the office. It derails CEOs all the time.
What I like was how he presented his lessons learned for his reputation recovery plan. They are bulleted below as follows and include a favorite piece of advice of mine — problems don’t age well:
- Fight Complaceny
- Overcome conflict avoidance
- Risk Management 101: Controls must match risk
- Trust and verify
- Problems don’t age well
- Continue to share what you know when you know it
- Mistakes have consequences
- Never lose sight of the main mission: serving clients
On Responsibility: “I also want our shareholders to know that I take personal responsibility for what happened. I deeply apologize to you, our shareholders, and to others, including our regulators, who were affected by this mistake.”
On Complacency: “Complacency sets in when you start assuming that tomorrow will look more or less like today – and when you stop looking at yourself and your colleagues with a tough, honest, critical eye. Avoiding complacency means inviting others to question your logic and decisions in a disciplined way. Even when – and especially when – things have been going well for a long time, rigorous reviews must always take place.”
On the Aftermath: “There are a few things, however, that occurred this past year that we are not proud of. The “London Whale” episode not only cost us money — it was extremely embarrassing, opened us up to severe criticism, damaged our reputation and resulted in litigation and investigations that are still ongoing.”
On Reputation Committees: “That’s why we have a risk committee framework within the firm with extremely detailed reporting and many other checks and balances (like reputation committees, underwriting committees and others) to make sure we have a disciplined process in place to question our own thinking so we can spot mistakes before they do real damage.”
On my travels, I met with the CEO of Ocean Park (disclosure: a client) in Hong Kong. Ocean Park is a theme park that promises to connect people with nature and provide memorable experiences for all. Although I had several memorable experiences seeing my first Panda and getting a personal behind the scenes tour of how Pandas are taken care of, I also had an unplanned memorable experience that had simply to do with people. After my presentation on Social CEOs to the executive team, Ocean Park’s CEO Tom Merhrmann joined us outside as we started our tour. Tom is a very social CEO as you can see in his discussion of the Halloween bash with Marketing Magazine or impersonating Elvis, let alone his presence on Facebook and LinkedIn.
When we were outside the meeting room, we quickly ran into two Ocean Park visitors who were enjoying the park. Within seconds, I saw Tom offering to take their picture with one of the girl’s cameras. I had no doubt that the visitors had no idea who he was but were only glad to have their picture taken together to create their own memories of the day. It was nice to see that how observant he was of his customers’ concerns. A few seconds later, I turned around to see him picking up some litter that had fallen to the ground. Between watching a CEO connecting with customers and picking up a speck of garbage to keep a park pristine as it could be, he reminded me that being socially-media savvy is just one element of leadership.
Love this third leadership lesson from the CEO of JetBlue, Dave Barger. Ain’t it the truth!
“Third: brand matters. I thought I was supposed to build an airline when I joined JetBlue. Not at all; it was more important to build a brand. Brand is your reputation, who you are and what you value. If you don’t establish this, your customers won’t find you to be relevant.”
I missed the news about Lenovo’s CEO Yang Yuanquing last week. I was on vacation and working hard at relaxing. It’s nearly a full time job for me and I can’t say that I am very good at it. But I tried and that is what counts. This morning in my Google Alerts, I saw this article about how Lenovo’s CEO distributed his yearly bonus to nearly 10,000 junior employees at the PC company. According to the report on CNN, recipients included receptionists, call center assistants and front line employees on the factory floor. The bonus total amounted to $3 million and was titled a “Yuanqing special reward.”
By sharing what was presumably a good year for the company, this gift to employees is one way to build CEO reputation. Normally, at least in the U.S., we would hear about CEOs who took $1 in pay when times were tough. And there were several CEOs who did this but not many. Although the Lenovo CEO earned about $14 million for the year, $3 million is no small change. Particularly so if it amounts to approximately one month’s pay for the average Lenovo employee receiving it.
No doubt that this is a generous offer from the 1% to the 99% of this company. Yuanquing’s reputation will now have a halo firmly attached to his good name.
A recent study just came out saying that CEOs think that marketers are losing sight of their jobs. In the survey from Fournaise Marketing Group, 70% of the CEOs surveyed said that marketers and communicators are disconnected from business results and are living “too much in their creative and social media bubble.” There did not appear to be a separation between marketing and communicators so I imagine that CEOs consider them one and the same. Although CEOs consider the marketing metrics of the day (Likes and Twitter followers) interesting, they do not consider them critical to advancing the business. The metrics CEOs were most interested in were market share, sell-in, sell-out and linking communications spending to gross profit and other tangible returns. As the CEO of Fournaise says, “They will have to transform themselves into true business-driven ROI marketers or forever remain in what 65% of CEOs told us they call ‘marketing la-la land.’” Quite the indictment.
This report on CEOs was in direct contrast to what we learned in our survey with Spencer Stuart on what is on the minds of CCOs (chief communications officers) around the world who believe that their senior management wants them to improve reputation and get their social media operations up to par. This made me wonder whether CEOs do not fully understand the impact that social media can have on their businesses and therefore consider it less than mission-critical today. Or whether marketing communications professionals were missing the boat altogether and picking up on the wrong signals. Like most things, I tend to think it is somewhere in-between. CEOs need to understand how the ground under their feet is shifting when any individual can harm a company’s reputation and bottom line and marketing communicators need not only beef up their business acumen but better explain the ROI on social media. The two studies provide a study in contrast, to say the least.
Found some interesting comments regarding being a social CEO. This came from a blog post from Spencer Rascoff, CEO of Zillow, the online source for information on homes for sale, etc. He was pondering what it meant to be a social CEO….
This caused me to ponder what it means to be a social CEO. Yes, it means that I participate in social media on Twitter , Facebook, Pinterest , Zillow Advice and of course on my two blogs. But it goes beyond that. It’s a state of mind. Being a social CEO means that I’m always accessible – to my employees, our advertisers, our business partners, and our users.
And in response to what happens when Zillow became a publicly-held company:
I was worried that when Zillow became publicly traded in July 2011, we might have to reduce our socialness. But I’ve worked hard to maintain a social culture even while being public. And it has been less difficult than I expected. True, there are plenty of topics that are off limits – financial results, forward-looking statements, and the like are all no-nos. But I’m always permitted to talk publicly about the company and our strategy, and to engage in discussion and debate about Zillow and the industry. I think CEOs that choose not to participate in social media by pleading “we’re a public company” are being cop-outs. If they don’t want to use social media, that’s fine. But don’t blame the lawyers.
The point is that being a social CEO is a state of mind.
In an interview with the CEO of Google, Eric Schmidt opines on the future of search. He makes an interesting predicition in the wide-ranging interview. Schmidt says: “…apparently seriously, that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites.”
This notion of name-change raises interesting questions about reputation if we can disown our youthful indiscretions and misguided ways from the past. If reputation can be altered or amended at the magic age of 18 or 21, how authentic can reputation really be? I wonder if the younger people he is talking about are now more careful about their actions, relationships and words because they know deep down that we are all indexed somewhere. To give younger people a digital eraser as they enter adulthood might just keep them (not all) from properly shaping their moral character and understanding that there are consequences to what they do.
Of course, I would very much like to think that everyone gets one free pass sometime in life and could opt to wipe out one past error or misstep but I think that given the choice, it would be agony to pick just one! Also, there seems to be an entire business devoted to burying those misdeeds so not sure changing one’s name is necessary.
Author and columnist Thomas Friedman wrote today: “In this kind of world, leadership at every level of government and business matters more than ever. We have no margin of error anymore, no time for politics as usual or suboptimal legislation.” Leadership matters is one of the cornerstones of great company reputations. There is no getting around it. The destiny of the CEO is inextricably linked to the company’s reputation. If you have ever worked with a CEO who was not the right fit for the company and who worried about themselves more than the company, you know the damage that the wrong CEO can do. It is almost better to work for a so-so or good, not great, CEO than the wrong one.
Also in today’s New York Times’ business section is some advice from the CEO of The Calvert Group, Barbara Krumsiek . She was asked for her best advice to executives starting out. She said to ask each executive on your leadership team the following question, “Tell me about your job, but now tell me about what you think you do here that is not in that job description that you think is really critical.” Good starting out question but I actually like the second question better, “Tell me one thing that’s going on at Calvert that you think I don’t know that you think I should know.”
The best advice for CEO newcomers is that there is no such thing as a stupid question. One CEO told me that. You get about 3 or 4 months to ask those “stupid” questions.
Getting back to the importance of leadership, we don’t need Thomas Friedman or even me to relay this important news about what drives the global economy and business today — good leaders. Every day we get examples of the impact of good and bad leadership. Unfortunately there are so many examples of bad leadership decisions that we forget to notice the daily good deeds of many company CEOs. Is too bad. The margin of error might actually be wider than we think.
My journeys in Europe continued all week although I am now safely home and enjoying the first warm weather of the past two weeks. One thing that struck me in retrospect was that there was no market that did not talk about recession-weariness. Everyone mentioned how tough times had been with the global recession and might be getting worse as Greece faced its debt crisis, the EU bails out several members and the Euro was dropping. My presentation on The New Normal was perfectly timed.
- In Amsterdam I learned that some companies were rising to the challenge of the recession. Dutch airline Martinair had offered a similar program to Hyundai Assurance in the US where people who booked transatlantic flights could cancel their flight without cancellation fees if someone lost their job. It is called Boek Gerust Verzeking or worry-free booking insurance. As well, the CEO of KLM, Peter Hartman, was applauded for going on YouTube to sympathize and apologize about the flight cancellations caused by the volcanic ash a few weeks earlier. A perfect example of CEOs resetting their reputations. In addition, several people in our panel discussion mentioned the book The Truth about Ikea when we discussed this new “tell all” and “see thru” world that has emerged. I also learned about an online site where you can “couch surf” or find a couch to crash on in another city so you can save some money. Smart alternative to paying for a hotel if your finances are strained. The Dutch also have a group buying site — ichoosr.com – and their CEO had joined our panel to discuss the site’s success in this new age of austerity or what we were calling the New Normal.
- In Paris, at our luncheon discussion, one of the guests mentioned that they were moving their communications and marketing back to print since they were not convinced that the ROI online was working as well as they would have liked. Also had my first experience in Paris being interviewed in-person by bloggers. Turned out to be quite a lot of fun. This fits into my prediction that face-to-face communications will be back as a new channel for communicating.
- London was fascinating because I arrived the evening when the new coalition government was announced. The first day of the “new politics” or “plural politics” was brisk and spring –like, the perfect day for a new beginning. In our breakfast seminar, it was hard not to discuss what the new governance model in Great Britain meant but one idea I had was that the future would undoubtedly include more coalitions in business partnering over the next few years. Additionally, I thought that the outcome of the election was indicative of the new normal in that there were no winners and losers (except Gordon Brown) but something in-between. Not black or white, but just grey all the time.
- I could have sworn that Heathrow airport in London is scented. I could not believe my nose! There was a great scent in the air and although I can not find an article on why it smelled so therapeutic (aromatherapy), I think it might just be the air from the spa facilities inside. It is a great idea if it is true.
- Madrid had just heard their Prime Minister Zapatero talking about civil service workers’ salaries being frozen, pensions cut and other budget-minded recourses when I arrived. Like other cities, people instinctively knew that frugality was back with a vengeance. I had read in the paper before I arrived that Zapatero had said it was the toughest speech he ever gave. I considered that quite humble although I doubt most Spaniards felt the same way upon hearing the news. In the world of reputation, leaders get all the credit when things go right and all the blame (and then some) when things go wrong. An interesting experience during my media interviews was that each journalist asked me what I thought the future of journalism was. I think this happened everywhere I went when journalists took the floor. The reputation of journalism is sure taking a hit in this new digital world. I recall in Brussels how a journalist said that online was killing them off one by one. Is a global phenomenon and one I have a lot of sympathy for.
Now that I am back on solid ground for a few days and not spending my days and nights in airports and hotels, I can more easily get back to posting more regularly about reputation matters. However, reputation is everywhere. Danny Rogers, the editor of PRWeek in London wisely pointed to the frequent mentions of the word “reputation” in media coverage. It was not always like that. It is unavoidable these days.
I had a great time with my colleagues at Weber Shandwick and meeting clients and journalists, bloggers, among others. Mind-expanding is good for the soul.
Some reputations rebound. Today’s New York Times describes how Starbucks’ reputation is bouncing back. One of the drivers of that recovery came from its CEO ceding control to employees. In Seattle, employees held brainstorms that surfaced ideas to turn the ailing company around once CEO Howard Schultz told them to just do it! — break the rules and figure it out for yourselves. You have permission. Schultz gave the okay but employees took it on. As the article says, founder Schultz was determined to give its coffee chain “ a dose of the urgency, nimbleness and risk-taking of a start-up company.” Employees took on the risk of failing and the hunger to win. Not easy to do in a tough economic environment like this. What happened? A new Starbucks-owned coffeehouse arose that doesn’t resemble the typical mass produced furniture Starbucks look. Instead it heralds back to the coffeehouses of yore with its own local flavor and style. I like the big communal table with sockets in the center. The coffeehouse described in the article is 15th Avenue Coffee and Tea and sells microbrew beers, espressos, cheese and baguettes. A turnaround takes more than baguettes but is clearly in the works.
Good to hear that Schultz is listening to employees and customers who are helping to oil the turnaround gears. As we know, turnarounds take some time so we’ll be hearing more as time goes by.