We keep on top of new CEO announcements and what we can learn about CEOs' first 100 days or so. When we meet with new CEOs, we like to provide recent best practices and new ideas. Was recently reading about a new CEO at a healthcare company who set a different tone by not using the chauffeured SUV the previous CEO used and downsizing the CEO's office staff. But more interesting, the new CEO took questions from the cafeteria as he went on his employee listening tour. What a great message. Instead of putting a hold on a large conference room for a town hall meeting, the cafeteria (if you have one) can send the perfect message. Cafeterias are like the town square or village green after all. People run into people they have not seen in a while or find themselves chatting with someone they have not met. It is familiar to everyone, from the mail room to the corner office. I also think CEOs who have cafeterias should spend more time there getting their food on a tray, paying for it like everyone else and sitting at a table with people he or she might know. And just shooting the breeze. Plenty to talk about these days -- deflated footballs, the weather and new TV shows. And just think of all those selfies you can take with the CEO!
The Conference Board comes out each year with their CEO Challenge where they identify the top issues on the minds of CEOs, presidents and Chairmen. It is always interesting to see what rises and falls year over year. This year CEOs have a lot on their minds -- leading the list is human capital, innovation and customer relationships. Nice to see customers rising to the top since sometimes they feel forgotten. Out of 10 challenges, trust in business ranked 10th among all those polled.That surprised me because the reputation of business leaders could use some boosting.
As I was pondering this low ranking for trust, I came across an article by Fortune's managing editor Alan Murray reporting from Davos. Murray said that he felt something different in the air this year and he should know -- he's probably attended many. He said that he could tell that business leaders were taking their social responsibilities more seriously. He cited the example of Aetna's CEO Mark Bertolini who came out this past week in support of a living wage. Bertolini noticed while digging through reams of data that a proportion of his employees were just barely making a living (single moms earning $13/hr) and in fact had to resort to food stamps to support their families. He also realized that having the right talent was going to be the killer app for his business as they shift more towards consumers. So for about 12% of Aetna’s work force, Bertolini announced he is raising salaries to a floor of $16 an hour. This policy is aimed primarily at Aetna employees in customer service and billing-related jobs (WSJ). Bertolini made a monumental difference to many workers' lives at his company and also helped to restore credibility and trust in business. He also put a lot of other companies on notice. Why? He argues that by providing a living wage, Aetna can attract and retain a better workforce and better compete for the future. This is thought leadership in action and I believe that this is a good start towards building trust in business leadership and building back reputation for our business sector. A fine leadership moment.
While I am on the subject of trust, I thought I should add that I am honored to be selected for a Lifetime Achievement Award from Trust Across America as a Thought Leader. Trust comes from building a good reputation and being mindful of it every day. Reputation is about character in action and I hope every day to make a difference in building trust in business and leadership. So I am honored and humbled and confident that the future of business leadership will be brighter for all.
Disclosure: Aetna is a client of Weber Shandwick.
Saw this mention of the CEO's letter on Twitter. This is from Tony Fernandes, CEO of AirAsia, and founder and owner of the airline which crashed in late December with 162 people aboard. It was flight QZ8501 and they have recently found the black boxes meaning we will find out more. But the person who posted this letter from the CEO was extremely thankful and moved. Thought it was worth noting here.
As I mentioned in my reputation trends for 2015, thought leadership has become the new sustainability in a way. As I said, the term’s presence on the Internet grew 65% from one year ago and a whopping 707% since 2011. That's all I practically hear these days. For that reason, I like to look at CEO ads in The Economist (hard copy reading on the subway--I know, so 2000!) to see what the requirements are for getting into that corner office today. Among the requirements for Group Chief Executive Officer at Ecobank is the following:
- A reputation as an industry thought leader in strategic development, communications and execution
It is everywhere.
Allianz issues an annual risk report and it is fascinating to see how risk changes so suddenly. The top risks according to 500 risk managers and corporate insurance experts in 47 countries are business interruption and supply chain (#1), natural catastrophes (#2), and fire and explosion (#3). The biggest movers in terms of ranking on the risk scale are (no surprise!) cyber and political risks. It has been quite the year for data breaches and political unrest. Cyber risk itself moved up from 8th place last year into the top five this year. The damage caused by a data security incident, according to the report, is now estimated to total to $720,000 and from a targeted attack, up to $2.54m (Kaspersky Lab). The main reason behind this substantial economic loss caused by cyber risk is loss from reputation (61%), followed by business interruption (49%) and damages paid due to loss of customer data (45%). When people hear about a cyber attack, it has the unfortunate side effect of driving customers away and thus hurting the bottom line. People assume that the company was caught asleep at the switch, not well-led and unconcerned about their customers' privacy. All in all, the company's reputation loses face.
Disturbingly, cyber risk is the most underestimated risk by businesses in 2015. It is also expected to continue to be the number one risk five years from now although 10 years from now, climate change is expected to top the list. I guess that indicates that cyber risk will be under control and solutions will be found. What worries risk managers the most when it comes to cyber risks? -- data theft and manipulation (64%), reputational loss (48%) and the threat that the hacking will just keep on happening (44%).
As you can see from the chart above, reputation and brand loss ranks #6 overall and for many years of the study continues to rank at the top. Reputational aftershocks are pervasive.
Lately, it seems to me that every day brings a different teachable moment to those of us worrying about reputations and communications. Recently I had been following the heartfelt tweets of CEO Tony Fernandes of AirAsia.
Yesterday's acknowledgement by President Obama about not sending someone more senior to the Paris peace rally last Sunday was the right thing to do. I had wondered myself about how this could have happened while being glued to the television set. It made me wonder about the discussion the communications team must have had with the President about sending a higher-ranking individual to attend the march while all those world leaders were taking center stage. Do you say something that you think can potentially harm a boss's reputation or do you let it just slide (hoping nothing harmful happens in the end)? Hopefully the former. President Obama's spokesperson Josh Earnest took the message to the people yesterday by saying, “It’s fair to say that we should have sent someone with a higher profile to be there." Although I assume that he was talking about the royal "we" and that the President approved the statement, it was not an outright apology which would have started with "We regret..." Instead, what we got was more a statement of fact. Despite the misstep, the acknowledgement was honest and swift and may have slowed the criticism to some degree. I thought it was good that the President admitted he erred and showed he could be wrong and could change course. Some leaders would have been insistent that the individual sent was high enough and what was all this commotion. I also learned while reading about the error that Obama had visited the French Embassy in Washington DC last Thursday to sign a condolence book which made me feel better in the end.