CEOs and CSR: A Mismatch?

Last week I was in Berlin speaking at Humboldt University's Conference on Corporate Sustainability and Responsibility. It was the 6th annual conference convened by the very admirable and scholarly Professor Dr. Joachim Schwalbach. I was a little embarrassed because he kept telling me how well-known I was my reputation work and how people were attending to see me!

I had been asked to keynote a morning session on CEO Reputation, CSR and Thought Leadership and participate in the panel discussion afterwards. The panel focused on the importance of CEOs in the world of CSR and sustainable practices. If you want to read more about the conference, please read Elaine Cohen's synopsis which does a terrific job summing it up. She is a much better note-taker than me. Elaine was the moderator for two of the panels I was on and she did an excellent job making them compelling, stimulating and useful for attendees.  She blogs and runs her own social and environmental business consulting firm, specializing in CSR strategy, reporting and assurance. 

For my part, I spoke about the importance of CEO reputation when it comes to CSR. As I see it, CEOs are responsible for assigning their resources to different strategies and pathways. If the CEO wants to commit to sustainability and make the resources available, it will happen. If not, the CEO might just make sure that a CSR report is written and distributed and call it a day. 

The panel that followed my keynote was lively. One of our panel members was a senior executive from Egon Zehnder, the highly reputable executive recruiting firm. We all gasped when she told us that CSR capabilities, expertise, and interest are not qualities that companies ask for when looking to hire CEOs. As Elaine quoted her in her round up, "Instead, CEOs are hired for traditional qualities such as decision-making, P&L orientation, experience, profit maximization etc." It was a rude awakening to a CSR-fest audience and unfortunately, I do not doubt what she said. My sense is that boards spend more time focusing on what the CEO candidate can deliver to the bottom line than how many CSR reports they've signed their name to.  I am not that naive to think that financial performance is less important that CSR. However, the stark realization that CSR is not on board agendas when looking for new CEOs was crushing to a room full of do-gooders (hate the word but you get my drift) and believers.

To my disappointment, CSR has always been a laggard when it comes to what drives corporate reputation. For the many years that I have studied corporate reputation and CEOs, the leading criteria are quality products and services, financial performance, management quality, the ability to build and lead teams and having the right stuff to motivate others. Honest and ethical conduct also figure high in the list of what matters. CSR usually falls in the bottom tier of drivers no matter how important it has become over the past decade and how important it should be considering that the planet is spinning on borrowed time. 

Here is what I think. It still might not be at the top of the list of drivers for executives, boards and other influentials but it is becoming critically important to future consumers. Responsible consuming or buying products and services based on being a good corporate citizen is only going to increase over time as our resources stop replenishing themselves and the younger generations begin populating our ivory towers. The Millennial generation will have to see to it.  When that happens, it will matter to boards of directors and subsequently to those in the CEO consideration set. Time will tell. 

 

Saving your reputation

I am always looking for quotes and just found two today. They appeared in an article in The Guardian about how charities or non-profits can manage crises. Here they are:

"The 17th century bishop Joseph Hall shrewdly noted that 'a reputation once broken may be repaired, but the world will always keep their eyes on where the cracks were.'"

"Brand is a promise to your stakeholders. It embodies what you want them to believe about you. Reputation, on the other hand, belongs to them. In short: brand is how you talk to the world, reputation is how the world hears you."  Vicky Browning, director of CharityComms

The article was based on a panel held in London and the key advice about managing a media crisis for charities who are caught up in the public glare when crisis strikes:

  1. Understand your risks
  2. Respond proportionally to the intensity of the crisis
  3. Be prepared
  4. Know what you can control and what you can't 
  5. Monitor and measure perceptions
  6. Become the expert and authoritative source on the issue 
  7. Respond quickly and with sensitivity (empathy!)
  8. Involve your employees, keep them informed
  9. Invest in reputation before you need it
  10. Stick to your messages

These reputation remedies could apply to any crisis -- be it a for-profit or non-profit. The one that struck me as an interesting nuance which I had not thought about in a while was reacting in proportion to the crisis event. Sometimes just a statement on a website will suffice whereas sometimes the CEO needs to call a press conference and provide regular updates. Knowing when the CEO should visit the site of a crisis and when not to requires good judgement and good counsel from crisis experts. Over-reaction can intensify a problem.

The nature of the response reminds me of an incident that occurred this week. Chairman Rupert Murdoch of 21st Century Fox made an $80 billion takeover bid for Time Warner and Time Warner's CEO Jeffrey Bewkes responded. Instead of a media statement, no comment, CEO email or other response, he chose to produce a three minute video directed at his employees using the medium that the company has excelled in during the past few years -- digital media. The video begins with “Hi everyone. I wanted to speak directly to you about the news you’ve been hearing today about our company.” Short and simple and appropriate to the situation. Here's an example of taking control of what you can when your company is in the public eye. Bewkes got his points across, took little time out of employees and other stakeholders' time and was personal, conversational and direct. In a way, he discounted (dissed?) the takeover bid by appearing on the small screen. Good choice. 


Leadership presence in 3D

Sylvia Ann Hewlett has written a new book on executive presence. I've always been very impressed with her work and how in-depth and comprehensive it is. As an economist, she has written about female talent, finding sponsors or mentors for your work, career on- and off-ramps and mixing motherhood and work. Her new book is titled Executive Presence: The Missing Link Between Merit and Success.  There's a good interview with her in Forbes written by Moira Forbes where I read what she had to say on the topic of what leadership material is. Hewlett's research among senior executives, particularly women, found that executive presence is critical to success and the three factors driving that climb up the ladder are appearance, communications and gravitas. This makes perfect sense although I believe that a great deal more goes into earning the top spot, the CEO position. I have met a CEO or two that does not have executive presence in the full sense but runs their company famously well. All three drivers, whether we like it or not, do matter today for executives because we are all now public figures. 

Nearly two-thirds of executives say that gravitas (love this word) is critical because it causes others to follow you and trust your vision and leadership. This is why there is an entire industry of executive coaches.  Gravitas can be learned I suppose.

I spend a lot of time thinking about what it takes to drive an excellent CEO reputation. I think it is a combination of strategic smarts, ethical conduct, ability to inspire and motivate others, solid communications skills and an eye on the future. A sense of optimism and humility also go a long way because it is a job with lots of twists and turns that can easily derail confidence. 

Talking about executive presence, here's one for the books. Narendra Modi, the new prime minister of India, used quite the new channel to communicate with the world's largest electorate and rally support. He sent a 3D-hologram to nearly 1,500 remote locations in India to earn their votes at election time and get his messages across without being physically present. His presence was "greeted with a mix of awe and disbelief. Many poorly educated voters had stayed behind after rallies to check behind the dais to see if he was really there, officials said." You could say this is the opposite of gravitas, it is pure lightness. 

Reputation Datagrams

Twitter-CEOology

I made a slide for safekeeping of this comment. I thought it was a mirror of the times ahead. Not only do CEOs and other executives need media training but they have to be able to speak in tweet-sized bits like the CEO of one major marketing services holding company that was recently in the news.  When it came to the failed merger with another several weeks ago, he said the following when asked by a journalist:  “If I had to summarize in a tweet, it would be, corporate culture, complexity and time.” In a google search, it turned up over 80,000 mentions. It sure did travel.

Social CEOs

On a related topic, the president and CEO of Tangerine Bank (formerly ING DIRECT Canada), Peter Aceto explained why CEOs should blog in Forbes. He starts by saying there are three reasons why – reputation, inspiration and pride. [He also cites our research on Social CEOs] He rightfully makes the argument that if you want to inspire your employees to go the extra mile to help build the best company reputation, do something that instills pride and inspires them to be as productive as they can be. One of those ways is through leadership embracing social media to be the best leaders they can. Aceto makes some other arguments which I wholeheartedly endorse:

  • Successful leaders are no longer measured by stock price alone 
  • Own your story and tell it through whatever means you have (be it face to face, social or symbolically)
  • What you don’t do can be just as visible as what you do in fact do (love this because it is so true)

Being able to think in 140 characters – the length of a Tweet – is a must have for CEOs today. In fact, it is a discipline that ought to be practiced regularly in order to distill what your company is all about and what your vision is that adds meaning and purpose to your reputation every day. We used to say that CEOs needed to be practiced in their elevator speech – a few sentences that encapsulate what a company does or why it exists. Now we are down to 140 character datagrams that shape reputation.

CEO sucession and assorted reputation things

A few CEO related items that I came across this week. I decided to bunch them altogether in one post ...in the name of efficiency. 

  • I was reading an article from David Larcker and others in the Stanford Closer Look Series. I met David years ago when he was at University of Pennsylvania's Wharton School and he helped me draw a correlation between the rise in CEO reputation and business performance. So I am indebted. He recently wrote Seven Myths of CEO Succession and in his first myth, he writes that most companies know who their next CEO is (WRONG). Well, surprise surprise. In research done by the Corporate Governance Research Initiative at Stanford University Graduate School of Business and which he is a Director, only 54% of companies report grooming a potential successor to the current CEO and 39% say that they have no viable internal candidates to replace the CEO if it should happen that moment.  I was also intrigued by another myth which was that Boards know how to evaluate CEO talent (NOT EXACTLY). In another study conducted in 2013 with The Miles Group and the Rock Center for Corporate Governance, the report found that Boards place considerable emphasis on financial performance (such as accounting, operating and stock price results) when it comes to CEO performance evaluations and not enough on non-financial metrics (such as employee satisfaction, customer service, innovation and talent development). From experience, the latter can make or break a CEO's successful tenure and should not just be considered a nice-to-have.
  • Brandfog came out with a second study on social CEOs. It is among 1,000 employees in the U.S. and U.K. and results in the U.S. are compared to a similar study in 2012. The study found that social media engagements is perceived to make for better CEO leaders -- only 45% of US employees thought this in 2012 whereas in 2013, the figure was considerably higher at 75%. Also, 82% of employees believe that CEO social media engagement helps to communicate company values and shapes a company's reputation. I'd have to agree. In addition to social CEOs being seen as more transparent and trustworthy, it is seen as an effective way to prevent crises and mitigate risk by nearly 80% of those surveyed.
  • Also found this useful article on how to get nonprofit CEOs to be more social. 

Reputation Call-Outs for the Week

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Woefully, I did not get to write this week. It just flew by with meetings and work to be done. And here it is Saturday again and I'm catching up with my work and eager to get to work on my blog. I saved a few things from the week to write about because they all are reputation-related in some way. Here they are:

  1. I was very pleased to see the squarespace advertisement early on in the Superbowl last Sunday night. The feedback from what I understand has been positive. This blog is written using squarespace and I think their sites are beautiful and easy to create. They are a reputation-polisher.
  2. For all those new CEOs and executives out there, some timely advice from Fay Vincent, president and CEO of Columbia Pictures Industries in the WSJ. He has 10 suggestions for those in charge. Some are tried and true and worth repeating such as (#2) Be sure to manage down, (#4) Keep listening to and for advice and (#7) Never complain, never explain. Vincent says he wishes someone told him these when he started at the top.
  3. Talking of new CEOs, the new CEO of Microsoft was named. His introduction to the world was nicely done (check it out as a great First 100 Days strategy) and enhanced his down-to-earth reputation. I especially liked his email to employees on day one. You can tell that the new CEO, Satya Nadella, likes to read poetry from reading this email. It is simply stated but oh so well-written with a melodious cadence and authenticity. Right out of the box, he mentions how humble he feels being named to the honorable task ahead of him. He then describes himself and his mandate in four sections -- Who am I? Why am I here? Why are we here? What do we do next? The answers to all these questions are undoubtedly what employees want to know. Nadella had one paragraph that I found especially appealing and worth calling out. He wrote: "Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this." This is a great message because we are all accountable, not just leadership. No one can just sit back today and wait for permission to act.
  4. At the start of the week, the NYT columnist Andrew Ross Sorkin called for an apology cease-fire. He says that the avalanche of in leahttps://twitter.com/search?q=%23apologywatchdership apologies are calling into question their sincerity and turning into apology-theater. I too follow how apologies have become de rigueur for reputation repair. They are expected, whether they are mere performance art or the real thing. They have become habitual. Sorkin and management guru Dov Seidman have started an Apology Watch on DealBook and started #ApologyWatch on Twitter.  They will be looking at what companies do post-apology and keeping them honest. Poor reputations, beware!

 

how to build a reputation for thought leadership

The term "thought leadership" has become ubiquitous. I confess to being guilty of using the buzzword. I call myself a thought leader and tell people who ask what I do that I do thought leadership for a living. People seem to understand but I might just be talking to people in my industry or perhaps to the overly-polite. Years ago I defined "thought leadership" when I wrote a book about the importance of building CEO reputation by having something to say about the future instead of talking about your company's products. Fast forward to today and thought leadership is now morphing into content marketing. I like to think, however, that thought leadership is the better half of content marketing. Much of content marketing today is pushing out talk about your company and all the great things it is doing without thinking about whether it is new, interesting, useful, relevant and compelling. Building a reputation for thought leadership is about ideas that keep a company at the forefront of change. It should transcend sectors and geographic borders. It should...

  1. Enrich the company’s relationships with its key constituencies:  clients, prospective clients, opinion leaders, recruits, internal audiences, employees, media
  2. Make the world aware of new insights
  3. Build, support and sustain the company’s brand reputation
  4. Influence the industry agenda and own significant elements of it
  5. Be strongly identified with the future

Defining thought leadership is the subject of Michael Brenner's article in Forbes this week. Brenner is Vice President of SAP Global Marketing. His definition is as follows: "Thought Leadership is simply about becoming an authority on relevant topics by delivering the answers to the biggest questions on the minds of your target audience." He makes a good point in that great thought leadership comes from answering your customers' biggest questions. However, sometimes good ideas come from looking sideways or at where no one else is looking. I call it catching the wave. It is about catching the wave or the idea before it crests. Seeing the kernel of an idea when it is just emerging and not yet at its peak. Those provide the best content.

Here are Brenner's pointers for creating thought leadership from his thoughtful article on thought leadership. I found them very useful and will add to my deck on building a reputation for thought leadership (giving him credit of course):

  1. Identify the questions customers are asking. Prioritize them.
  2. Answer those questions across multiple formats and channels.
  3. "Give to get." In other words, don't make it hard to access.
  4. Make it interesting. Enjoyed his comment that thought leadership should have a "return on interesting."
  5. Invite customers to participate. Ask them to help you curate and produce great storytelling.

Empathetic CEO Reputation Rising

I did not expect to hear that Angela Ahrendts, former CEO of Burberry and soon to be retail chief at Apple, talk in an interview how when she started at Burberry, she focused on empathy and trust as the keys to building Burberry's culture. In the interview, Ahrendts says about those days, "It's compassion. It's humility. It's saying thank you. It is always putting yourself in the other person's position. I know it might sound weird, but empathy is one of the greatest creators of energy. It's counterintuitive, because it's selfless." Her father instilled the notion of humility in her when he asked her as a little girl, "When you look at a photo, do you see yourself last?" I wonder how many people actually see themselves last but she seems to be one of those people.

At Burberry, Ahrendts communicated often. She regularly emailed to employees and visited offices and stores around the globe. I liked her idea of a weekly video update to employees. Sounds like an inclusive leader. She will be one of the few female leaders at Apple so will be one to watch. 

Empathy. Humility. Compassion. Generosity. All these terms are increasingly showing up in features on CEOs. Is something up? Is climate change impacting CEO brains? Something is taking root and I will be tracking it. However, curious if anyone of this "soft" talk is coming out of this week's World Economic Forum. Hmmmm.