ReputationXchange http://www.reputationxchange.com CEO & Corporate Reputation Sat, 21 May 2016 13:56:36 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.8 Summer Reading from Gateshttp://www.reputationxchange.com/summer-reading-from-gates/ http://www.reputationxchange.com/summer-reading-from-gates/#comments Sat, 21 May 2016 13:56:36 +0000 http://www.reputationxchange.com/?p=18326 How much fun is this! An animated summer reading list from Bill Gates. A smart way to communicate without the formality and pomposity that goes with most chief executives. A newer way of storytelling from the top. Clearly, Gates is just sharing with us his favorite...

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How much fun is this! An animated summer reading list from Bill Gates. A smart way to communicate without the formality and pomposity that goes with most chief executives. A newer way of storytelling from the top. Clearly, Gates is just sharing with us his favorite books for the summer and does not need to further building his reputation.  He has enough good will already. But it makes him and all the initiatives at the Bill and Melinda Gates Foundation appear even more grounded and ahead of the curve because of his focus on deep thought and learning.

Short, snappy and makes you want to read each book. Clearly, no romance novels. It is entertaining (love the robot), accessible and it feels like he is sitting right next to you having a conversation. And what could be more important than reading a book, an activity we have little time for these days. I like that he only gives you 5 books to read this summer, that’s about one every two weeks. Manageable? Read away (if it ever gets warm here).

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CEO Bad Behaviorhttp://www.reputationxchange.com/ceo-bad-behavior/ http://www.reputationxchange.com/ceo-bad-behavior/#comments Sun, 15 May 2016 19:38:54 +0000 http://www.reputationxchange.com/?p=18311 I have been derelict with my blog so the guilt is driving me to spend some time today to post about a fascinating research analysis of when CEOs engage in questionable behavior and how the board responds to these reputation-damaging missteps. In an article by professors...

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I have been derelict with my blog so the guilt is driving me to spend some time today to post about a fascinating research analysis of when CEOs engage in questionable behavior and how the board responds to these reputation-damaging missteps. In an article by professors David Larcker and Brian Tayan at Stanford Graduate School of Business, entitled “Scoundrels in the C-Suite,” a nice provocative title, they question what happens to CEO who misbehave. And for a very good reason which is that misbehavior at the top influences behavior below and spreads exponentially. Time and time again, we hear about CEOs creating a tone at the top that impacts how the organization and allowed misconduct to be condoned. Since the authors realize that you can only measure what you can see, they looked at media reports of CEO misbehavior to determine how the board reacted and what type of retribution was doled out to the offender. Thus, Larcker and Tayan looked at at the news media between 2000 and 2015 and found 38 CEO incidents of bad behavior that garnered at least 10 stories in the news media. Here is what they learned:

• 34% involve reports of a CEO lying to the board or shareholders over personal matters—such as a drunken driving offense, prior undisclosed criminal record, falsification of credentials, or other behavior or actions.

• 21% involve a sexual affair or relations with a subordinate, contractor, or consultant.

• 16% involve CEOs making use of corporate funds in a manner that is questionable but not strictly illegal.

• 16% involve CEOs engaging in objectionable personal behavior or using abusive language.

• 13% involve CEOs making controversial statements to the public that were offensive to customers or social groups.

There are several other noteworthy facts that come out of the research. My favorite is that reports of CEO misdeeds had a lifespan of approximately 4.9 years on average after the initial media outbreak. That sounds about right to me. However, if you think about it, 5 years is a long time to see your name dragged in the mud and made reference to. I would think this reputation embarrassment would be a deterrent for anyone living in this age of social media. Also illuminating was that the most common response from companies was a press release or formal statement on the matter (84% of the time). And 58% of the misdeeds ended with the CEO’s termination so CEOs are not getting away with misbehavor. What happened to those nearly 4 in 10 CEOs who were not fired? Some lost their chairmanship title, dismissal from the board, reducing or elimininating the CEO bonus,

 

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Reputational Threatshttp://www.reputationxchange.com/reputational-threats/ http://www.reputationxchange.com/reputational-threats/#comments Sat, 07 May 2016 21:29:57 +0000 http://www.reputationxchange.com/?p=18298 I came across this interesting chart in a report by the Harris Poll 2016 about which potential scenarios are most damaging to reputation, according to the American public. The results make clear that the greatest threat to corporate reputation is being dishonest, unethical and hiding the...

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I came across this interesting chart in a report by the Harris Poll 2016 about which potential scenarios are most damaging to reputation, according to the American public. The results make clear that the greatest threat to corporate reputation is being dishonest, unethical and hiding the truth. Lack of disclosure is a reputation-killer. A full 80% of respondents indicate that not telling the whole truth about products/services and intentionally lying on the part of leadership will lead to severe reputation harm. Third on the list of reputation-busters is data breaches which at this point is almost an everyday affair. This finding underscores how important privacy is to Americans and how much citizens expect companies today to be prepared for the inevitable or pay the price.

I was surprised that hearing bad financial news was not higher on the list but clearly we are all immune to hearing that financial performance is not what was expected. We now just expect the ups and downs today, especially after having weathered the Great Recession.

These findings are a good reminder that anything but full disclosure on a timely basis will have severe repercussions.

 

Screen Shot 2016-05-06 at 11.24.45 AM

 

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Doing the right thing beforehandhttp://www.reputationxchange.com/doing-the-right-thing-beforehand/ http://www.reputationxchange.com/doing-the-right-thing-beforehand/#comments Fri, 29 Apr 2016 19:39:46 +0000 http://www.reputationxchange.com/?p=18279 Eric Orts is a professor at Wharton and writing a book on The Moral Responsibility. I just came across a great quote in an article I read about recent automotive clean-air rules that were violated. A warning and good lesson to be reminded of. He...

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Eric Orts is a professor at Wharton and writing a book on The Moral Responsibility. I just came across a great quote in an article I read about recent automotive clean-air rules that were violated. A warning and good lesson to be reminded of. He says,

“You have yet another lesson of how expensive it is when you make a big legal or ethical mistake — $18 billion (the potential maximum fine) is not a small number, and it is avoidable. It could really be cheaper if companies could watch themselves and regulate themselves and do the right thing without the big government over your head. When you have an event like this, looks like maybe we do need big government some times to look at big companies. That model will get reinforced. You do need watchdogs to ensure that the rules are being followed.”

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Outsider CEOs back in favor?http://www.reputationxchange.com/outsider-ceos-back-in-favor/ http://www.reputationxchange.com/outsider-ceos-back-in-favor/#comments Sun, 24 Apr 2016 17:16:48 +0000 http://www.reputationxchange.com/?p=18261 How is it that trends have a way of slowing down and raising questions as to whether the pendulum might just swing back in the opposite direction? In the ongoing survey by strategy& (originally Booz & Co.) on CEO turnover, the newest analysis found that despite...

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How is it that trends have a way of slowing down and raising questions as to whether the pendulum might just swing back in the opposite direction? In the ongoing survey by strategy& (originally Booz & Co.) on CEO turnover, the newest analysis found that despite a long-term preference for insider CEOs as successors vs. outsider CEOs (77% vs. 23%), an interesting shift is taking place. As they cite:

  • Outsiders accounted for 22% of all CEOs brought in via a planned succession between 2012-2015, up from 14% in 2004-2007
  • Almost three-quarters of all outsider CEOs were brought in during planned successions during that same period, up from 43% in 2004-2007

I have followed CEO turnover for what seems like forever and am possibly one of the earliest trackers of CEO turnover. I began tracking CEO succession on ceogo.com back in the early 2000s. Google has no memory of the website I built so it must be buried in the graveyard of outdated dot-com sites. At the time, outsider CEOs were preferred because they came in and overhauled what needed to be done. Celebrity CEOs were at their height and nabbing one enhanced board reputations. However, the challenge of turning around a company by an outsider CEO often only recorded short-term success and frequently ended in mayhem.  Then, nearly overnight, the world changed as a succession of catastrophic corporate scandals threatened the world order of business. Board shame necessitated bringing in insider CEOs who knew the culture, were hand-groomed and were less likely to be risk-takers. U.S. boards began following the European model where outsider CEOs were a sign of failure and insider CEOs represented establishment and status quo. Insiders were touted as the answer to corporate consistency and a nod to the board’s governance chops. Yet, for all this trial and error, we now see strategy&’s newest survey revealing that we are possibly at another juncture where outsider CEOs are on the rise again. Maybe it is just a course correction but perhaps not.

What’s to explain for this rise in outsider CEOs? As Per-Ola Karlsson, leader of Strategy&’s organization and leadership practice for PwC Middle East, says: “Hiring an executive from outside a company to serve as chief executive officer used to be seen as a last resort. That is not the case anymore with the disruptive market-related changes that companies are facing today.” The key word here is disruption. Business disruption is very different from innovation which seems to have been the mantra for the past five years. Business disruptors create entirely new industries and new technologies that are shaking up business. There are 45 million mentions on Google for business disruption compared to 64,000 back in 2006, 10 years ago. Business disruption changes how we lead, do business and discover new markets. As an article in Forbes, says, business disruption is “at once destructive and creative.” That’s a tall order. Maybe we are bearing witness to a greater need for these game-changers than we thought. Time will tell.

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Reputation recovery at J.Crewhttp://www.reputationxchange.com/reputation-recovery-at-j-crew/ http://www.reputationxchange.com/reputation-recovery-at-j-crew/#comments Sat, 23 Apr 2016 18:31:23 +0000 http://www.reputationxchange.com/?p=18254 Received this in my inbox this morning. Considering the bad press that I’ve read over the past year about J.Crew and the quality of its products, this is one way to entice people to give the clothier another look. I thought it was effective. The CEO...

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Received this in my inbox this morning. Considering the bad press that I’ve read over the past year about J.Crew and the quality of its products, this is one way to entice people to give the clothier another look. I thought it was effective. The CEO — everyone knows by the name Mickey — is being accountable and communicating from a position of strength, hopefully. He also offers up his email if there is something not working for his customers. I’d be curious how many people actually take him up on giving him a piece of their mind or an idea. All I can say is that it would be terrible not to have J.Crew around. So I am rooting for a turnaround.

Since a few people sent this to me, I consider that means it is being noticed and spread. We will see how the season goes.

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What we want from Social CEOshttp://www.reputationxchange.com/what-we-want-from-social-ceos/ http://www.reputationxchange.com/what-we-want-from-social-ceos/#comments Wed, 20 Apr 2016 22:22:10 +0000 http://www.reputationxchange.com/?p=18243 A new study was just released about what Americans want from CEOs who are using social media. The survey from G&S Business Communications and Harris Interactive found that the average person wants CEOs to talk about business and not about their personal lives. They found that...

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A new study was just released about what Americans want from CEOs who are using social media. The survey from G&S Business Communications and Harris Interactive found that the average person wants CEOs to talk about business and not about their personal lives. They found that Americans want business leaders on social media to talk about their company’s vision (36%), their company’s products and services (35%), their company’s customer service issues and experiences (32%) and their employee culture (25%). In comparison, less than 20% want to hear from social CEOs when it comes to career advice or personal stories. This meshes with our finding back in 2010 when we first dived into social CEOs and found that Fortune 500 CEOs mostly shared information about their companies and industry, discussed company partnerships and shared the company’s mission and history when they were online. At the time, they were less apt to discuss personal news or information which is what the public seems to agree with. Since 2010, we’ve conducted regular surveys on social CEOs and for the most part, they have gone from marginal to mainstream.

Particularly interesting were the findings that millennials and younger GenXers learn about companies through social media to such a great degree:

  • 63% of millennials and 58% of younger Gen Xers increasingly hear about what’s going on with companies through social media versus other channels.
  • 53% of millennials and 47% of younger Gen Xers place greater trust in company information when it comes through social media versus channels.
  • 67% of millennials and 61% of younger Gen Xers find senior leaders more trustworthy when they are transparent on social media.

A good enough argument if ever to be a social executive. A surefire way to build a good reputation with the next generation.

 

 

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Social CEOs Endlessly Fascinatinghttp://www.reputationxchange.com/social-ceos-endlessly-fascinating/ http://www.reputationxchange.com/social-ceos-endlessly-fascinating/#comments Sun, 03 Apr 2016 22:18:04 +0000 http://www.reputationxchange.com/?p=18232 The world has a never-ending interest in social CEOs. Or I should say CEOs in general. But when it comes to CEOs using social media, it’s all the time. In the past few weeks, I’ve spoken to several journalists about the opportunities and challenges facing CEOs who...

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The world has a never-ending interest in social CEOs. Or I should say CEOs in general. But when it comes to CEOs using social media, it’s all the time. In the past few weeks, I’ve spoken to several journalists about the opportunities and challenges facing CEOs who use social media. Here is one that I meant to write about that appeared in the San Francisco Chronicle. The article talks about how CEOs are turning to social media instead of their corporate web sites. To back this up, the article quotes a professor of digital social media at USC’s Annenberg School, “People are much less likely to go seek a corporate website. They expect the news to show up in their social media feed. People are now just assuming (relevant information) will come to them. If it doesn’t, it probably wasn’t worth listening to anyway.” So the place to be heard is social platforms although I would not shut down your company’s website. I believe I just heard on the news this week that companies are gearing up to change their websites since they need refreshing and revitalization.

I also had a nice chat this week with Damian Corbet, founder of The SocialCsuite (@TheSocialCsuite). He has started this feed for information on Social CEOs and execs and he’s keeping it going. Take a look because he has the passion to make it happen. I like Damian’s Social CEO of the week. We chatted about how we did our research on Social CEOs starting back in 2010 and why we did it the way we did. Back in 2010, Social CEOs were rare and just getting on the website was considered risky business. Even now, there are countries where having your face on your website is a security risk. Fast forward to our last research on social CEOs and there’s more momentum. But the good news is that there’s a whole crop of them. Social CEOs need a fan club. He’s one. So am I.

[Ironically, when I went to look for an image for this post, they are predominantly men using social media. So I choose a genderless pix for this post.]

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Reputation Reviewhttp://www.reputationxchange.com/reputation-review/ http://www.reputationxchange.com/reputation-review/#comments Sat, 02 Apr 2016 18:39:46 +0000 http://www.reputationxchange.com/?p=18215 A few good articles that I have been saving to write about and have not had the chance. So here they are: 1. Lessons from Julius Caesar about how not to run a company well. This article appeared in the WSJ and it chronicles what leaders...

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A few good articles that I have been saving to write about and have not had the chance. So here they are:

1. Lessons from Julius Caesar about how not to run a company well. This article appeared in the WSJ and it chronicles what leaders can learn from the Roman dictator.  A successful conqueror for sure but a narcissist to his dying breath. The author describes what he calls The Caesar Syndrome: “A bold, talented, aggressive leader conquers an organization and then thinks the heavy lifting is over. But a leader’s work isn’t done when he becomes CEO—it has just begun. The goals: to listen, empower, collaborate and compromise, all for the good of the organization and not himself.” Being selected as CEO and building a positive reputation are just the start of the journey. Instead of  Caesar’s victory speech to the Senate, “I came, I saw, I conquered,” the message should have been “I’ll listen, I’ll learn, I’ll share.” New CEOs should heed this message.

2. Businesses are perishing quicker than ever. In an article by BCG, companies are reportedly dying younger than the people running them.  Building a lasting corporate reputation has to be accomplished in a shorter amount of time than ever. Just a handful of companies live beyond 50 or 60 years. The article points out that 10% of all public companies fail each year, a fourfold increase since 1965. In the U.S.. one in three (32%) companies will exit over the next 5 years compared to 5% 50 years ago. The mortality risk of companies is quite high and BCG found that there are no safe sectors and neither scale or experience make a difference.

Great advice is provided for companies who want to last and endure: particularly, the importance of detecting early warning signs and not confusing persistence with performance.

3. There is no such thing as CEO neutrality anymore. I’ve written before about CEO activism on this blog but the pendulum is swinging. In today’s NYT, an article by professors’ Aaron Chatterji and Michael Toffel 

 

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Pharma’s Rise in Reputationhttp://www.reputationxchange.com/pharmas-rise-in-reputation/ http://www.reputationxchange.com/pharmas-rise-in-reputation/#comments Sun, 27 Mar 2016 18:45:31 +0000 http://www.reputationxchange.com/?p=18200 It has been a long time coming but in the annual corporate reputation survey by PatientView among more than 1,000 patient groups in 72 countries, 45% reported that pharma had a Good or Excellent reputation in 2015, up from 39% the year before. That is...

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It has been a long time coming but in the annual corporate reputation survey by PatientView among more than 1,000 patient groups in 72 countries, 45% reported that pharma had a Good or Excellent reputation in 2015, up from 39% the year before. That is the highest level since the survey began in 2011. To lend even greater support to that finding, nearly 3 in 10 (28%) patient groups said they expect the pharma industry to improve over the next 12 months. This is good news for a beleaguered industry. The bump in perception comes from patient group’s view that the industry is delivering greater value in its delivery of high quality products and services.

However, the pharma industry still has its work cut out for itself. Patient groups did not give high ratings for the industry’s fair pricing policies and nearly 1 in 2 said they were poor at this.

The countries in which patient groups were the least happy were in Australia, France, Germany, the Netherlands, the UK and the US.

How do pharma companies build positive perceptions? According to the survey, developing new products helps build high regard as well as how they manage drugs when they go off patent and demonstrate concern for patients at that time. Other factors that hurt reputation in this industry are mergers and acquisitions, bribery/corruption, and lack of transparency.

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