ReputationXchange http://www.reputationxchange.com CEO & Corporate Reputation Fri, 29 Apr 2016 19:39:46 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.7 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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Courageous CEOhttp://www.reputationxchange.com/courageous-ceo/ http://www.reputationxchange.com/courageous-ceo/#comments Sun, 06 Mar 2016 17:28:32 +0000 http://www.reputationxchange.com/?p=18185 Jeff Weiner at Bi-Weekly Company Meeting 2.10.16 from LinkedIn Saw this post from Shannon Stubo Brayton at LinkedIn. She is their CMO/CCO. She shared what the LinkedIn CEO, Jeff Weiner, did after losing more than 40% of the company’s value after announcing 2015 earnings and guidance for...

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Saw this post from Shannon Stubo Brayton at LinkedIn. She is their CMO/CCO. She shared what the LinkedIn CEO, Jeff Weiner, did after losing more than 40% of the company’s value after announcing 2015 earnings and guidance for 2016 a few weeks ago. In her post, Shannon said that you get a real bird’s eye view on the character of an organization’s CEO and others top management when a company hits a wall like this. It is true that crises can be very revealing into the soul of leadership, especially when facing employees who are worried about their jobs, the reputation of their companies and their futures. Uncertainty is no fun.

I was delighted to have a peek into what Weiner said to employees and grateful that a clip of his talk at an all hands on meeting was made available. You should take a few minutes to listen in like I did.

Radical transparency is never easy. And getting the CEO and communications team to reveal company difficulty on any platform is never easily won. Why open yourselves up to bad news? But they did. When I last looked, there were nearly 35,000 views and plenty of comments.

Bravo to them. A reputation role model.

 

 

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Welcome to a new CEOhttp://www.reputationxchange.com/welcome-to-a-new-ceo/ http://www.reputationxchange.com/welcome-to-a-new-ceo/#comments Fri, 04 Mar 2016 19:21:35 +0000 http://www.reputationxchange.com/?p=18170 It is always fun to come across something unexpected. I often talk about what CEOs should do in their first 100 days to introduce themselves to employees and others. But a colleague forwarded this to me which is what employees did to introduce themselves to...

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It is always fun to come across something unexpected. I often talk about what CEOs should do in their first 100 days to introduce themselves to employees and others. But a colleague forwarded this to me which is what employees did to introduce themselves to their new president and CEO, Svein Tore Holsether. What a twist. Employees of Yara. a firm that specializes in agricultural products, took the first step in saying hello from all over the world and in their own languages. Watching the video gives an onlooker of the global reach of the company. Luckily, there are subtitles so I could read what each person was saying. Definitely an idea to save when it comes to smart things to smooth a CEO or any executive transition.

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The Freefalling Reputation Stumble Ratehttp://www.reputationxchange.com/the-freefalling-reputation-stumble-rate/ http://www.reputationxchange.com/the-freefalling-reputation-stumble-rate/#comments Sat, 27 Feb 2016 12:41:13 +0000 http://www.reputationxchange.com/?p=18161 Weber Shandwick’s annual calculation of reputation loss – the “stumble rate” – finds the lowest rate of loss since we began calculating and tracking this rate back in 2010. During 2015, just about one-quarter of the world’s largest companies lost their esteemed status as the...

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Weber Shandwick’s annual calculation of reputation loss – the “stumble rate” – finds the lowest rate of loss since we began calculating and tracking this rate back in 2010. During 2015, just about one-quarter of the world’s largest companies lost their esteemed status as the #1 most admired company in their industry. That’s just one in four compared to one in two in 2010. That is more than a trend … that’s a sea change. And good news for those who stay awake worrying about their company’s reputation.

Each year Weber Shandwick measures the rate at which companies lose their lofty perch in their industries on the Fortune World’s Most Admired Companies list. We call this the stumble rate. Between 2015 and 2016, 25% of the world’s largest companies experienced a stumble, down from last year’s 31% and on a steady decline since 2012.

Before jumping into several insights about which industries experienced the greatest upheavals reputation-wise, let’s pause for a moment to ponder what the increasing stabilization of corporate reputation rankings means. Several ideas come to mind. First, boards of directors are doing a better job at picking CEOs to lead companies. Perhaps the trend towards hiring insiders over outsiders is having a lasting effect on companies being well-led and focused on the long-term. Equally true, succession planning seems to be finally taken seriously at the board level. Second, in 2010, companies were still on shaky ground from the Great Recession. It was not a pretty picture, if you recall. Not that everything is perfect today but confidence in a more stable future led by more talented CEOs seems to have taken hold. Third, the reputation recovery process appears to be better understood today and leaders know how to shorten the pain. CEOs are not only seasoned in building stronger reputations but they now more deeply understand the ABCs of recovering and protecting their companies from harm. Since every company witnesses its 15 minutes of fame and 15 minutes of shame these days, CEOs are better able to stop the bleeding, begin restoring reputation and create lasting change. For these reasons, we may be seeing a greater decline and less volatility in reputation loss.

Industry Insights

In addition to our annual report on the stumble rate, we also provide some insights into the industries that have or haven’t had a stumble. We dig through the data, including the nine drivers of reputation, to glean some insight into what causes a company’s reputation to stumble. A stumbler is an industry whose top company last year is no longer the top company this year. What’s interesting this year?

  • The industry stumbler taking the hardest hit during 2015 was Soaps & Cosmetics. It happens all the time. A #1 company loses its industry crown. For that very reason, reputation damage is considered one of the greatest threats to companies. However, sometimes it is momentary and we see raters maintain their faith based on track record and keep the company amongst the All-Stars.
  • Life & Health Insurance is a chronic stumbler, with six stumbles since 2010. Clearly this is an industry in transition. Just this morning I read this article in the WSJ about changes afoot. Other stumble-prone industries, with five stumbles each since 2010, are Energy, Diversified Outsourcing Services and Motor Vehicle Parts.
  • Six industries (out of 50+, exact number depends on the year) have never had a stumbler since 2010. The most admired companies in these industries have been stalwarts of reputation: Consumer Food Products; Entertainment; Property & Casualty Insurance; Internet Services & Retailing; Mining, Crude Oil Production; and Semiconductors. That is a pretty impressive track record.
  • Specialty Retailers stumbled for the first time. This is the only industry to have had a perennial number one lose its top spot this year.
  • Four industries have first-time #1s. Companies in Chemicals; Electronics; Healthcare: Pharmacy and Other Services; and Specialty Retailers are, for the first time, their industry leaders.

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