12/2/02
The CEO Credibility GAP
With CEOs now getting back to business basics, will their company's brand suffer because of it?
Bob Angus, partner, A&R Partners: Quite the opposite, in my opinion. As customers and observers become more focused on stability and business fundamentals, those CEOs who demonstrate prudence and honesty in running their businesses will enjoy positive brand reinforcement that resonates strongly with current interests.
Aedhmar Hynes, CEO, Text 100 International: If a CEO determines that to focus on business basics is to focus primarily on the numbers, then yes, the brand will suffer. If a CEO believes that focusing on business basics is all about developing great products, effectively beating the competition, providing strong customer value and building a successful business, then the brand will become far stronger as a result.
Donovan Neale-May, managing partner, Neale-May and Partners: Clearly, the challenging economic climate, ethics issues and increased corporate governance requirements are distracting to business leaders. Financial and operational problems also take away from the CEO role as authority leader at a time when they should be out front and leading the charge in retaining brand credibility, confidence and trust.
Today, most CEOs of technology companies are doing their utmost to reassure Wall Street, retain the confidence of business partners, and stay as close as possible to their customers. This should not distract from the brand, rather embellish it.
If a CEO becomes tarnished, how do you divert attention to other aspects of a company?
Angus: It is difficult to separate the head from the body in most entities. Martha Stewart is a good example of this. Making the CEO less accessible and trying to overshadow CEO problems with positive corporate developments are tactics that can work with some degree of success. In the end though, it is usually much more effective to face the issues honestly and early, even if it means enduring some negative reaction.
The perception penalty for obfuscation is always more severe than facing the music and getting on with business. Timing is one of the most important factors. Telling your story first allows you to set the agenda. Otherwise, you're reacting to others, which is by definition reactionary. Like it or not, reactive is defensive.
Dennis Collins, COO, Tech Image Ltd: We are always working to position a team of experts within our clients' organizations, so that several others are recognized as thought leaders besides the CEO. This way a company is perceived as stronger than any one individual. The key to positive coverage during this sort of transition resides with everyone determining the key messages that need to be reinforced and then delivering them consistently.
First and foremost is to remind people that the company is more than its CEO. When confronted with unexpected senior executive departures, we usually mention that their best legacy was leaving a strong infrastructure and successors in place. This promotes the notion of stability and continuity that a corporation needs to convey.
Lou Hoffman, president, The Hoffman Agency: In tough economic times, the marketplace more than ever looks to the CEO to set the tone for a given company. If a CEO's reputation is tarnished, the company needs to find ways to reestablish his/her credibility as opposed to diverting attention elsewhere. If the CEO's reputation can't be salvaged I'd suggest it's time to replace the CEO.
With a company in crisis, how do you position the replacement CEO?
Collins: We identify the two or three top components of the crisis, e.g., stockholder confidence, product liability, etc, and then illustrate how the new CEO is uniquely qualified to resolve them. This sets up the rationale for hiring the person in the first place. It's important to have them communicating quickly and forcefully, acknowledging that there's hard work ahead.
Neale-May: Replacement CEOs have to be fully prepared, briefed and schooled to immediately take the center stage in projecting leadership and control of the beleaguered company. Demonstrating a strong understanding of market issues, challenges and conditions is vital, as is knowledge of the company's business, markets and operations. The pedigree, reference points and testimonials of the individual should be used to position the replacement CEO as qualified, informed and suitable for the job.
In the past, PR pros have said they wouldn't work with a company whose CEO isn't an active participant in the PR process? Do you agree with that now?
Angus: Again, it's hard to separate the head from the body. People look to the CEO to be the ultimate spokesperson for the company philosophy and direction. Absent that or a strong surrogate, it is more difficult to establish company image and mind share. This is not to imply that all CEOs have to be as outspoken as Scott McNealy or as aggressive as Larry Ellison. Often it is the soft-spoken CEO who resonates more completely with their constituents and enjoys greater credibility. It is tough to mount an effective PR campaign without a strong spokesperson for the issues at hand.
Hoffman: Not using the CEO in a PR program is like going into a boxing match with one arm tied behind your back. That said, in today's economic times we would be foolish to turn down an opportunity because the CEO doesn't want to participate. Instead, we set proper expectations based on not having this asset.
Neale-May: Without strong CEO support and participation, PR professionals are more challenged to glean strategic insights and attract serious business and financial press attention. In addition, they will have difficulty getting the organization and management team aligned behind, and bought into, the process. Clearly, a potential prescription for failure. The best corporate identity building campaigns have a heavy dose of CEO branding and a supportive, knowledgeable and articulate business leader evangelizing the function and value of PR.
Author Rakesh Khuarana, who's written several books on CEOs, argues that charismatic leaders are to a company what a cult is to a religion-destabilizing a corporation. If this is true, does PR share the guilt?
Collins: That's just a novel premise to get a book published. Any corporation that truly gets destabilized because of one CEO is built on a house of cards. People invest in corporations rather than individuals or entrepreneurs, because a corporation is an entity onto itself-it has assets, continuity and resources far greater than any individual.
It is shortsighted and condescending to assume that a charismatic executive is the sole reason that people invest in a company as stockholders, customers, employees or partners, and that his/her departure would doom the organization. Obviously, I don't feel that there is any guilt, so PR doesn't share in it. However, in any situation, if PR is used to deceive rather than convince, then it is culpable.
Hoffman: I disagree with Khuarana. It's natural for the personification of a company to revolve around the top person in a company, the CEO. Even in the sports world where famous athletes make millions of dollars, it's still the the Phil Jacksons and Dusty Bakers of the world who set the tone (image) for their respective teams. Of course, there are poor CEOs the same way there are poor managers who turn out to be destructive forces in their organizations.
Do you think the age of the celebrity CEO will ever return?
Angus: I'm not sure it's gone. People still ask for Bill Gates' autograph, and Larry's waterborne escapades still enjoy strong reporting. And we have always put CEOs on the covers of our business magazines, like BusinessWeek, Fortune, Forbes and even our C-level IT publications like InformationWeek and CIO. People still fundamentally relate to people and the CEO is our corporate persona. However, given the microscope today's CEOs find themselves under, one has to wonder how anxious they will be for celebrity status going forward.
Hynes: I don't think it ever went away. While there are business leaders who can significantly impact that success and reputation of a business there will also be always be celebrity CEOs. After all, celebrity status is built upon at least a modicum of talent. And for the most part the world tends to celebrate talent. The two go hand in hand.
Neale-May: In certain markets, celebrity status has enormous value. Look at Richard Branson and Virgin. We will always have charismatic, mercurial, publicity-hungry CEOs. The challenge for PR professionals is to manage, focus, direct and leverage the desire for attention in a way that benefits the brand, rather than distracts from it. Media crave and want refreshing, outspoken, colorful business personalities. We should not disappoint them.
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