Tuesday, November 29, 2005

Blogging CEOs

Our research on CEOs and blogs received alot of attention. It seems to have struck a chord. The survey -- the2005 PRWeek/Burson-Marsteller CEO Survey (www.prweek.com) -- revealed that while blogs are increasingly making headlines, only seven percent of CEOs are blogging and many are skeptical about starting a blog themselves. Despite the low numbers, 59 percent of CEOs said blogs are useful for internal communications, and 47 percent said blogs are effective for external audiences.

The Good about Blogs
CEOs recognize the benefits of blogs, including the ability to quickly communicate new ideas and news (41 percent), providing a more informal venue for communication with constituents (40 percent), and obtaining immediate feedback (36 percent). Despite these benefits, only 18 percent of CEOs plan to host a company blog over the next two years.

The Bad about Blogs
Even more interesting to me was why CEOs might not favor blogs. Half (50 percent) said that they would not have the time and somewhat more than one-third indicated that CEO blogs might not be appropriate enterprise-wide (37 percent) or there may be too many legal restrictions (35 percent).

All of the reasons for and against CEO blogging are quite legitimate. The interesting news was that CEOs seemed aware of this means of communication. Only eight percent knew nothing at all about blogs.

A Good Idea for New CEOs
For new CEOs, internal blogs make sense. New CEO blogs can quickly capture what is on employees' minds in the early months. Since many new CEOs can not visit every site or facility, an internal blog opens up the channels to the top. An internal CEO blog would positively give the impression of the new CEO's desire to listen and engage. Nothing wrong with that.

I hope to continue exploring the CEO blogging phenomenon.

lgr

Monday, November 28, 2005

Dangerous Precedence

I see it coming. After reading about new auto CEO Dieter Zetsche in today's Wall Street Journal ("New DaimlerChrysler CEO Targets' Infighting, Intrigues,"http://wsj.com) , I began worrying about the man. There is the standard comparison to the old top dog (outgoing CEO Jurgen Schrempp), the new CEO-to-employee communication style ("hands on") and the bold declaration ("what counts is performance"). Dieter is also described as a pain-sharer (he personally delivered bad news to employees about layoffs).

Noticeably, the writers mention that Dieter has given scant details about how he plans to right the DaimlerChrysler ship. Despite the lack of an articulated agenda, the legend is building fast. Before Dieter takes over on January 1st, expectations surrounding this newly minted CEO will be so high that it will be hard for him not to stumble.

I wish him good luck.

lgr

Saturday, November 26, 2005

Leadership Is An Art


I pulled out former CEO Max De Pree's Leadership Is An Art this weekend. The former CEO was a thoughtful leader and his book rings as true now as it did in 1989 when he wrote it. De Pree writes :

"Leaders owe a covenant to the corporation or institution, which is, after all, a group of people. Leaders owe the organization a new reference point for what caring, purposeful, committed people can be in the institutional setting....Covenants bind people together and enable them to meet their corporate needs by meeting the needs of one another. We must do this in a way that is consonant with the world around us."

His call for a sense of community and responsibility to the organization would be great if it only were more common. With so many CEOs departing, downsizings and serial mergers and acquisitions, leaders are finding it hard to infuse the organization with the commitment De Pree talks about. It can be done however. If leaders communicate that a covenant exists and walk the talk as De Pree did, commitment will flourish and productivity will soar. Leadership does not have to be a lost art.

Wednesday, November 23, 2005

CEOs or Cogs

When I was editing my post yesterday, I spellchecked the entry. Interestingly, the word "cog" came up as a replacement for "CEO." Got me thinking that perhaps employees do view CEOs as cogs in the wheel. I looked up the definition of "cogs" and found : A subordinate member of an organization who performs necessary but usually minor or routine functions.

In all the organizations I have worked, no one ever seems to know what the CEO does all day. People often remark, "Well, what is he/she doing about it?" "He's never here." "She nevers talks to customers. We do all the work." "What does he know about what is really going on? Who does he talk to besides the CFO?" Due to this lack of information on most CEO whereabouts, employees do think that CEOs are cogs in the wheel that perform necessary but minor routines. Perhaps CEOs need to do a better job of filling in employees about their calendars.

Years ago, Cisco CEO John Chambers had a calendar on the Cisco web site indicating when he was visiting employees and customers. I thought it was a good attempt at trying to inform the organization about his schedule. Fortune sometimes shadows CEOs. The recent article on Jeff Immelt in their 75th anniversary issue has a day in the life profile of Immelt's travels and meetings. I thought that this was helpful in better understanding what it really takes to run a Fortune 500 company. The title was, "If It's Tuesday, This Must Be Oslo." (
www.fortune.com/fortune/fortune75/articles)

All those Day in the Life books might have considered shadowing CEOs but when it comes down to it, I tend to think no one would be interested. Although I follow CEOs regularly, most people are less enamored of the CEO class. Yet, a Day in a CEO's Life would be a good exercise for training the next generation of CEOs who might be wondering what a typical CEO day is like. Then these rising stars would get to vote yea or nay.

lgr

Monday, November 21, 2005

Business Magazine CEO Covers Go Dark

Looking back to June 2005 (approximately six months), it is clear that the major business magazines are rightsizing CEOs right off their covers. Whereas CEOs were once regular cover fodder for Fortune, Forbes and BusinessWeek, they are now MIA. See the figures below:

From June 1 - Nov 30
2002
Fortune 5
Forbes 4
BusinessWeek 5
Total = 14
2003
Fortune 6
Forbes 1
BusinessWeek 9
Total = 16
2005
Fortune 1
Forbes 3
BusinessWeek 0
Total = 4

This change in CEO iconography could be due to several reasons. The most obvious reason for non-CEO covers is that business editors no longer want to celebritize CEOs only to have them revealed months later as law-breaking scoundrels. Many business editors still remember Enron cover boys Ken Lay and Jeff Skilling. Another reason for the lack of CEOs on recent business covers could have to do with CEOs themselves. Few CEOs today would want to be tagged as an "imperial CEO." Employees, investors, shareholders and board members might look askance at CEO-posing when they businesses have to be run and customers met. Another factor that might be keeping CEOs off business magazine covers is the Sports Illustrated jinx -- the superstitious belief that athletes appearing on SI covers is tantamount to the kiss of death (see 2002 SI story re the jinx.)

We will keep track of what the next six months of business magazine covers bring and let you know what we find.

lgr

Sunday, November 20, 2005

CEO Work-Life Balance

We released a portion of our new research on CEO and corporate reputation this week. The results are thought-provoking when you realize that 51 of the 100 largest global economic entities today are corporations.

The CEO has traditionally had a legendary place in most cultures, a stature that often far exceeds their role as a mere business executive. Part rock star, part Type A workaholic, many have earned headline-friendly nicknames like “Chainsaw Al” or “Neutron Jack.” That’s why the results of our new global survey are nothing short of surprising. (
www.burson-marsteller.com/pages/news/releases/2005/press-11-15-2005) It seems a lot of our Type A’s have decided to focus some of their considerable skill and talent on the home front, displaying a newfound sensitivity worthy of Mr. Mom.

A survey of 685 senior executives from around the world found that 54 percent of these so-called business influentials would turn down the job of CEO if it were offered. And the number one reason for bypassing the corner office? It’s a desire to achieve a better balance between work and family life. The heck with the next rung on the corporate ladder, what time is soccer practice?

But beyond the unusual nature of these findings are some serious implications for both business and society. Given the post-Enron focus on corporate ethics and a rising rate of CEO departures, businesses have an urgent need to replace outgoing chief executives with a new generation of talented, ethical and credible leaders. But as more CEOs depart, the reluctance of many senior executives to accept the top slot will continue to hinder efforts to restore overall trust in companies around the world.

So why are so many people willing to say “No thank you” to what has long been considered the ultimate corporate job. Sixty-four percent cited the so-called family factor – the search for work/life balance -- as the leading reason they’re willing to pass up the top job. Clearly there’s a desire by many to avoid a schedule like the one recently described by Jeff Immelt, chief executive officer of GE, who told a national publication he routinely works 100-hour weeks and spends 60 percent of his time on the road.
(www.fortune.com/fortune/fortune75/articles/
0,15114,1101116,00.html)

But work/life balance is only one of the reasons some people would rather not be CEO. Forty-two percent cite the pressure – or as Novartis CEO Daniel Vasella called it the “tyranny” - of quarterly earnings, 37 percent noted the high stress level and 27 percent cited intense scrutiny by the press, shareholders and public.

To be sure, our survey also unearthed plenty of reasons why some still find the corner office worth pursuing, but they’re not the reasons you might suspect. Although the 3 P’s – pay, perks and prestige – usually dominate the headlines, those are fairly far down the list. There are more compelling reasons why many men and women still want to be your company’s next CEO.

For example, more than half – 56 percent – want the chance to solve complex problems, followed by significant percentages who want to have a personal impact on the business, the satisfaction of seeing their ideas implemented, and the chance to take a company from “good to great.”

So, armed with this information, what should companies do? And more fundamentally, why should they care? After all, despite evidence of growing reluctance to accept a company’s top job there are still plenty of people willing to take the plunge. The key is finding the right person. Corporations are under immense pressure to build a good reputation, and our research has repeatedly found that a company’s reputation is tied directly to that of the man or woman at the top. In fact, we’ve consistently found the reputation of the CEO is directly related to the company’s prosperity, standing and destiny.

The good news is that the findings of the survey provide some insight into how companies can manage the challenge of building the next generation of global leaders. We think it’s critical, for example, that companies provide their future leaders with real-life training and realistic strategies for balancing life and work, managing stress and dealing with public scrutiny. Corporate boards should mentor rising stars to make sure they’re comfortable on the fast track. Upcoming leaders should have the resources to build the strongest senior management team. And, if possible, companies should give incoming CEOs time to get their sea legs and perfect their leadership skills out of the public spotlight.

As we see a rapid rise in the rate of CEO departures and greater focus on corporate conduct and performance, the need has never been greater to build the next generation of global leaders. CEOs are increasingly challenged by time zones, fluctuating global markets, unpredictable crises and an expanding roster of stakeholders demanding their attention. All of which makes it harder to maintain the balance between work and home that a growing number of executives indicate is important. The extent to which companies help upcoming qualified CEOs find that balance will go a long way toward determining their success in the marketplace.

Those are my thoughts for our next leadership generation. lgr

Friday, November 18, 2005

Reputation Galore

Reputation is increasingly becoming research-worthy. Just this week I encountered two interesting surveys -- one on reputation risk ("Risk of Risks") and another on board reputation management.

The first survey provides excellent information from the Economist Intelligence Unit (
http://eiu.com) although I cannnot seem to find a link to the report on their web site. The survey was sponsored by ACE, Cisco, Deutsche Bank, IBM and KPMG.

The other is from Financial Dynamics and Directorship and appears in the November issue of their newsletter (
www.directorship.com/newsletter/index.html). As a reputation expert, here are some of the findings that captured my attention:
  • 59 percent of senior risk managers say that reputation is becoming a key source of competitive advantage.
  • CEOs are primarily responsible for managing reputational risk, followed by the board of directors (media agencies rank lowest but I tend to think that risk managers rarely talk to agencies unless they are in trouble).
  • Companies do not gather external perceptions often enough. The most often surveyed segment are customers, the least surveyed are pressure groups, NGOs. Of course, the latter groups can be the most noisy.
  • Board members say that the CEO is the source they rely on most to stay informed about the company (92 percent choose the CEO). Sounds abit risky to me.

The findings are of particular interest because the CEO continues to be the principal reputation guardian despite all the regulations, board involvement, financial liability, lead directors, non-executive chairman, and other restrictions we have placed on them. In fact, it appears that although CEOs are reported to be losing authority, they are gaining accountability when things go wrong.

Management guru Peter Drucker was quoted in the Wall Street Journal on November 14th (http://www.wsj.com) as saying: "In every single business failure of a large company in the last few decades, the board was the last to realize that things were going wrong."

Reputation should be everyone's responsibility. Leaving it to the top dogs can be risky.

lgr