Thursday, April 27, 2006

Repairing Bush's Reputation

BusinessWeek's Diane Brady asked several management gurus what President Bush should do to repair his reputation. She reports what they said in the April 17th issue (I am just abit behind). Some of the suggestions include bringing in more outside voices, pausing before making big decisions, building a team that consists of more than "yes" people, and bringing in some thoughtful critics. Many of these suggestions focus on bringing people to the president. Seems that it would be better if it were the other way around. How about taking President Bush out of the White House to meet with people from all walks of life in their own environments. Could help to provide fresh perspective. Or set up a Citizen Advisory Panel made up of ordinary Americans who could meet with the President quarterly and exchange points of view.

Like new CEOs who sometimes turn to retired CEOs, perhaps Bush could call on some retired presidents who might have some insights. His father might be one good source. Former President Clinton? Former President Carter? Might be worth a try.

Just wanted to add my two cents on repairing the President's tarnished reputation.

Wednesday, April 26, 2006

24 Hours Makes All the Difference

Today's papers are now featuring new Sun Microsystems CEO Jonathan Schwartz's picture finally. So I was a day ahead with my comments on his photo-absence. Would have been nice to see the two together in yesterday's papers but they obviously wanted to give McNealy his day in the Sun.

Tuesday, April 25, 2006

Sun Screen

This morning I read with interest the coverage on Sun Microsystems co-founder Scott McNealy's handing over his CEO title to Jonathan Schwartz. McNealy is one of the longest-standing CEOs in Silicon Valley. What fascinated me was that the only picture that appeared in The New York Times, Wall Street Journal and Financial Times was that of McNealy. You would think that a photo of Jonathan Schwartz might have surfaced somewhere. Afterall, he is the new CEO. And Schwartz is no typical CEO -- he sports a pony tail and is a mere 40 years old. Just those two factors alone merit a photo in the major business media. It is not like he is so shy that there were no photos available. Just go to the Sun Microsystems web site where there are several digitally-enhanced photos of the new CEO begging to be used.

Not sure what to make of the MIA young CEO but let's hope he gets some photo ops soon.Thought I would give him some free advertising on my blog so that's him up above.

Monday, April 24, 2006

Old Fortune Rhyme

I saved this business poetry from when I was in charge of marketing at Fortune. When someone left the company, he gave me this promotional brochure that I saved for posterity. The brochure was magnificently designed and elegant as could be. That I distinctly recall.

The words below certainly speak of days gone by. Business in the 1960s was all about men. My how things have changed (and not changed).

I can not figure out if the rhymer was actually thinking about "change" as in cents or as in "change management." Tend to think it is the former. Who knew about organizational change then? The world was so much more manageable.

The Rhyme of The Ancient Manager (1969)

“For the men who manage business,
Wherever they may range,
Are the Men in Charge of Dollars
And the Men in Charge of Change.”

Thursday, April 20, 2006

CEO Apologies

When I entered "CEO" into Google images, one of the pictures at the very top was an illustration (shown here) about CEO apologies. I found that ironic since I had cut out an article from today's New York Times (April 20) on "The High Cost of the Korean Mea Culpa." Two companies with Korean connections had apologized for misdeeds -- Lone Star and Hyundai-Kia Automotive Group. The photo in the Times shows top executives bowing in an act of contrition. Apparently apologies like this are standard operating procedure in South Korea and are done in the hopes of reducing legal punishment. In addition to apologies, South Korean companies contribute funds to good causes. Hyundai's deep executive bows were accompanied by a $1 billion gift to social welfare programs (no small change). The entire act of donating money for wrongdoing in South Korea has its critics but certainly does not condone the misbehavior in the first place. Reputations cannot be bought.

Monday, April 17, 2006

The 80/20 Rule in CEO Coverage

Today I spent some time reviewing saved articles in my files on CEO Celebrity. I turned back the clock to the late 1990s and early 2000s before Time Warner and AOL merged and the bust. The topics of CEO charisma and CEO as Brand were everywhere. Soon after the toppling of the CEO icon as Enron imploded, GE's then CEO Jack Welch was interviewed on the Jim Lehrer Online Newshour report (December 2002). He was asked about CEO celebrity and I couldn't help but applaud him as I sat alone in my office despite the four years that passed since these comments.

Welch said: “We resist 99.9 percent of all interviews. It happens when you’re in a big company and your company is successful because of a lot of people, you end up getting your mug shot all the time. You end up on television all the time and then you’re called a quote, charismatic CEO, out trying to do something. You’re not trying to be charismatic. You’re trying to motivate employees, you’re trying to work internally, you are trying to improve processes, you are not trying to get publicity because half the time it’s crappy. You’d like the mole to go away.”

Welch is so right. Most CEOs never start out wanting to be the center of media attention. In fact, even in the crazy heady celebrity CEO days, most CEOs just wanted to keep their heads down and take care of business. The few that did get the frenzied attention agreed with Welch that rallying the troops and communicating the message were good enough reasons to accept invitations to appear live.

As a research study pointed out, 20% of CEOs generated 80% of the media coverage leading up to the scandalous years. We were seeing the same CEOs in the spotlight over and over again -- John Chambers (Cisco), Jeff Bezos (Amazon), Jack Welch (GE), Jacques Nasser (Ford), Carly Fiorina (HP), Michael Eisner (Disney). Perception did not exactly match reality. The way the media reported on CEO celebrities made you think that all those Fortune 500 CEOs were grabbing mikes and throwing their shirts to the ground during employee pep rallies.

No way.

Saturday, April 15, 2006

CEO-ing in India

Google sent me an interesting article this morning about CEOs in India. According to the Economic Times, Indian CEOs are trying to fit in better with their employees and appear less imperial and hierarchial. Instead of staying at five-star hotels while traveling, Indian CEOs are now staying at company guest houses with employees and even using vending machines like the average guy or gal. As I have noted over the years in my work on CEO reputation, the link between the CEO's reputation and the bottom line is being felt in India. This is the reason given for CEOs turning into "cool dudes" as the article says.

One particular point caught my attention."Take the age-old tradition of attaching a Saheb, Babu and a Ji to everyone’s name. Though most Indian employees would still be acutely uncomfortable calling their bosses by their first names like the Americans do, Indian CEOs are now persuading them to call them by their initials as a first step. So Mukesh Dhirubhai Ambani is MDA, Kumar Mangalam Birla is KMB and Sunil Bharti Mittal is SBM to most and Sunil to quite a few."

Got me to thinking about CEOs we hear about often. Here is an unrepresentative list.

GE's Jeff Immelt = JI
BP's John Browne = JB
Microsoft's Bill Gates = WG (for William)
Microsoft's Steve Ballmer = SB
Ebay's Meg Whitman = MW
Starbuck's Howard Schultz = HS
Berkshire Hathaway's Warren Buffet = WB
Ford's Bill Ford = WF (for William)

Somehow these initials do not have a ring to them. Maybe because we need to use their middle initials if they have them. Hard to imagine calling Bill Gates WG or BG. Interesting idea, however.

Thursday, April 13, 2006

Fighting Words from GM

Interesting that Bob Lutz, GM's vice chairman, is fighting back. "We are removing the gloves at G.M and are going to be much more aggressive about telling our side of the story. It's time to strike back." (The New York Times, April 13, 2006). Those are fighting words.

Lutz mentions that GM has reached an inflection point. I think that he is not only speaking for his company but for companies in general. Over the past two years, it has become increasingly clear that companies are not rolling over when they think they are right and believe that their point of view is not being heard. Wal-Mart comes to mind after trying hard to keep a low profile and not ruffle any feathers. McDonald's is working on its game plan to counter the new movie "Fast Food Nation" which criticizes the food giant.

There is definitely change in the wind.

Sunday, April 09, 2006

Support from GM's Troops

Friday's The Wall Street Journal (April 7,2006) contained "An Open Letter to America From GM Dealers." The full page advertisement described its support for embattled GM CEO Rick Wagoner:

"Mistakes have been made and lessons have been learned. Today our CEO Rick Wagoner is leading the best management team since Alfred Sloan. It is a difficult job that requires balancing the needs of customers, employees, retirees, shareholders and dealership employees. Given the hand that exists, it appears that Rick Wagoner and GM are taking very bold steps and they are making a difference. We believe that Rich is a man of excellent integrity. His values are that of the best of America. He is an excellent leader, father, husband and human being. He needs and deserves support for the enormous job he is doing." The ad is signed by individual GM National Dealer Council and GM Dealer Advisory members.

Thought the advertisement was good and I welcomed hearing what they had to say. Due to the many rumors about Wagoner serving out his last days, I think that sticking with Wagoner during these tough times is the right direction. If you have not read Fortune's Alex Taylor on the subject, you should (He writes: "Why, after the UAW has been feasting on the largesse of GM chairmen for four decades, does Wagoner get accused of giving away the store?")

Back to the advertisement. I was struck by the references to Wagoner as spouse and parent in such a business-laden declaration. Those kinds of personal statements usually end up in obituaries or retirement speeches. I presume that the dealers were attempting to round out the full shadow of the man that goes beyond his nightmarish day job. Being that GM has those true middle American roots, the values being espoused seem to fit but definitely took me aback. We rarely get a glimpse of CEOs beyond the corner office unless they are being sued for divorce.

I do know one thing. If GM's CEO were a woman, an advertisement like this would never mention how good a job she did as a wife and mother.

Thursday, April 06, 2006

Politicians and CEOs

When I was in Vienna this week to launch my book, our affiliate Hochegger/Com honored the most admired Austrian CEO from their research at the event. The CEO of energy group OMV, Wolfgang Ruttenstorfer, was number one in the Austrian survey. He spoke about what CEOs need today to be successful. Since he spoke in German, I only heard what he said through someone else. Apparently he said that communications was critical to being a CEO in the 21st century. The oil major CEO remarked that he learned about the importance of communications from his government position which he held for three years. As a politician, Mr. Ruttenstorfer learned quickly about communicating daily with diverse and demanding constituents. Without that prior exposure, he said the CEO job would be very much harder.

I continually see the narrowing of the gap between politicians and CEOs. In many ways, people are voting for each every day. Politicians have to win daily support from constituents and CEOs have to win over customers to buy their products. Politicans have to get people to believe them enough to vote in their favor and CEOs must persuade stakeholders to support them by buying their stock, joining the company or giving them the benefit of the doubt in bad times. As things are going, I would not be surprised one day to see politicians with corporate governance advisory boards and CEOs running for election every four years. How crazy would that be?

Wednesday, April 05, 2006

To Separate or Not to Separate?

We all know the story of how Enron had a separate chairman (Ken Lay) and CEO (Jeff Skilling). The un-perfect company actually followed good corporate governance procedures by disallowing executive power to remain with one person. We all know the unhappy ending to this story.

Over the past several years as more scandals unfolded, there has been increasing discussion in the media about separating the two positions in an effort to curb CEO power. Alas recent research noted in Harvard Business Review (April 2006) found that there is no statistically significant difference between companies that have two people or one person at the top. The authors used stock price and accounting income as their metrics (Yale professor Roberta Romano, Yale Journal of Regulation). Similarly, Institutional Shareholder Services (ISS) has been unable to find a correlation with market performance for separating the two roles.

On the other hand, when we asked this question in 2003 in our reputation research, we found a pattern leaning towards separating the chairman and CEO roles. Nearly two-thirds of U.S. business influentials reported a preference for splitting the two roles (63%) vs. less than one-fifth (17%) who thought they should be combined. A fairly large group -- 20% -- remained undecided. I have always wondered if respondents were offering what was an expected response in light of the abuses of CEO power at the time.

I think it is good that evidence is still unclear that splitting the roles makes a difference. Decisions such as this depend on the company’s culture and individual personalities. Citigroup’s chairman Sandy Weill is soon to depart (April 18) and there is no doubt that while he delivered on what he said he would do(no interference), Weill and current CEO Chuck Prince are probably looking forward to an amicable divorce and less close quarters.

Monday, April 03, 2006

Blogging from Vienna

Tomorrow I will be speaking at the Vienna Stock Exchange on CEO Capital. My book on CEO reputation was just translated and launched by Linde International.

Although many Austrian CEOs are not well-known worldwide, I found out a few interesting facts. The energy drink Red Bull is Austrian and founded by CEO Dietrich Mateschitz, one of Forbes' wealthiest people. This brand is probably Austria's most global. Other fine companies with less global recognition include energy group OMV, Erste Bank and Wienerberger (the world's biggest brickmaker).

Back to the Wiener Borse Ag. The Vienna Stock Exchange was actually founded by a woman in 1771. Holy Roman Empress Maria Theresia's fine reputation was marked by major reforms which modernized the country's administration, reorganized the army, eased the life of the peasants, introduced compulsory school attendance and abolished torture. She set the standard for Austria today by exhibiting an outstanding sense of responsibility, credibility and diligence to the end of her days. Her impressive legacy carries on as noted in yesterday's The New York Times Business section (Off the Charts by Floyd Norris). When it comes to best performance for country stock market indexes around the world, the greatest change and number one leader comes from none other than Austria (+375%). Comparatively, the U.S. stock market index has increased only +59% since September 2002. Maria Theresia knew what she was doing. The Austrian stock market is as hyper-caffeinated as Red Bull.

In light of all this financial success, Austrian business is trying to now distance itself and its reputation from its biggest banking crisis in decades -- the Austrian Trade Union's ownership of Bawag bank and its risky business dealings with Refco. The good news is that the trade union, OGB, is trying to sell the bank. The Bawag bank is a blemish on Austria's reputation but quick action might be able to lessen the sting.

Without a doubt, I will be asked about how long it takes a company or organization to recover its reputation.