Getting to Know the CEO
What do today’s CEOs care about? It’s a burning question for any agency seeking to be considered indispensable. Fortunately, some initial answers are there for the taking. Recent survey data reveals that several of the issues preoccupying CEOs are ones that our industry is especially well placed to help address.
Take reputation. As our economy pulls out of the recession, and as CEOs express more confidence about the economic outlook, many remain concerned with public perceptions, both of their organizations and of their leadership. According to the Conference Board’s report on the “Top 10 CEO Challenges in 2010,” CEOs surveyed for the report put “corporate Reputation for Quality Products/Services” on the list of top challenges as well as the reputation-related task of improving customer loyalty. These concerns reflect executives’ recognition of the need to win over “recession-weary customers” by providing them with extra value.
It’s not an easy task. Although public impressions of corporate America are improving, a recent Harris Poll found that a full 81% still believe that corporate America’s reputation is either “not good” or “terrible.” Popular distrust of corporate leaders has also peaked through in the CEO pay scandals that have erupted this past year concerning firms that accepted TARP money. In another Harris poll, two thirds of respondents in six Western countries said they “held a worse opinion of leaders as a result of the downturn.”
Executive concern about reputation differs depending on industry and geography. In a global survey performed by Price Waterhouse Coopers, fewer than 10% of CEOs “believed that their industries experienced a ‘significant fall’ in trust.” Yet over a third of CEOs in banking and capital markets did. And “most business leaders believe that problems of trust are [restricted] to the banks and countries that experienced the worst banking crises”—in other words, to the US and American banks.
A second broad area of concern to CEOs right now concerns communications with stakeholders, and especially consumers. As the Price Waterhouse survey found, CEOs are keenly aware that consumers are changing before our eyes; to succeed, they think, business must keep pace. Almost half of CEOs perceived a “permanent shift” in consumer behavior, and eighty one percent of CEOs expected to “adjust their strategies in response to changing consumer behaviors. Significantly, North American CEOs were among the most concerned about this issue. CEOs globally were especially interested in engaging with consumers in product development, with 60% expecting that “consumers will play a more active role in product development in their companies, another dimension of value perceived by consumers and a trend represented by open source computing and social networks.”
Relatedly, CEOs seem to be drifting away from an obsession with serving shareholders and orienting themselves toward serving customers. As a recent article in Fast Company noted, “a small–but significant–minority of CEOs are now challenging the shareholder value obsession that has blighted the past couple of decades.” The article went on to quote Unilever CEO Paul Polman: “I do not work for the shareholder, to be honest. I work for the consumer, the customer. I’m not driven and I don’t drive this business model by driving shareholder value.”
It’s not that CEOs no longer care about serving stockholders. Rather, it may be that they’re feeling pressure from all sides. As the Fast Company article noted, “CEOs know they are under the gun as never before. Their average shelf life has shrunk dramatically, to the point where we find it amazing that any still consider the true long-term interests of the business.” Meanwhile, the challenge of communicating with stockholders has grown more complex. According to the Wall Street Journal, technology has allowed stockholders to communicate more effectively than ever before, making them a force to be reckoned with—and a clear and present danger to CEOs seeking to hang onto their jobs. “It’s easier than ever to vote the bums out of the executive suite,” the Journal observed.
The PR industry is well positioned to help CEOs deal with the issues that currently bedevil them: Reputation management, consumer insight, and communication with diverse constituencies. But there’s a larger point here. As an industry, we have to do a better job of paying attention to what CEOs our thinking. CEOs, after all, are the ones who set the strategic agendas at our clients and who ultimately craft spending priorities. And understanding the key issues facing a CEO’s industry is critical, too. While some overarching themes impact CEOs as a group, the concerns of a chief in the pharmaceutical industry, say, will diverge from those of a leader in the financial sector. Just look at what’s unfolding in these two industries: Pending FDA regulations could dramatically impact how pharmaceutical companies do business, while in the coming weeks the Senate is girding itself for a contentious showdown on financial reform. As a final note, we also need to help CEOs know more about PR. If the CEO is championing PR, that will trickle down to CMOS, legal, other important internal stakeholders. Get to know the CEO. And let’s let the CEO get to know us through brilliant contributions.
- In: Consumers, Reputation, Stakeholders
Great blog as always, Kathy. I’m all for understanding the CEO and creating stonger bonds with her/him. That said, there are still many clients who don’t have their own relationships with the CEO so we, de facto, aren’t allowed/empowered to create our own. Separately, I’ve run into more than my share of in-house counsels who feel threatened by the agency’s developing a relationship with the CEO. I’ll never forget one who told us, “Sorry, but you’re simply not (fill-in CEO’s name)-worthy.”
Thanks, Steve. I hear you and it’s unfortunate. If they only knew what they were missing…..
Thanks Kathy for the post on CEOs. I think that reputation is definitely on the top of CEO agendas and CEOs recognize that they need to play a bigger part in making sure that their reputations are protected at all times and in all places. Online reputation management is a greater factor than ever before as stakeholders can easily spread positive and negative word of mouth about a company’s behavior and its products. Making sure that your CEO is informed of what is being said online about the company adds an entirely new dimension to reputation management and one that CEOs must stay close to if they want to avoid surprises.
Thanks Kathy for the post on CEOs. I think that reputation is definitely on the top of CEO agendas and CEOs recognize that they need to play a bigger part in making sure that their reputations are protected at all times and in all places. Online reputation management is a greater factor than ever before as stakeholders can easily spread positive and negative word of mouth about a company’s behavior and its products. Making sure that your CEO is informed of what is being said online about the company adds an entirely new dimension to reputation management and one that CEOs must stay close to if they want to avoid surprises.
Great blog as always, Kathy. I’m all for understanding the CEO and creating stonger bonds with her/him. That said, there are still many clients who don’t have their own relationships with the CEO so we, de facto, aren’t allowed/empowered to create our own. Separately, I’ve run into more than my share of in-house counsels who feel threatened by the agency’s developing a relationship with the CEO. I’ll never forget one who told us, “Sorry, but you’re simply not (fill-in CEO’s name)-worthy.”