The recent tumble in Apple’s value following the announcement that it’s CEO, Steve Jobs, was standing down temporarily highlights the linkage between the standing of a business and its leadership. All About Brands’ Andrew Wigley explains why CEO reputation matters and shares his top tips on how CEOs can help bolster the reputation of their companies.
Business reputation has taken a bashing in the past couple of years and we’re about to see another bout of it in the coming weeks when the banks disclose eye-watering figures of senior management bonuses. Just as our politicians find themselves increasingly ridiculed, senior business figures are under attack.
According to a McKinsey study, public trust in business and a commitment to free markets has deteriorated (85% and 72% respectively).
Of course, it is easy to blame the banking crisis for undermining public confidence in business, but there are surely other factors. The disclosure last month that Apple’s Steve Jobs is to stand down a second time to allow him to focus on his health is a case in point.
Apple’s limited disclosure about its ailing boss is stirring a debate in the US whether corporate boards should be forced to tell investors about ill leaders and succession plans. This is, afterall, Mr Jobs second significant leave of absence. However, to my mind the well-being of a CEO and a company’s decision to disclose private information is a secondary issue.
What the furore highlights is the linkage between the reputation or standing of a business, and the reputation of the senior management or, to coin a phrase, CEO reputation.
As Chief Executive Steve Jobs is a great marketer and ambassador for Apple, and perhaps his greatest product is himself. But he is human, and one day he will leave the company for one reason or another.
But as an over-reaction to the news of Mr Jobs temporary departure, the value of Apple’s stock tumbled by 5 per cent wiping off $15bn.
Does that make really sense? Does Mr Jobs personal standing at the helm of Apple really equate to $15bn? Unlikely, but it does show how stakeholders (in this instance notably investors) place emphasis on the reputation of the CEO.
We all know this from our own business experience, albeit on a smaller plane than Apple’s! Business is often about relationships, and customers and clients buy who they can trust to deliver. That often comes down to you as the director or owner of your business. They buy you and your products or services because they like you.
It is true, however, to say that bosses have an obligation to bolster the reputations of their companies and to lead from the front, so here are my top tips on how you might do that.
1. Promoting and managing the reputation of a business is a company-wide issue and not just one for the corporate communications or marketing team. PR and Marketing will need to take the lead - but input from, yes, you the boss, and also other members of your senior management is essential. Ownership for building the standing and reputation of your business must be a collective responsibility and that tends to only come from firm leadership and direction.
2. Take time to explain to your employees and customers what your business and your brand stands for. If you’ve not done so, look at your brand strategy. Does your positioning make sense? Is your Vision, Mission and Values understood? Does your staff walk the talk?
3. Look at emphasising the ‘softer’ side of the business: highlight initiatives that support the community or are green, inclusive, educational or non-profit making in nature. This tends to boost morale among employees while help generate third-party endorsement.
4. Lastly, become aware of emerging issues and particularly those that can impact your reputation. Task your management team with carrying out a thorough review of your stakeholder relationships - that may involve revisiting and refining existing relationships, and most likely nurturing new ones.
The travails of Steve Jobs and Apple may seem a world apart, but therein is a lesson for us all. Along with your senior management, you, as the public face of your company, have a major bearing on the standing of your business.
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