END OF THE CEO CULT?

Corporate PR heads rethink how much a CEO should personify a company.

Corporate PR heads rethink how much a CEO should personify a company.

In the boom-era bliss of the late 1990s, communicators tending to the reputation of a company's CEO had an easy job. The recipe was simple: trot out the executive wherever there was a podium, announce the latest boffo financial results, and wait for Wall Street and the media to extend the inevitable bouquets. But now, in the wake of a handful of hugely publicized bad-apple cases, CEOs - and by extension their reputation custodians - find themselves in the crosshairs. They face more intense scrutiny than ever, from both a fraud-scarred public as well as a no-longer-smitten media only too eager to disparage the same leaders they were lionizing 30 months ago. The cult of the CEO - for years the business world's religion of choice - has largely been abandoned. "No question about it, CEOs are the villains right now," says Oracle VP of worldwide corporate communications Jim Finn. To a certain extent, CEOs have always been the standard-bearers for company and brand reputation. While this may not have been explicitly spelled out in the job description, the CEO has traditionally been expected to serve as the monitor of a company's internal and external reputation - a keeper of the brand, if you will. But in the 1990s, many CEOs became almost synonymous with the hopes and plans of their organizations, hobnobbing with celebrities and gracing as many magazine covers as teen idols. "It was a unique moment in time," recalls Weber Shandwick Worldwide CEO Harris Diamond. "CEOs were rock stars." Adds Torrenzano Group chairman and CEO Richard Torrenzano, "It's easier to write about one person than a team of people." A sudden shift As bubbles are wont to do, this one burst suddenly and unexpectedly, catching CEOs, their reputation-management gurus, and the media off guard. The fallout nearly three years later? The cult of the CEO is more fringe sect than organized religion, more street-corner quartet than choir. Whether the cult is entirely dead, of course, is a different question. "You probably should ask the people who created it in the first place: the media," says Ketchum partner and global corporate practice director Chris Atkins. "I don't think CEOs ever wanted that kind of scrutiny in the first place, even when their egos were being stroked by Money magazine. The cult will continue to diminish because you'll see fewer CEOs willing to take the risk of greater visibility. It's a self-preservation strategy more than anything else." While nobody truly expects that CEOs will retreat too far into the background - "the CEO has always been, and will continue to be, the personification of a company," asserts Unisys SVP, corporate communications Dick Badler - it is unlikely that many companies will ever again allow their brand and image to be inextricably bound to a single individual. "When the CEO acts as the steward of a company's reputation, you have a great situation. But when the CEO's reputation is directly tied to that of the company, it's a problem," contends GCI Group president of the Americas Bob Pearson. "Look at Martha Stewart. With her company, it's either her or nothing." As a result, corporate communicators tending to the reputation of CEOs are dealing with an entirely different range of issues nowadays. It's a safe bet that few communicators were intimately familiar with their company's corporate-governance policy until a few months ago. "I'm getting a lot of 'what exactly does our business-conduct office do?'" quips Andy Lark, VP, global communications and marketing for Sun Microsystems. And then there are the hot issues du jour, which sometimes require a CEO to take a public stance that could negatively impact reputation. "Like stock-option expensing, for example," Lark says. "It's easy for a CEO to say 'I'm for it.' But if they're against it, how vocal do you let them get? When arrows are flying, you don't necessarily want to stick your head above the parapet." Communicators are still adapting to the new CEO-as-the-embodiment-of-everything-evil environment. Most, however, believe that maintaining and even strengthening CEO and corporate reputation during a down economic cycle is not the Herculean task some have made it seem. Being factual and detail-oriented in all internal and external communications is a good start. "Companies really have to show their work, just like in fourth-grade math class," says Peter Verengia, president of Fleishman-Hillard's Eastern region and co-chair of the firm's corporate credibility advisory practice. And, predictably in an era characterized by corporate mistrust, even the smallest suggestion of hype or self-aggrandizement should be avoided like the ebola virus. "The least effective way to get somebody to think you're trustworthy is by saying 'I'm trustworthy,'" notes Atkins. "You gain trust by acting in a trustworthy manner over time. It's not something that can be solved by the end of the fiscal year." Most importantly, communicators stress that the current poisonous atmosphere cannot be used as a rationale for CEOs to zip their lips. The overwhelming consensus is that such a strategy can only lead to the steady deterioration of both corporate and CEO reputation - not to mention the creation of a reservoir of suspicion for when the company eventually decides to start talking again. "Don't confuse a down market with a time to be quiet," says Pearson. Pearson and others do concede that it has become significantly more difficult during the last two years to advocate taking some risk in communications. "Especially over the past summer, many companies have sort of gone into communication hibernation," says Verengia. "A lot of organizations figure that since so much of the corporate news is bad, the best choice is to stay out of the line of fire and try to tell their positive stories a few months from now." Adapting to media's new attitude That, of course, assumes the media will have budged from its all-negative, all-the-time mindset by then. Indeed, adapting to the media's newly hypercritical attitude towards the corporate world has proven the biggest challenge for many reputation stewards. "The media tends to go to extremes," notes Diamond. "Right now, we're dealing with the backlash." Verengia compares the current situation to a crisis of faith from a different era. "It's like Watergate for corporate America," he says. Many communicators decry the media's fickle nature while simultaneously acknowledging the obvious: that there's not much they can do about it. "Winners used to help sell magazines. Now crooks sell them," notes Lark. "You're seeing the darker side of the cult at the moment. I mean, where would Fortune be without CEOs?" Given that the hostile external atmosphere is unlikely to change anytime soon - witness the raft of "Oink Oink" headlines after former Tyco CEO Dennis Kozlowski was paraded before the cameras in handcuffs earlier this month - most reputation pros have advised CEOs to turn their focus inward. Leslie Gaines-Ross, Burson-Marsteller's chief knowledge and research officer, describes meaningful interaction with employees as "the hardest part of the job" for most CEOs. "Activities like carving out time to speak with employees around the world, walking the halls, answering e-mails, casually dropping in on meetings - certainly now, these should be a large part of any leader's job," she says. "Companies that have been successful over the last 15 to 20 years have generally been run by quiet leaders who know how to get the troops to understand the company's mission," Pearson adds. "You look at companies like GM, which devotes a huge amount of resources to internal communications. Did Tyco, with all of its far-flung acquisitions, do the same? I'd be shocked if they did." In the end, most communicators believe the outrage currently directed towards CEOs, and the corporate world in general, will relent relatively soon. Another media-fueled scandal will take its place, the theory goes, and a nation will shake its collective fist with outrage at, say, shady investment bankers. "What you must remember is that 98% of CEOs and directors are honest and horrified about what they have seen and read," says Atkins. And while it will clearly take some time for CEOs to restore public trust in their integrity - and outright CEO worship of the sort that was seen in the late 1990s isn't likely to happen ever again - nearly all communicators believe the CEO will remain a compelling figure in the mind of nearly every constituency. "Strong leadership is always necessary and it's always what people want to see," Finn says. "What has changed is the hype element around certain personalities. The challenge of leadership will never change, but the reporting and analysis of it won't be as People-magazine driven." ----------------------- Airline strives to explain itself after bankruptcy filing US Airways' bankruptcy filing in August would have necessitated an exhaustive communications effort under the best of circumstances. But with a relatively new management team in place, the post-filing communications push became as much an exercise in CEO positioning as in investor or media relations. SVP of corporate affairs Chris Chiames joined the beleaguered airline in May, two months after president and CEO Dave Siegel arrived from Avis Rent-a-Car. Given that prior management was not exactly renowned for its communication skills, Siegel pledged that his contact with US Airways' many constituencies - from travel agents and elected officials to airport vendors and passengers in far-off locales - would be more substantive than the occasional impersonal e-mail fired off from a gilded corner office overlooking Arlington, VA. Chiames credits Siegel for immediately endeavoring to fill the communications void. "He saw that the company was in crisis, and that there was a need for leadership to step up and get people to follow," he says. The post-bankruptcy PR effort, then, was designed both to affirm Siegel's leadership and to clarify how the filing would affect the company's future. The filing itself, expected for months by industry analysts and pundits, was formally announced on Sunday, August 11 at 5pm EST. Right then, Siegel entered a meeting with officers to personally lay out the company's strategy and vision moving forward. This was immediately followed by a conference call to 500 field managers. "It was important to put managers in the position where they could say, 'I just got off the phone with Dave Siegel - here's what's going on,'" Chiames recalls. At the same time, detailed information packets were e-mailed to customers and employees under Siegel's signature. He also recorded a phone message designed to calm the many travelers who flooded the airline's reservation line with calls. After spending most of August 12 in bankruptcy court, Siegel set off that night to US Airways' three hub cities - Philadelphia, Charlotte, and Pittsburgh. He held press conferences in each, fielding questions from the local media and personally sitting down with employees. "Everybody needed to hear 'you are very important to us,' and they needed to hear it from Dave himself," says Chiames. "A CEO can't really convey that he is interested and that he cares from miles and miles away. Dave had to be out there as an ambassador for US Airways." Whatever the future holds for US Airways as a company, Chiames promises that Siegel will remain as accessible as possible. "What we did [at the time of the bankruptcy filing] was unprecedented for this company," Chiames says. "Everybody who has a vested interest in the success of US Airways wants and needs to know that there's somebody in charge. This can't happen if Dave is hiding behind the curtain like the Wizard of Oz."

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