CEOs who judge PR performance according to Most Admired list havemisunderstood PR

Last week, corporate communications professionals across America snatched up their copies of Fortune magazine, flipping urgently to the special section on America's Most Admired Corporations. Not because they believed they would learn anything meaningful about their companies' reputations, but because some idiot CEO - who obviously understands PR about as well as I understand the rules of curling - decided the communications executive's bonus would be based, in part, on the company's ranking.

Last week, corporate communications professionals across America snatched up their copies of Fortune magazine, flipping urgently to the special section on America's Most Admired Corporations. Not because they believed they would learn anything meaningful about their companies' reputations, but because some idiot CEO - who obviously understands PR about as well as I understand the rules of curling - decided the communications executive's bonus would be based, in part, on the company's ranking.

That's absurd in at least three ways.

First, it's absurd because the survey itself is absurd. It may play a vital role in massaging fragile CEO egos, but as a measure of corporate reputation, it's about as credible as a financial statement audited by Andersen. The most profound conclusion one can draw from the questions the Fortune survey asks, and the stakeholders it queries, is that the financial community admires corporations that produce great financial results. Excuse me if I don't consider that a revelation that will forever change the way business is conducted.

Second, it's absurd because the survey is so easy to manipulate. The first corporate PR executives who were charged with improving their companies' standing figured out pretty quickly how to do so most effectively, and it had nothing to do with improved PR. The best way to rise a few places is to make sure the company's directors fill out their surveys, because the pool is so small that getting all 13 directors to respond - giving their own company 10s across the board - can bump a company three or four places higher than it would be if only five or six directors responded.

(I once heard an IR executive claim his company had enlarged its board from 13 to 17 people in an attempt to leapfrog the top company in its category.)

And third, it's absurd because PR people have little or no control over the "eight key attributes

of reputation Fortune considers. Corporate communications people may play a role in how the investment community views financial soundness, use of corporate assets, long-term investment value, or quality of products and services, but others (the CEO, for example) have a much larger role.

Why does this matter? Because it's indicative of an attitude that says reputational research is useful not as a diagnostic tool (to help improve relationships), but as a tool for self-aggrandizement, to make companies look better than they really are.

It's also indicative of the attitude too many CEOs have when it comes to corporate reputation: That the whole matter can be delegated to the PR department, which can massage the company's image and create a pretty facade. That's so much easier, after all, than making the kind of substantive changes in behavior and performance that would drive real, lasting reputational improvement.

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