MakovskyTuesday, September 1, 2015
The CEO is the standard bearer for the company, a simple truth. The public’s perception and reputation of the company is shaped by how the CEO appears in public and personally expresses its vision and values.
Beyond the SEC-mandated reporting requirements, stakeholder interest in the CEO as an individual has grown exponentially in recent years. We can define stakeholder as anyone who has a vested interest in the company; a group which includes shareholders, employees, business partners, and vendors to name but a few.
In addition to the traditional means of communications, new channels and formats are constantly emerging, accelerating the pace at which communication happens. Given this backdrop, CEO communications are a critical factor in a company’s success.
Today’s CEOs must embrace communications as part of their leadership responsibilities. They must be prepared to master new communications technologies and to engage stakeholders through all channels while adhering to the regulations governing corporate disclosure.
We offer some insights:
Get Real – The CEO must speak in his or her own voice. Authenticity is critical to generating interest, acceptance and enhancing corporate reputation. Investing legend Warren Buffett is a classic example. His annual letter to shareholders is one of the most widely read and dissected of its kind. In his most recent letter, the “Oracle of Omaha” dispenses investment and common sense advice delivered in a folksy style. For instance, he writes: “Periodically, financial markets will become divorced from reality – you can count on that. … never forget that 2+2 will always equal 4. And when someone tells you how old-fashioned that math is — zip up your wallet, take a vacation and come back in a few years to buy stocks at cheap prices.”
Accessibility – This is a multi-channeled media world, which operates 24 hours a day while business is transacted across multiple time zones. British entrepreneur Richard Branson is one of handful of CEOs to have harnessed the power of social media to communicate his vision for his sprawling empire. In addition to writing every word, Mr. Branson utilizes virtually every form of social media and is one of the most widely followed executives on the planet. In an interview, he said, “I think companies that don’t take, the Internet, or Twitter, or Google Plus, seriously do it at their own peril. It’s also great fun. I mean I’ve got I think two and a half million followers now on those various sites. I love interrelating with them. I love the immediacy of it. You know, I get feedback if one of our companies is messing up somewhere and we can jump on it. And we get lots of positive feedback as well, which is very encouraging and makes one feel that everything you’re doing is worthwhile. So, you know, it’s a fantastic medium.”
Accountability – Companies make mistakes. They get things wrong. In addition to taking responsibility for past miscues, the CEO must put forth a plan to remedy the situation as well as offer credible yardsticks by which the success of that plan is gauged. Earlier this year, chemical giant DuPont tangled with powerful investor Nelson Peltz in a bruising proxy fight, which DuPont ultimately won. During the battle, Mr. Peltz leveled criticism at the company, taking it to task for the lack of guidance and inefficiencies, among other matters. In a recent present, DuPont chief Ellen Cullman told those in attendance: “As we capitalized on the opportunities of our three strategic focus areas, we’re working towards growing revenue from $28.5 billion to $40 billion to $45 billion by 2020 reflecting a top line growth rate of 6% to 8% compounded annually. Once we complete the separation of Chemours and launch the next generation DuPont, we’ll be coming back to you with more robust details around that strategy… Once we made the decision on Chemours, we essentially took a clean sheet of paper and used our fresh start initiative to redesign the organization. Together with a leading consulting firm, we aim for a structure that would optimize effectiveness and efficiency, connecting of more closely to our markets and/or customers