What a start into the New Year this time: The climate crisis has dominated the conversation in social media, with discussions ranging from the purpose of fireworks in Germany to devastating bushfires in Australia. Yet, we are still “only scratching the surface”, reflects Greta Thunberg. We can now say that it is a Must for every business executive to not only comply, but also clearly articulate a position on environmental, social and governance aspects (ESG). Interestingly, this view is increasingly feeding into established studies such as the annual Harvard Business Review CEO ranking. ESG criteria now account for 30 percent of an executive’s ranking, reflecting the rapidly changing priorities of many investors. Due to the growing importance of ESG, for example, Amazon CEO Jeff Bezos, number one when it comes to financial performance, dropped out of the Top 100 ranking entirely. Signals are clear: Executive reputation is now more than ever driven by sustainability. Emergent leadership is necessary that let’s go of the old belief that, ultimately, only financial metrics count. Instead, purpose-orientation comes into focus – driven by employees, customers, investors and communities alike. 2020 is the year to start acting on this. The question is how? Take a look at the CRO.SWISS platform that offers hands-on workshops and a platform for exchange on both the emergent leadership role and a how-to approach for executives that want to increase their reputation by building a presence in digital media from scratch.
The time of Hidden Champions is over
Until recently, it was quite chic and appropriate for entrepreneurs to literally keep a low profile as hidden champions. Perhaps for fear of criticism and uncomfortable questions some preferred not to give an interview if in doubt. Comments on the political situation or even on competitors were considered as a taboo. However, the digitalization of media has completely turned the tide: Social media not only bring presidents into office, but also have a significant influence on the reputation and perception of managers. Today it is virtually impossible to build up a high reputation as a manager without an existence in the social media. Participation in the discourse is a necessity. Customers, employees and investors are interested in whose products they buy, who they work for and who they invest in. Current analyses show that CEO reputation today is fed primarily by four dimensions: vision and leadership, responsibility for society, interest in the greater good and openness to showing oneself from a personal side. For those who take this to heart and don’t leave the field to others, there are huge opportunities to free up themselves by providing orientation in the jungle of complexity.
Around 750 million people today use the two professional platforms LinkedIn and Twitter alone. Not only journalists, but also customers and employees of companies of all sizes and in all sectors are certainly involved. According to an ECCO study published in September 2019, Swiss CEOs rank 5th worldwide: However, only a few exceptions actively use social channels and position their entire company on their own topics. From the Swiss Market Index (SMI), these are mainly three CEOs: Vas Narasimhan of Novartis, Sergio Ermotti of UBS and Alain Dehaze of Adecco.
Hurdles to overcome
According to our own studies, there are above all three arguments that make managers hesitate:
- Many are currently overloaded, the uncertain economic situation requires the focus on the operative business. In this environment there seems to be no time left to deal with other new topics.
- Another group of managers wants to remain modest or humble – they do not want to present themselves in social or other media. Representatives of hidden champions such as Franz Haniel, Chairman of the Supervisory Board of Franz Haniel & Cie. GmbH even claim not to give interviews as a matter of principle, as they allegedly have nothing to say about public affairs.
- Perhaps the largest group is simply unsettled behind closed doors because they lack experience: What tools do you need to become active in social media? Shouldn’t the communications department do that? And how big is the risk to unintendedly get into a shitstorm?
Employees, customers and investors call for participation
On the other hand, there are many stakeholders who are massively demanding the participation of entrepreneurs and managers in public conversation: Today’s employees want to work for a leader who exemplifies values and gives the company a face. By purchasing products, customers do not only want to increase the producer’s profit, but also recognize the added value that results for the community. And interestingly, investors like Larry Fink, CEO of the world’s largest asset manager Blackrock, are asking CEOs to address pressing social and economic issues. In his annual letter to CEOs, he writes that social media is creating public pressure on companies “today faster and with greater reach” than ever before. In view of the current political and economic tensions, Blackrock CEO Fink believes that publicly visible leadership among managers worldwide is essential.
Clarity through communication
If we first shed some light on the time argument: A strong social media presence does not necessarily cause a load of additional work – even more, it can provide significant relief. Not for nothing do German top managers like Dieter Zetsche (ex-Daimler CEO) and Joe Kaeser (Siemens) say that they regularly invest up to 30 percent of their time in communication. Joe Kaeser in particular vouches for the fact that pulling out of the public discussion harms the company in the long term and, with this approach, sometimes actively seeks an exchange with journalists. Platforms such as LinkedIn and Twitter open up the possibility of building up your own network directly and without detours. No one today has to wait for an editor to call or buy expensive conference tickets to sit down with opinion leaders at a table.
But social media can also provide relief on a personal level. This does not only apply to the bosses of large companies who can rely on a staff of communication employees. For example, Matthias Schulze, managing director of the small craft company Malerfachbetrieb Heyse from Altwarmbüchen near Hanover, Germany, describes how things can go: After a personal crisis and an almost 4-year break due to burnout, he has completely restructured his life and his company. As he describes in his blog, today he manages to achieve more with less work. For him, social media and his employees are the key to success. It is about changing the framework conditions for everyone, breaking down structures and reshaping the future.
New (thought) leadership approach at Novartis
The first CEOs in Switzerland are also pursuing a similar overall entrepreneurial approach. A prominent example is Novartis CEO Vas Narasimhan. In July 2019, he announced the management concept “Unboss”, which is already regarded as one of the most exciting experiments in the European corporate sector. The aim is to convey a radical change to the 105,000 employees – getting rid of traditional corporate hierarchies with rigid reporting lines and, instead, launching independent, self-organized work in teams. Narsimhan does not conduct an ongoing dialogue with its employees primarily via internal, closed channels, but via LinkedIn, which is open to all. There, with over 150,000 followers, he has already established one of the largest personal channels in the German-speaking world and, having initially concentrated on pharmaceutical topics, is increasingly focusing on leadership: “Unboss – Join me on my journey as a CEO reimagining leadership” is the name of his new monthly newsletter, in which he reports on his own journey and his changing role as an executive. Within just a few weeks, he has already built up over 33,000 subscribers here as well (as of 2 January 2020). He is also one of the few CEOs in Europe to have a personal Twitter account under the handle @VasNarasimhan. With over 11,000 followers, it also reaches a broad elite audience, including many journalists and politicians who like to exchange topics via Twitter.
The bag producer Freitag from Zurich is also pursuing a similar transformation project: the company with around 200 employees is committed to self-organization and has been working according to the holocratic organizational model since 2016. As Culture Coach and Creative Director, Pascal Dulex is one of those who cultivates public dialogue and calls for new forms of cooperation via both LinkedIn and podcast appearances.
Is the close connection between radical transformations and open communication via social channels perhaps a coincidence? Rather not: In a study conducted by the University of Hohenheim in 2018, 83 percent of the top 500 companies from German-speaking countries surveyed said that management communication is ultimately the lynchpin of whether transformation succeeds at all.
Reputation as a management task
In addition to the transformation projects that companies impose on themselves to make the vision of new leadership and new work a reality, there are tangible reasons why CEOs and executives should focus on their reputation and increasingly on social media. Top managers estimate that 44 percent of the market value of a company depends on the reputation of the CEO. 88 percent say that a CEO with a high reputation attracts new investors, the business magazine Forbes, in cooperation with the agency Weber shandwick, determined as early as 2017. On the other hand, it is to a large extent also about the internal impact:
- 72 percent of all executives say they would rather work for a CEO active in the social media. They are interested in direct exchange and greater transparency and agreement on what the company wants to work towards.
- If the CEO is active in social media, the probability that employees also use social media to boost sales increases by 57 percent.
- The attractiveness of companies in the recruiting market and in employer branding is increasing at roughly the same rate: by 58 percent, the attention and importance of the Y and Z generations increases when managers of a company are socially visible – because today the younger generations inform themselves almost exclusively through social channels, while only a single-digit percentage of the under 20-year-olds regularly take a look at a print medium or consume news on television.
These figures come from analyses by Weber Shandwick, LinkedIn and interviews from the Behind the Screen Podcast – and are topped by a figure from the Edelman Trust Barometer 2019: 71 percent of the employees interviewed there say that CEOs should also seek solutions to political problems instead of waiting for politicians. At 11 per cent, this figure also recorded the highest increase compared with the previous year among all the criteria examined.
Social media are no longer about self-portrayal or the often quoted “personal brand”. Nor is it a substitute for the cooperation with sometimes dubious “spin doctors”. Instead, it is about participating in the important discussions about the future of our economy and society, striving for an open cooperation with different stakeholders and further developing our own mindset in order to contribute to strong, innovative and inspiring organisations that show responsibility and take on the task of securing the future. In his new book, bestselling author Simon Sinek describes the economy as “Infinite Game”, i.e. one that knows no winners or losers, but in which the players come and go. Companies that are resilient and remain long-term are all geared to an evolutionary purpose, are open to cooperation and do not just focus on numbers [Link zu Purpose Artikel]. This is in line with the expectations of leading macroeconomists and executives, as the Reputation Institute determined in its current Makrotrend Study 2019: At the top as drivers of the reputation of C-level managers are fulfilling the company’s purpose and networking with relevant market influencers in order to be involved in all topics that directly drive the future of the company right from the start. In an analysis of 5,000 CEOs carried out in October 2019, management consultancy McKinsey also comes to the conclusion: “Excellent CEOs spend time thinking about the purpose of their company, articulating and championing it, because it relates to the major effects of daily business operations”.
Modesty is out of place
Modesty is therefore out of place when it comes to changing the world of work or tackling CO2 problems in the context of the climate debate. Employees, customers and investors explicitly expect corporate leaders to show themselves and make their contributions visible. The time of the long praised Hidden Champions has passed in this respect.
So, there remains the third concern that managers often carry within them: uncertainty in dealing with the social media and the associated fear of making thoughtless mistakes. What is to be considered in this respect: Before one comes as a newcomer at all into the danger into a so-called Shitstorm to get, a much larger hurdle is to be taken: Build your own visibility and establish a relationship with the relevant drivers and influencers. The amount of information on the net is now far too great to be consumed in even a fraction of it. The hype around digital marketing is broken, instead we live in a time of content shock, in which it is important to shine with relevance instead of just a lot of information.
A research team from the University of Duisburg-Essen under the direction of Prof. Milad Mirbabaie, who presented an analysis of original tweets of leading CEOs from the USA for the first time at the 14th International Conference on Business Informatics in Siegen in February 2019, came to the same conclusion. This study applied the well-known and scientifically proven analysis model of the reputation quotient to 3,604 Tweets of leading US CEOs such as Tim Cook (Apple), Satya Nadella (Microsoft), Sundar Pichai (Google) or Elon Musk (Tesla), concluding that the reputation of a CEO in social media is driven primarily by the areas of vision & leadership and social responsibility. Other topics such as products & services or financial performance, which are often the focus of marketing or corporate communications, score fewer points. The study also revealed that CEOs have discovered two new fields of reputation that are not yet relevant to corporate reputation: This is on the one hand the common interest – with allies and also competitors – in interesting aspects of the respective personal topic. On the other hand, personal aspects, such as Sundar Pichai’s assessment of the forthcoming World Cup, also play a key role in enhancing personal reputation.
From this perspective as well, it is therefore important for CEOs to consciously deal with the topic they wish to occupy. This requires some preparatory work in order to find the interface between the company’s viewpoint and personal preferences. In addition, it is important to match the individual strengths with the needs of society and to develop an interesting niche, the personal story. Ultimately, this is the basis for every Social CEO to get involved in the public debate and thus tap into the enormous potential for liberation of a high reputation.
The article first appeared in CRO – the Magazine for Chief Reputation Officers (December 2019). Join the platform here.
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