How a CEO’s reputation can shape corporate reputation
It’s old news now, but the salutary tale of Uber and Travis Kalanik still has a lesson to impart on the toxic effect a CEO can have on even the brightest organisation’s reputation. In the age of the rock star executive, the CEO’s behaviour and personality are arguably more impactful than ever on corporate reputation.It is a statement that CEO´s reputation affects corporate reputation.
How CEO reputation affects corporate reputation?
The cult of celebrity has led consumers to the anthropomorphise businesses, so that a company’s image becomes an extension of the personality at the top. Whatever the reality in the boardroom, Steve Jobs was Apple; Jeff Bezos embodies Amazon; Richard Branson is Virgin. And no one can consider Tesla without accounting for Elon Musk.
Tesla and Elon Musk
Tesla’s mission to accelerate the world’s transition to sustainable energy is laudable, and has made Musk a hero to many. But his capricious tendency to lash out at detractors on Twitter undermines Tesla’s efforts to propel the electric revolution.
After Musk’s “impractical” offer of a mini-submarine to rescue the boys’ football team trapped in a Thai cave was branded a PR stunt, a libellous slanging match ensued with one of the rescue divers.
Musk’s reputation as an impetuous tweeter had a direct impact on Tesla, when he posted an unsupported claim that he had “secured” funding to take the company private. Tesla fell 39 points in the Axios and Harris annual reputation poll as Musk’s questionable decision-making, production issues, and executive departures all impacted.
It’s one thing for a CEO to marry their reputation to that of a company they founded, and quite another to mould an international corporate behemoth, with thousands of employees and a lengthy roll call of previous CEOs, in their own image.
Unilever and Paul Polman
Step up Paul Polman, who at the beginning of 2019 handed over the reins of Unilever to new CEO Alan Jope after 10 years in the top job. Polman’s reputation as a far-thinking, socially conscious executive is founded on the Unilever Sustainable Living Plan, a blueprint for expanding the business while increasing positive social impact and ‘decoupling’ growth from the company’s environmental footprint.
The new form of capitalism espoused by Polman, aimed at allowing everyone to live well on the planet’s sustainable resources, has put Unilever at 39 in Fortune’s 2019 ‘World’s Most Admired Companies’ list.
CEO´s reputation is the fourth factor to determine corporate reputation
These are by no means isolated examples. Research by Weber Shandwick found that the reputation of a company’s leader is the fourth most important factor in determining the reputation of the company as a whole, topped only by its quality of goods and services, financial performance, and the industry it operates in.
Fifty, thirty, or even ten years ago, executives were faceless, and the majority of consumers had no idea who controlled the world’s largest corporations. The rise of the mega-growth start-up, and the 21st century’s cult of personality – encompassing everything from reality TV to referendum results – mean that rock star CEOs now merit media attention, and catapult their companies to the front pages.
But bad press in a 24/7 media cycle, where a social media account has the same publishing power as a national newspaper, can be worse that no press at all, and rock steady is more useful than rock star when it comes to protecting reputation. Businesses may find they need to choose between profile and profit if they are to succeed over the longer term.
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