|KETCHUM'S ONLINE MAGAZINE||YEAR 2008 ISSUE 3|
It has been apparent for some time now that corporations and their leaders are being held to higher standards than perhaps ever before. Advocacy groups routinely call companies to task for perceived “sins” ranging from providing minimal employee benefits to not giving enough consideration to how business affects the environment. And the impact of such criticism can go beyond negative media coverage to actually dragging down stock prices.
Clearly, corporations cannot adequately respond to these heightened expectations unless they have the proper depth of understanding. With this in mind, last summer, Ketchum conducted a survey that examined expectations of companies and their leaders around the world. Called Expectations & Frustrations: How the Public Perceives Corporations and CEOs, the survey polled Influentials – individuals who influence change in society – in 11 countries. While reiterating the well-established fact that public trust of the corporate world is low, the findings also reveal interesting insights about how and why various stakeholders might judge corporations.
We've already begun to put some of these insights to work for clients around the world, but we also want to share the results with a broader audience. The bottom line of the survey is that the expectations of Influentials often are not being met. But perhaps even more often, corporate performance against those expectations simply isn't being communicated well. Either way, there is a gap between what consumers expect and what they believe companies deliver. This issue of Perspectives outlines the survey's key findings and offers thoughts on how public relations and corporate communications, in particular, can help narrow that gap.
In our “Viewpoints” section, John Weckenmann, a Ketchum partner and head of the agency's North American Corporate Practice, talks about the “three E's” that are at the core of unmet expectations, and Rob Flaherty, a senior partner and Ketchum's newly appointed president, discusses the gap in expectations between developed nations and developing countries. We also asked Tom Nicholson, executive director of the Arthur W. Page Society, to talk about reactions to Page's recent white paper, The Authentic Enterprise, which also outlines some of the corporate communication challenges that our survey hits upon. Tom talks about reactions to the white paper in a one-on-one interview.
Finally, since many of our survey findings speak directly to the challenges facing CEOs, we've gathered a panel of experts whose jobs are to help chief executives communicate. These experts, who are either heads of corporate communications or speechwriters for CEOs, share their views and experiences in our “Roundtable” article. By and large, they point out that effective communication is just as much about what a CEO does as it is about what a CEO says. We wrap up the issue with a few key survey statistics in “Street Smarts.” To see how your expectations match up to those of Influentials around the world, take our brief poll just to the right of this letter. There, you also will find the results from our last reader poll on marketing to women.
Once you've read the issue, I'd love to hear your thoughts on our survey or your own related experiences. E-mail me at email@example.com.
Senior Partner and Chief Executive Officer, Ketchum
It's no secret that public trust in corporations and CEOs, as well as most other major institutions, is low. Ketchum's survey, Expectations & Frustrations: How the Public Perceives Corporations and CEOs, paints a fascinating picture of growing public distrust of the corporate world among developed nations while a more optimistic view prevails in developing countries. In both cases, it's clear that corporate and CEO performance consistently falls short of expectations. But the survey also makes clear that the demands on both corporations and CEOs are extraordinarily high – with influential consumers expecting companies to take on a growing role in solving societal problems and CEOs to be much more engaged in managing relationships with a wide range of corporate stakeholders.
Here are some of the key findings:
Society's most influential citizens are important voices. They are the people who attend public meetings, serve on community boards, write letters to the editor or post comments on blogs. Dubbed “Influentials,” these individuals may participate in society in various ways around the globe, but from Argentina to India, they are the people who help shape public opinion and, thus, public policy. That is why we chose to survey Influentials on their views of corporations and CEOs. Here, two top practitioners in Ketchum's global corporate practice talk about the common expectations of Influentials around the world and some key global distinctions. Also, Tom Nicholson of the Arthur W. Page Society answers our questions about the society's popular white paper, The Authentic Enterprise, which outlines the challenges corporate communicators face in communicating to a more expectant public.
What Influentials Want
Variances in Trust
Moving the "Authentic Enterprise Forward"
Environment. Ethics. Employees.
These “three E's” are at the core of the gap between public expectations and perceived performance. The survey findings show that disparities in these areas are driving the deep levels of distrust among those who help shape public opinion. And the gaps are considerable.
When it comes to the environment, consumers expect companies to be good stewards. But among the 11 countries surveyed, doing right by the environment is the least-met corporate expectation. In the U.S., 64 percent of respondents say protecting the environment should be an important focus for companies but only 21 percent think companies are good environmental stewards. On ethics, consumers expect companies to follow ethical standards and to communicate honestly. In the U.S., 86 percent of respondents rank honesty as very important, yet only 22 percent believe CEOs are honest. Expectations related to employee issues scarcely fare better. Some 85 percent of U.S. respondents ranked “compensating employees fairly” as important, but only 26 percent think companies do. A full 77 percent believe that being an “open communicator with employees” is an important CEO trait – although only 22 percent believe CEOs are open with employees.
What are the implications for corporate public relations?
With low levels of trust associated with corporations and CEOs, firms need to build credibility around all corporate communications – particularly those coming from the CEO. Transparency is important, as is using the CEO in a broad range of communications, not just when reporting financial results or in times of crisis. The CEO should be active in employee communications, too.
Recognize that what's often at issue is the actual corporate behavior, not perceptions of behavior. Communicators need to be rigorous in how they assess and advise management on reputation issues – particularly around the three E's. Advocate for, and contribute meaningfully to, corporate responsibility initiatives that address those vulnerabilities.
And recognize regional differences. The study shows major regional variations in trust levels and expectations for corporate and CEO performance – including views on CEO pay and even the desirability of the CEO job. All of these factors have implications for managing global reputation programs and need to be factored into communications planning.
Our global survey of influential citizens and their views of corporations and CEOs is sobering evidence that those of us in the reputation business have a lot of work to do. The findings paint a vivid picture of the growing distrust of the corporate world, especially in the developed Western nations.
The results reveal a giant gap between what corporations are doing and what the public expects them to do – in areas ranging from employee compensation and healthcare benefits to environmental stewardship and ethical behavior. That gap can be viewed two ways: (1) It's all bad news because companies are just failing to deliver, or (2) Expectations are very high because corporations play an increasingly prominent role in society. According to data from U.N. Global Compact reports, of the 100 largest economies worldwide, 51 are companies. Because of their increasing size and scope – and the inability of some governments to address big problems – much more is expected of corporations today. As a result, leaders have to recognize that, in a multi-stakeholder world, a company and its CEO must pay attention to more than just the financial performance of the company.
My favorite finding was the answer to this simple question: Would you like to be a CEO? Essentially we were asking, “Would you like the big corner office and all the perks right now with no long climb up the corporate ladder?” The answer in most of the world: No way. Only 33 percent of Influentials in Germany said yes; 67 percent said no. There were similar numbers in the U.K., Canada, France and the U.S. Only in Brazil, India and China is it popular to be a CEO (84 percent of those surveyed in India said they would want the top job).
That gap – between developed and developing nations – held true throughout the survey. Trust in corporations is in the 7-14 percent range in the developed economies, but 31-37 percent in Brazil, India and China. Why the disparity? Initial speculation might include the fact that there have been some painful and very high-profile corporate scandals in most of the Western nations. Some might suggest that influential citizens in developing nations are somehow inherently more trusting (a doubtful notion). Others will say that there are very different levels of freedom of the press from, say, the U.K. to China. It’s certainly true that in countries with an unbridled media, CEOs and their companies come under constant scrutiny, and it's getting more intense with the daily upbraiding in the blogosphere.
But here's another explanation: How popular are you if you are always cutting costs? How popular are you as an institution or leader if you have to fire people? Not very, and the fact is that the economy in the major Western countries is growing in the 0-3 percent range – a tough context for any business. In BRIC countries, the growth rates are 8-11 percent. Perhaps companies and their CEOs are heroes when they're offering countless jobs and raising the standard of living for thousands of people.
The bottom line is that trust is declining and expectations are rising everywhere. Business leaders have to acknowledge these expectations and focus more attention – and action – on stakeholders beyond investors. But if you're advising corporate leaders in the developed world, you have a steeper hill to climb. If you're in the developing world, maybe there's an opportunity to get out ahead of these expectations before a more moderate-growth economy discounts your current goodwill.
Last year the Arthur W. Page Society prepared a white paper titled The Authentic Enterprise that outlined the current environment for public relations and discussed the role of chief communication officers. Perspectives recently interviewed Tom Nicholson, executive director of the Page Society, about the research behind the white paper, its implications for public relations, and some of the reactions to the report. Here, Nicholson shares insights on what's next for The Authentic Enterprise, as well as his thoughts on what it takes for a corporation to become an “authentic enterprise.”
Perspectives: Before preparing The Authentic Enterprise, Page surveyed CEOs and asked for their thoughts about the role of chief communication officers. Was there anything in the survey findings that surprised you or particularly stood out?
Tom Nicholson: One of the most encouraging things was that so many CEOs thought about the importance of communications and linked it to the success of the enterprise. Communications is the one function that cuts across the entire enterprise and some view it as the glue that holds the various parts of a company together, keeps them focused on common objectives, and creates a culture for success. The best corporate communication officers understand this and capitalize on the opportunity to work in every area of the company, providing the CEO with valuable feedback on attitudes, opinions, successes and problems.
Partnering with the CEO to view the corporation very broadly presents tremendous opportunities for communication officers. This is really nothing new; however, there continues to be a significant gap between those who do this really well and those who accept a lesser role. It is tempting to say that the success of the CCO is almost wholly dependent on the CEO's view of communication. There is certainly truth to that. But it is also true that some CCOs do a much better job of creating and communicating a vision, providing the tools for improved execution, and creating a culture where success can flourish.
Perspectives: How do you (or the Page Society) view the role of the CCO when it comes to establishing and maintaining public trust for his or her company?
Nicholson: This really is the overriding job of the chief communication officer. Arthur Page (the legendary corporate public relations practitioner for whom the Page Society is named) once said, “All business in a democratic society begins with public permission and exists by public approval.” Maintaining public trust is a real challenge when you see surveys that rate businesses and CEOs near the bottom.
The media is full of stories focused on the negative aspects of business, the scandals, the pay inequity, the damage to the environment, greed, and on and on. When asked about business in general, the public view is not very positive. However, there is hope that when asked about “my employer,” the view is more positive. I think that's because people know more about their employer than they know about other businesses. Their experience is that their employer provides them with a good paycheck, solid benefits, useful goods and services, and the people they work with are generally upstanding, honest individuals. Meanwhile, the only thing most of us know about other companies is what we read in the media, and in that area, corporations as a whole have not done a very good job of communicating.
My personal view is that corporations have done more to eliminate poverty, build economies and create opportunity than any government or charity. After all, the best way to eliminate poverty is to build an economy, which companies help do. And because of controls, regulations and market pressures, corporations probably do a better job of being honest, ethical and transparent than a lot of other institutions in our society. Yet, the general public does not share this view of corporations.
Perspectives: It's interesting that you say companies haven't done a good job of communicating. Why is that? And how can they get better?
Nicholson: Companies often don't communicate well because there is a love-hate relationship with the media. And, while I think that has been improving in the last few years, it's still a very cautious atmosphere. There is a real belief that the media likes to build you up and then knock you down. The image of a corporation as a good citizen often is seen as too self-congratulatory, so corporations tend to err on the side of caution. They believe that by not engaging the media they will be able to fly under the radar screen and avoid negative scrutiny. But then they also miss the opportunity to be seen in a positive light. The key is to build enough trust initially so that the company has a bank account of trust to allow it to weather the storm when it comes. To do that, companies have to find a way to communicate their best stories, position themselves as part of the solution to major national and international concerns, and educate their employees and the general public on all of the benefits they provide to society.
Perspectives: How do you see the Page Principles fitting into the changing role of the CCO and how he or she does the job?
Nicholson: The first Page Principle is “Tell the Truth” followed by “Prove it with Action.” More than ever the proliferation of bloggers, the empowerment of stakeholder groups and the incredible speed of communication make it absolutely critical that companies adhere to high standards, become more transparent – though I recognize that doesn't mean sharing everything – and develop meaningful relationships with critics as well as customers, employees, suppliers and investors. Rather than being on the defensive, companies that are proactive and interactive perform much better. Actions truly do speak louder than words, so the role of the chief communication officer in influencing corporate policy, advocating on behalf of key constituencies, and anticipating how corporate decisions will affect the relationship with those constituencies has never been more important.
“Listen to the customer” is another Page Principle that is easy to say but difficult to do well. How, for example, should airlines respond to increased consumer dissatisfaction? There are tremendous profit pressures on the airlines at the same time there is growing frustration with the levels of service. It's easy to say “We listen to the customer,” but it's very difficult to turn that into meaningful and profitable change.
“Manage for tomorrow” and “Conduct public relations as if the whole company depends on it” are two principles that speak to the ability of the organization to see around corners, anticipate trends, recognize changing public opinion and to do something that will position the company for success.
The sixth Page Principle is “Realize that a company's true character is expressed by its people.” The Authentic Enterprise spoke to the need of chief communication officers to identify and activate values in the company. For instance, when you think about Johnson & Johnson, there is a feeling that the employees are committed to doing the right thing. Retailers and consumer product companies know that the image and reputation of their company is largely in the hands of the front-line employees who interact directly with customers every day. The challenge for the chief communication officer is to define and activate a set of core values that can be clear enough and specific enough to have meaning while at the same time broad enough to be adapted to every employee's job. And then, of course, how do you effectively communicate and reinforce that with a diverse and ever-changing workforce?
The last Page Principle is “Remain calm, patient and good humored.” No matter how stressed situations can become, it never helps to lose your cool. Like all of the Page Principles, this one is easy to say and not so easy to do consistently.
Perspectives: During a speech to the Page Society, Miles White, the chairman and chief executive officer of Abbott, wrote a response to The Authentic Enterprise. What other reaction has the Page Society received to the white paper?
Nicholson: The reaction has been very encouraging. We recently spent two days at an academic symposium at the Tuck School at Dartmouth taking a deeper look at the work, challenging the assumptions and conclusions, and discussing the implications of the paper. One of the questions that came up there was “Is The Authentic Enterprise simply the preacher preaching to the choir?” Corporate communicators already understand the challenges that we face. To make any substantive changes in how the rest of a corporation sees the communications role, communications needs to talk more to other functions, such as finance and human resources, to help them learn how we can contribute. Another question was “How can schools prepare communicators to be ready for the changes in communication?” To have an authentic enterprise, you have to have authentic people. That's a tough task for universities. It's hard to teach people to have the courage of their convictions and to stand by them.
While the discussion was very lively, at the end of the two days I think we all came away believing that this paper can be the basis for a very healthy and thoughtful global dialogue on the role of the chief communication officer. When that occurs, I suspect we will also generate additional work that may take a deeper look at each of the major trends and how we can help prepare our companies to thrive.
Miles White was very complimentary of the work, but he also challenged us to take a look at how we deal with hostile audiences whose purpose in life is to tear down the company and raise funds for their particular cause. That's one side of the relationship curve with satisfied customers, investors and partners at the other end of the curve. Managing across that diversity of audiences is enough to keep both CEOs and CCOs awake at night.
Perspectives: In hindsight, is there anything that you or the Page Society as a whole think could be added to the original white paper?
Nicholson: The Authentic Enterprise is the beginning of a global dialogue. It is provocative, thoughtful, and designed to provide the opportunity for each of us to step back from the frantic day-to-day doing of our jobs to think more broadly about how we can each contribute more to the success of the enterprise we represent. I hope there is much more to be added and much more to be said.
When CEOs talk, people listen. And nowadays, they're expected to say a lot more. Company leaders are expected to communicate not only about business operations and financial performance but also about issues ranging from employee matters to the environment. In this roundtable discussion, communication professionals who provide counsel to and/or draft communication for CEOs share insights on executive communication in today's environment.
Valerie Di Maria, Senior Vice President and Group Marketing Director, Willis Group Holdings Limited, New York
Robert Friedman, Director of Executive Communications, Eli Lilly and Co., Indianapolis
Jon Harmon, Vice President, Communication and Reputation, Navistar International Corp., Warrenville, Ill.
William Margaritis, Corporate Vice President, Worldwide Communications and Investor Relations, FedEx Corporation, Memphis, Tenn.
Valerie Di Maria: If you're lucky, you don't have to give too much counsel to your CEO and management team because they get that they always need to act in a trustworthy way. It is the action that is the most important thing. It isn't just about the language. If communications people are part of the management team and are there when decisions are being made, they should speak up when things are gearing off course. You should counsel on action and not just on how you're going to “portray” what you do. At Willis, we try to be very straight about what's happening. Even if it's not positive, we just address it head on.
One example of this occurred after we announced a major acquisition in May this year. Our CEO, Joe Plumeri, headed off to visit some of the office locations that would be added with the deal. His first stop was to visit the headquarters of the other company to say that he didn't know what would happen eventually but acknowledge that the merged company wouldn't need two headquarters in North America. He was very straightforward.
Robert Friedman: This is a particularly relevant question for Eli Lilly and Company. Over the past decade, there has been growing distrust of the pharmaceutical industry among the public, media and politicians. So Lilly early on developed a corporate brand to address people's concerns and set our aspirations for how we wanted to be perceived as a company. Among the four tenets of our brand is being “reliable and trustworthy.”
To live up to these characteristics requires actions more than words. So, we decided to become as transparent as possible about our business. For example, Lilly was the first company in our industry to publish online all of our clinical trial data; the first to publish our educational grants; and the first to back a new bill that would require pharmaceutical companies to disclose gifts and payments to physicians in the U.S.
Our recently retired CEO, Sidney Taurel – who remains as Lilly's chairman until the end of this year – also builds personal trust and credibility by linking his words to actions. When we lost our Prozac patent earlier than expected in 2001 – and with it 25 percent of our revenues – Sidney held a global town hall, linked by satellite to all 46,000 Lilly employees around the world, to explain belt-tightening measures – including loss of raises, bonuses and other actions. He explained that the higher one's rank in the organization, the greater the financial hit would be; and because he felt he should be affected most, he would work that year for $1. Despite the tough news conveyed, people left the meeting with renewed faith that Sidney would lead us through the crisis. They spoke about him “working for a dollar” for years after.
Our communications style and techniques support and model these actions. To me, credibility and trust derive from clarity and conciseness. We work hard to cut the corporate jargon and use straightforward language. We try to find the balance between the optimism necessary for a leader with the realism critical to motivating people. To extend our concept of transparency, we ensure Sidney and other executives take questions from audiences – and are candid in their responses (in fact, “active listening and responding” is another of our brand attributes). We invite the toughest questions people have. We've had annual reports titled “Answers” and “Straight Talk,” in which we've answered questions like “Are drug prices fair?” and “How will Lilly grow this year?”
Jon Harmon: Trust is a basis for engagement with all of our stakeholders – whether they're analysts, dealers, employees or investors. So it is always a factor for me in any communication. Navistar's CEO Dan Ustian has a style that lends itself to building trust. He doesn't brag, but he is clear about the positive changes that are taking place at Navistar. I think it's important to provide perspective in a way that is open and clear, so I advise executives below Dan to take this approach, too.
Dan already naturally has the right approach, but there still are some areas where we are being deliberate about building trust. For instance, one of our objectives is to get employees to ask tough questions during town hall meetings so that they can get a real-time response, which would be more relevant and meaningful than having questions submitted in advance of a meeting. But people are reluctant to ask the tough questions. We want them to know that they can ask and expect to get a straight answer. So at our last town hall meeting, we distributed three-by-five cards and required that people submit questions before taking a lunch break. Dan and other executives answered as many of the questions in person as time allowed. And for the questions that weren't answered in the meeting, we posted the questions and answers on our intranet. Within the course of a week, our executives addressed 150 questions online, in a straight and simple way. Employees responded very well to this.
William Margaritis: It goes without saying that in today's world, trust is really becoming a more important issue in how companies position themselves. At FedEx, it starts with having our founder and chairman, Fred Smith, really walk the talk. Not only does he inherently build trust through his own behavior, he also sends a semiannual publication to all employees' homes that uses public research and other third parties to validate and reinforce the importance of trust. He shares this with executives to make sure they understand just how important this issue is and how to ensure that their own behaviors must reflect integrity and trust if management is to be credible in the eyes of the workforce.
Trust is such an important issue because people are looking for more than a transaction. They're asking, “Who is this company and what do they stand for?”
For FedEx, trust is a huge part of the emotional appeal of the brand. FedEx has earned this with the reliability and peace of mind that we bring to people every day in delivering their precious possessions, but we also try to invoke trust in multiple facets. Much like our chairman, we earn trust from our customers and all of our stakeholders by walking the talk and keeping our word. It is an essential part of working for this company. In Communications, part of our job is to ingrain this idea within our entire workforce and continuously communicate it to new employees. This is a work that never stops. And the best way to do it is through authentic stories seen through our people. When an employee performs a trustworthy act, we celebrate that in video. So other employees who see the stories come to know that trust is a real and important issue for the company.
Di Maria: I used to work at GE, and when you did an all-employee e-mail, it went to people at NBC. So that shows that the line is totally gone. Of course, you emphasize certain things that are more relevant to each audience – employees, shareholders, clients – but it all factually has to be off of the same page. If you're talking to more than five people, you've got to figure that whatever you say is public. So that means you have to be transparent.
For instance, we recently laid out a very detailed strategy to investors and we put it on our Web site, so obviously every one of our competitors can see it. The fact is that even if we didn't put it on our Web site, competitors would find out. If you think you're going to do anything important and people aren't going to hear about it, you're naïve. The best thing you can do is tell your own story, straightforwardly and honestly, rather than having a cone of silence. Whether you're in a business-to-business or consumer environment, people need to feel that they trust you. Trust implies openness.
Friedman: Our internal and external messages sometimes overlap but are more often distinct, because we have distinct goals. Our external speeches are mostly policy–oriented – for example, persuading health care payers and decision makers in the U.S. and around the world about the importance of pharmaceutical innovation for patients and for their economies. Arguments might include that innovative medicines are critical to addressing the health needs of aging populations, or that governments should nurture the life sciences because they are fueling some of the most important industries of the 21st century. If our senior leaders are going to take the time and expense to speak in public, we want the speech to be persuasive and on a topic of industry, national or international importance.
Internally, we focus more on our few corporate priorities – including urging people to transform the way we do business to succeed in an increasingly challenging environment. We also talk about the importance of innovation to internal audiences, but our goals are different – more educational.
We use a wide array of vehicles to reach our Lilly colleagues. Our new CEO, John Lechleiter, has a blog, speaks at staff meetings and town halls, and uses occasional videos to answer important questions on people's minds (“Am I going to have a job?” was the most recent topic). Within two months of becoming CEO, John taught a half-day workshop to the top 1,000 Lilly leaders. During times of change, our philosophy is it's better to overcommunicate than under-communicate.
Harmon: I think the best communication can serve well in both internal and external situations. For instance, Navistar's “news media site” is used widely by employees, the media and others outside the company. We understand that employees are going to get a lot of their opinions shaped by local news media, so we make the same information that we share with the media available to employees. No passwords are needed to access information on the site.
But there are some instances when we use different approaches. Every quarter, our CEO and CFO hold an analyst call. We send e-mail to middle management and above to encourage them to listen in to hear the results of the business. We follow this with a leadership call. The messages are consistent, but we will go a little deeper among ourselves. It is important that employees really understand the business.
Margaritis: At FedEx, we take a very holistic approach between our workplace and marketplace communications. The Internet and all of the innovative communications channels it has created have blurred the lines of communications between “internal and external” audiences. This transparency has made us consider a number of different factors when we communicate to employees. First, you have to research the language that you use to see whether it resonates. Then, you have to find the right channels to communicate those messages. And perhaps more importantly, you have to identify a higher calling – the right inspirational platform that will invoke discretionary efforts among employees. For us, that's providing access. That means we try to deliver the message to employees that their jobs are about more than transportation. It's making people feel that they are playing a part in important moments in people's lives.
Finally, it's important that employees are hearing the same basic message across every channel. So we're trying to synchronize our messaging platform. We're not there yet, but we're getting there.
Di Maria: One, you obviously have to be sensitive to the different cultures and the different language. For instance, we have headquarters in New York and in London. We all speak English, but it is funny how one word here can mean something else there. Secondly, because of the Internet, whatever you say in one part of the world, you should assume will be heard throughout the rest of the world. So you don't want to overplay what is happening in one market at the risk of having a negative effect in another market. At the same time, you have to be transparent.
Friedman: About half of Lilly's business is generated outside the U.S., and we have an internationally diverse executive team. They make dozens of trips outside the U.S. each year – many for informal meetings but also for public speeches.
Sidney Taurel, who, again, just retired, has been our CEO for the past 10 years. In addition to English, he speaks French, Spanish and Portuguese fluently, as well as some Italian and a bit of German. This language facility has been instrumental in making him one of the most influential CEOs in our industry. He interacts with many European leaders and decision makers in their language. We translate speeches for those countries, which adds a week to our process.
Our incoming CEO, John Lechleiter, is an English speaker, but has kept up a global pace similar to Sidney's. When our leaders speak outside the U.S., we are sensitive both to cultural differences and to potential time differences required for translation. A 20-minute speech becomes 40 when translated sequentially, so we are always careful to determine the requirements ahead of time. In addition, we rely on local experts to alert us to any nuances in culture or style. We also provide country backgrounders for our speakers that include things like demographic and economic information to specifics about the health care systems and legislative efforts. Given that our executives tackle tough, sometimes controversial issues, we are deferential to the host countries so we don't come off as being arrogant.
Harmon: Navistar is growing pretty rapidly in Russia, India and China, and it puts different expectations to everything we are doing. We are considering how to build the Navistar corporate brand abroad. It would be arrogant to think that I know what our brand should represent in other markets. We need to be very understanding of the uniqueness of a country and of different values and ethics. At the same time, a high water mark in any country will raise up the other countries.
Expansion puts a great deal of stress on a CEO's schedule. He has to empower a team around him to be able to address concerns in different companies.
Margaritis: The CEO has to be a champion of people, culture and social responsibility, globally. In our case, because of our exposure to carbon footprint, our chairman has taken a very active leadership role in trying to ensure our nation's energy policy and independence. When people see that, they say here's a company that's doing the right thing. We are also very strong advocates of free trade and very much view our role in the world as enabling trade for all nations, businesses and individuals. We often talk about this in terms of access, and we fervently believe that trade makes great things possible for everyone.
Di Maria: In general, the good CEOs are aware of the importance of communication and are communicating much, much more. I once interviewed at a company where I asked the CEO about communication, and he said that it wasn't his job! Needless to say, he is no longer CEO! Well, I believe that communication should be the job of everyone in senior management. Lately, more CEOs are seeing communication as a core competency, and the whole C-suite understands the importance of communication.
While CEOs might not be eager to talk to the media more, there has been a huge increase in CEOs seeing the importance of talking to their own employees. As part of that, I think we're seeing a backlash against electronic communication. Face-to-face interaction is becoming more important. When you're trying to establish and maintain trust, you have to look people in the eye; you can't hide behind a computer screen.
Another change is the importance of two-way communication – it's no longer just “us” talking to employees. For instance, our internal Web site, which we call “Good Morning, Willis,” delivers relevant news about the company every work day. One feature is a “Talk with Joe” button, where people can e-mail our CEO about anything and receive a response typically within 24 hours. Joe literally wants to see every question and he is engaged in the Q and A every day.
Friedman: Over some 20 years of listening to and reading speeches, I've seen the time CEOs devote to public speeches ebb and flow. I can remember times when it was common for corporate leaders to take on great public issues – education, health care, the environment and so forth. For the past two years and longer, I've been dismayed by an erosion of public persuasion on the part of corporate leaders. Many are selling their wares or participating on panels. The director of one noted national venue told me she's booking corporate executives less and less because too often they provide audiences with nothing more than a commercial. Other executives have turned inward, focusing on running their businesses.
Given a turbulent business environment, this is understandable. Still, since many of our opponents have megaphones, I think it's the responsibility of CEOs of major organizations to state their case forcefully, concisely and eloquently in public. I'd like to see more of them taking on big issues – something I'm proud to think Lilly does.
Harmon: The most obvious changes revolve around electronic communication. There is a great reliance on e-mails, BlackBerry and other quick communication devices. There is a lot of great stuff about that, but there also is a danger that the CEO doesn't have face-to-face interaction with employees, in particular. Face-to-face is important because it provides a better opportunity for the executive to listen. So in addition to mass messages through e-mail or voicemail, our CEO hosts town-hall-style discussions and regularly visits plants so that he can have more personal interaction with employees.
We're also starting to use electronic communication to facilitate discussions. Some of Navistar's executives just below the CEO level have started a blog. Right now it is primarily an electronic column because there isn't much discussion yet. But there is more to come. In the communication department, we also have been advising executives on ways to make better use of electronic communication. For instance, the company has an annual CSR report that outlines its commitments. The vision is to make this more interactive and turn it into a dialogue.
We also advise executives that when communicating in e-mail, it is important to tell a story rather than doing just a data dump. People aren't going to remember a lot of numbers but they do remember stories. And that's important even when you're reporting financial results. People understand the numbers better when they know the story behind them.
Margaritis: It has to be authenticity – authentic storytelling with emphasis on video and on communicating through new and highly interactive channels. You have to deliver the right message to the right people through the right channel at the time that they want it. So it's also about personalization. It has to be told in a story form – not just a 15-second spot. That's a new paradigm.
Global surveys typically reveal differences in views among regions, and Expectations & Frustrations was no different. However, while Influentials' expectations of corporations varied on
some topics, the final statistics still support some overarching themes. Here are a few of those themes and the survey numbers behind them.
Ketchum, through its Global Research Network, conducted a survey last summer to assess how the public views corporations and the executives who lead them.
The survey collected data from 2,773 Influentials in 11 countries in the Americas, Europe and Asia. The respondents were all Influentials, the 10-15 percent of the population who exercise influence over change in society. The definition of Influentials varies by country but generally includes individuals who take an active role in society through activities such as attending public meetings, serving in nonprofit and other organizations or writing letters to the media or politicians. In India, Influentials also have completed at least two years of university. In China, they have completed technical/vocational training, university/polytechnic, postgraduate education or above and have household income of at least 60,000 yuan. In Argentina and Brazil, Influentials might also have completed two years of university work, have additional income outside of their home or own property that produces at least $500 a month, or have household income of at least $6,000.
The countries surveyed were Argentina, Brazil, Canada, China, France, Germany, India, Italy, Spain, the U.K. and the U.S. In each country, at least 250 respondents completed the survey. The margin of error is +/-6 percent in each country and +/-3 percent in the aggregate data.
The survey was conducted through online distribution from Aug. 1 through Aug. 30, 2007.
Valerie leads worldwide marketing, executive communications, media relations, employee communications, government affairs, community relations, corporate philanthropy, events, and brand and reputation management for Willis Group, a leading global insurance broker.
Prior to her role at Willis, she held leading communication positions at Motorola and GE Capital and previously headed the New York headquarters of Grey Advertising's international public relations agency, GCI. She has significant experience in corporate, consumer and business-to-business public relations and marketing.
Valerie is a leader in the public relations field and currently sits on the Client Advisory Board of the Council of PR Firms and is a board member of the Arthur W. Page Society, among other affiliations.
Senior Partner and President
As president of Ketchum, Rob's role is to help set strategy for the agency and to develop business worldwide. He also oversees the agency's Global Corporate Practice and Global Research Network, and serves on the agency's 10-member Executive Committee.
During his 19-year career at Ketchum, Rob has specialized in corporate positioning and issues management. He has helped companies prepare for and respond to challenging situations ranging from data security and airline accidents to product liability and antitrust litigation.
He was previously responsible for all of the agency's global practices, including Brand Marketing, Corporate, Food & Nutrition, Healthcare, and Technology, and he was managing director of the firm's New York office.
As director of executive communications, Rob supervises a team of speechwriters and writes speeches for Eli Lilly's CEO and other senior executives. With 20 years of speechwriting experience, he also teaches communication workshops around the U.S. and is a former editor of Speechwriter's Newsletter.
Vice President, Communication and Reputation
Navistar International Corp.
Jon Harmon is vice president of communication and reputation at Navistar, the parent company of International Truck and Engine Corporation and producer of commercial trucks, mid-range diesel engines and school buses, and designer and manufacturer of diesel engines for pickup trucks, vans and SUVs.
Jon joined Navistar from Force for Good Communications, a public relations consultancy he founded in 2007. Previously, Harmon had worked for 23 years at Ford Motor Company in public relations, including senior roles in product communications, corporate reputation management and strategic communications.
Bill Margaritis oversees all reputation management, investor relations, public relations, employee communications and community relations activities for FedEx Corp. and its subsidiaries. He has led communications for various crises, acquisitions, rebranding initiatives, employee change-management programs and new go-to-market strategies.
Prior to joining FedEx, he was vice president of Bechtel International, based in London, and was responsible for managing public relations and marketing communications for Europe, the Middle East, Africa and Southwest Asia. He also worked in Washington, D.C., and Athens, Greece, for separate divisions of the company. In addition to his extensive background in international communications, he also has broad experience in government affairs.
Tom Nicholson joined the Arthur W. Page Society as executive director in April 2007. He previously served in both business management and communications leadership positions, including as vice president and general manager for Avery Weigh-Tronix, LLC, one of the largest international manufacturers and sellers of industrial and retail weighing systems. Nicholson's communications and public relations experience includes senior management positions at HSBC North America, Sears and several public relations agencies.
Tom also was the founder of an Inc. 500 Fastest Growing public relations consultancy and served as a vice president at Edelman Worldwide. He began his career as a journalist, working in newspapers, radio and television.
John has more than 25 years of experience in all facets of integrated marketing and corporate public relations. He has wide-ranging experience in corporate reputation management and international public relations, and has worked extensively in the telecommunications field.