WAITE-O-GRAM (RELEASE 237.0)

SPOTLIGHT ON OR OFF?

One of my clients, Jay Rosenzweig, the founder and head of a very successful international executive recruiting firm, recently undertook two activities that perfectly illustrate differing approaches to the CEO position. In the first instance, Jay appeared on a syndicated radio/streaming video show out of LA called "Business RockStars". Jay, who is a very successful entrepreneur in his own right, received great profile from doing the program. Not long afterwards, in Toronto, Jay participated in a live stage event, interviewing William N. Thorndike, the author of "The Outsiders". Thorndike is founder and managing director of Housatonic Partners, an investment firm. In the book, which was extensively researched (and inspired by a conversation with Warren Buffett), Thorndike postulates (with eight examples) that it is more often the "quiet ones", rather than the Jack Welch's of the world, that achieve long-term, sustainable shareholder success as CEOs.

A COMMUNICATORS' DILEMMA

So what is the right model? Communications professionals, perhaps understandably given their background and inclination, often lean in the direction of the spotlight for their CEO. And CEOs often want to avoid the spotlight - for many, gaining public profile, especially media profile, is about as welcome as a visit to the dentist. In truth, there is no one model. Much depends on stakeholder expectations and the way you wish to present yourself to the marketplace. In Jay's case, he is the face of the company, a company that by its very nature benefits from positive CEO exposure. Literally what you see is what you get. And certainly a company like Apple, in the person of Steve Jobs, benefited immensely from his charismatic media events. 

ON THE OTHER HAND...

But in Thorndike's book, he puts forward compelling cases where ignoring various stakeholders - most particularly the media and the analyst community - seemed to have no negative effect and arguably left additional time for more important things, like sorting out capital allocation and executing acquisitions and divestitures. (Interestingly, almost all of them eschewed paying dividends, which undoubtedly drew only a certain kind of investor.) The individuals cited in the book thus include people you likely have never heard of - Bill Anders of General Dynamics; Henry Singleton at Teledyne; John Malone at TCI. Collectively, these CEOs outperformed the S &P average by 20 times and their sector by a factor of seven.

CHOOSING THE RIGHT PATH

So what to do? There is no one right approach. Every company - and every CEO - has different needs and strengths. Those need to be assessed with a clear eye. And it is important, as my good friend David Moorcroft, former head of RBC communications used to say, to remind executives that they are passing stewards... and that the brand lives on long after they are gone. My own philosophy is that good corporate communications should begin from the inside and work out - communicate frequently and effectively with employees and suppliers and then work your way out to customers, investors and the public as is needed to advance your strategic agenda. Starting CEO life with an interview in the Wall Street Journal or ROB is probably good for the ego... but probably not wise. Always secure your base first.  

SPEAKING OF EGO...

One does not know where to begin with the rolling reputational car wreck that is VW. The question I get from people responsible for reputation management is, "What were they thinking?" I actually think the question can be answered in fairly straight-forward manner: The then-CEO, Martin Winterkorn, suffered from hubris-extremis. When he took over in 2007 - essentially by staging a coup at the board level - the first thing he did was cancel a contract his predecessor had signed with Mercedes to provide VW with clean diesel engines. Having been in charge of VW's research and development (a position he maintained as CEO), he found the outsourcing to a rival to be abhorrent. So he told his staff to get on it - and produce a substitute powertrain in time to meet the product launch date. 

A FEW BILLIONS LATER...

We can all guess what happened next. Faced with an intractable deadline -- and an intractable CEO, whom they feared would fire them -- engineers executed what is euphemistically referred to as a "work-around". And that's what they literally came up with - a software patch that went around normal emissions testing. Full disclosure - I own a 2007 Mercedes BlueTEC. It has 322,000 kilometers on it (or 200,000 miles for the metrically challenged). It has worked like a charm - and I am sure it would have worked like a charm for Herr Winterkorn. Instead, he is gone, leaving his company in a deep hole and his shareholders out billions of Euros. Some say he can take solace in the fact that he exits with  a severance and pension package worth over $80 million US - but, seriously, can any amount of money pay for a sullied reputation? It does not take a genius to figure out what the first line of his obit will be...

ANOTHER SUCCESSFUL LAUNCH

I recently completed a three-year succession exercise with a prominent Boston-area bank. Working with the Board Chair and the CEO-to-be was a real pleasure, not only because they were good folks, but because they took succession seriously and executed each step flawlessly. And  smooth successions matter, especially (as in this particular case) the retiring CEO is an iconic figure strongly identified with the institution. And failure to get it right can be hugely costly. In a recent issue of Strategy + Business Magazine, authors Ken Favro, Per-Ola Karlsson and Gary L. Neilson estimate that muffed successions cost companies in aggregate of $112 billion and that "even at the best-functioning companies, they can wreak a harsh toll on revenues, earnings and stock price.  Their solution? "The board should make succession planning a routine, recurring and candid topic of discussion." To that I would add that a two-year runway of coordinated planning and activity around the successor...followed by at least six months of "launch" activity...can make things go more smoothly. Certainly better than a hastily planned board coup.

SPEAKING OF SPOTLIGHTS

For anyone interested in the media and investigative journalism, I would highly recommend the film "Spotlight", which dramatizes the Boston Globe's special investigative team's probe into the dark underbelly of juvenile sexual abuse by priests (and subsequent cover-up by  Boston Archbishop Bernard Law). It is a riveting work of cinema, extremely well acted and meticulous in portraying the sheer drudgery of chasing down leads and checking facts. It is perhaps ironic that I am praising a film about the Globe "Spotlight" team - one of the first calls I received when I became Senator Ed Brooke's press secretary was from "Spotlight". I was ill-prepared, truth be told, and could have done a better job of preparing the Senator. Interestingly, it was Walter "Robby" Robinson, the Michael Keaton character in the movie, who helped steady me. Robinson was not on the Spotlight team at the time and was essentially the "good cop" you could go to on the staff. At any rate, the movie is terrific. 

NOT THAT YOU ASKED

Still on the subject of film, I would also recommend "Trumbo" with Brian Cranston (which speaks to the Hollywood blacklist era and perhaps has relevance in these days of great fear and scapegoating) and "Room", which is a fictionalized (and Americanized) version of a monstrous Austrian small-space confinement of a young woman by a warped man. I know - neither sounds very holiday-like. But they're really worth seeing.

WHERE DID WE GO WRONG?

I mentioned that one of Waite + Co.'s clients recently appeared on "Business RockStars" in Santa Monica, California. What I didn't mention is that daughter Emily, finishing up her joint masters communications program at the Annenberg School at USC, handled all of the prep, acted as liaison with the shows producers, and went along to the broadcast. Both she and her brother have fallen into public relations, driving their Engineer/MBA mother nuts... and mystifying me. Joseph is in his second year at Exponent PR (which recently was named "Boutique Agency of the Year" by the Holmes Report) in Minneapolis and Emily will presumably be gainfully employed at graduation in May. I guess it could have been worse - they could have gone into politics (or investment banking).

AND FINALLY...

We recently returned from three weeks in Turkey. It was fascinating from many perspectives, including being there at the time of the Turkish election (and the Paris bombing). I carried away a lot of memories and impressions. One that I must say still sits uncomfortably in my mind came from visiting the Pavilion of the Holy Mantle and Holy Relics in Topkapi Palace in Istanbul. This lavish former domain of the Ottoman Sultans contains several rooms displaying items moved from Medina and elsewhere to what is now Turkey. (And they make it pretty clear they are not going back any time soon - echoes of the Elgin Marbles and the British Museum.)  At any rate, what set me back in my sneakers as I walked through was a display of "The Prophet's Sword" and "The Prophet's Bow", both purportedly used in battle. It seemed a marked contrast to the rather passive countenance of the Buddha, not to mention Jesus of Nazareth. Looked like a PR problem to me.

(This message represents the views of the author, who is solely responsible for any errors, omissions or sacrileges. The term "Weekly" is a relative one, meaning that it is issued more than once a year, but less than daily. Any complaints should be directed to Waite + Co.'s President, Karen Shigeishi-Waite, who, while deeply engaged in succession planning, is always ready to field complaints about her employees.)