CEO reputation: Enormous opportunity and many challenges

September 5, 2022

How to achieve successful CEO positioning

Numerous DAX leaders with previously excellent CEO reputations have lost their posts in recent weeks. Herbert Diess at VW, Stephan Sturm at Fresenius, Stephan Schäfer at RTL and Kasper Rorsted at Adidas.
Other CEOs, such as those of Henkel and SAP, are no longer sitting quite so securely in the saddle due to performance problems.

How does the media write about the failure to meet the challenges?
You have not delivered! So they had to go.

Ahead of the difficult winter of 2022 with multiple crises – war, inflation, skyrocketing energy prices and pandemic – supervisory boards and capital markets do not want to wait any longer.

Is this the “Dax Dawn”? That is what many are now wondering.

Even if a “Dax twilight” seems unlikely on a broad front: The challenges to a resilient CEO reputation are enormous. As never before, CEOs and companies are under constant observation by their stakeholders: Investors, customers, employees, multipliers. Social media creates ultimate transparency. Everything is echoed there, goes viral within minutes and directly influences the reputation.

Therefore, the question is not if, but when, where and how quickly situations arise that can cause lasting damage to the reputation of the CEO or company.

Warren Buffet rightly warned “ It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. .”

It is important to continuously work on all reputation drivers for this intangible asset . CEOs and companies alike cannot avoid systematic early detection. It pays to have proven experts on your side. After all, strategic CEO reputation management is the supreme discipline of corporate communications.

More than two decades of experience with CEO reputation and successful CEO positioning

Already in the dot.com years I accompanied – at that time on the PR agency side – exciting IPOs. A convincing CEO reputation has always been a key lever for success. For example, I positioned the founder and CEO of one of the world’s largest art platforms in parallel with the IPO. In other projects, I was responsible for the positioning of the CEO of a leading global automotive supplier, one of the world’s largest watch manufacturers or one of the top 3 credit card companies, among others.

My Learning then:
Only with a holistic strategy and razor-sharp messages does a CEO positioning with added value emerge.

In my twelve years as EMEA marketing manager of an international strategy consultancy, I experienced on a daily basis: In the end, CEOs and top managers all want the same thing – more visibility and a crisis-proof reputation. Your goal? Embody corporate success as brand ambassadors . This is less a matter of vanity than the fact: people can generate great emotions and strong brand loyalty. This is another reason why CEOs literally put themselves “on display” for their companies.

In the long term, only those who deliver hard figures and news are – and remain – stock market and media darlings. News that is consistent with the corporate and personal brand.
This was also evident at the World Economic Forum (WEF) in Davos. As PR officer here, I positioned CEOs and EMEA heads with the world press for over a decade.

Since February 2019, I have been responsible as the founder of Mathony Brand Strategists I am responsible for reputation building for CEOs, CXOs and top managers in addition to communication and brand strategy projects.
Together, we take the path to a successful personal brand from message building and media training to strategic PR and positioning as a social CEO on LinkedIn.

Please also read my article “ The successful social CEO: strong arguments for digital visibility “.

What is meant by CEO reputation?

CEO reputation, also known as leadership reputation, refers to the reputation of a CEO. Once this reputation is ruined, it is not easy to live. On the contrary. Every past and future word is weighed in the balance. Every action or non-action is illuminated by the stakeholders.

The goal is to have interpretive sovereignty to the greatest possible extent at all times. That’s why it’s so important to take the reins early on – ideally before taking office and especially intensively in the famous first hundred days. This is done through strategic CEO reputation management.

What exactly is strategic CEO reputation management?

A CEO reputation is omnidirectional. It arises from a wide variety of impressions, experiences and actions, but also from omissions.

In some companies, the belief still prevails: CEO reputation takes care of itself – quasi qua office. But that is dangerous. After all, no one knows in which direction a CEO’s reputation and image can swing. In the worst case, this turns out negatively without proactive control.

A CEO’s reputation is created regardless of whether he actively builds and enhances his reputation – or not. The greater the proportion of strategic steering, the better it is for reputation. Provided the CEO gets it right as the face and voice of his company. This governs smart CEO reputation management.

What is the corporate value of CEO reputation?

63% of market value now comes from a company’s overall reputation. According to “The State of Corporate Reputation in 2020: Everything Matters Now,” the CEO’s reputation accounts for 58% of total corporate reputation.

The movements in the stock price when changes are announced at CEO level are impressive proof of this.

How CEOs can read the value of their reputation from the share price development!

An example? On the day Henkel communicated the departure of then CEO Kasper Rorsted in January 2016, Henkel shares lost €2.2 billion. The Adidas share, on the other hand, soared by more than ten percent in one fell swoop. By January 2019, the Adidas share price had doubled. Rorsted received the title “Manager of the Year” several times. When his departure was announced on August 22, 2022, the stock market reacted with a sharp eight percent drop in the share price.

This example – and there are dozens more – shows how intertwined companies and their CEOs are. This makes leadership reputation one of the most important and competitively relevant assets of a company. This is why we also speak of CEO capital.

How does the media philosopher Norbert Bolz put it? “ Anyone who wants to make a profit in the 21st century must pass through the eye of the needle of good profile “. This applies to every company: Not only for Dax corporations, but also for professional services players, medium-sized companies or start-ups.

A strong CEO reputation has a positive influence on:

• Attractiveness for investors
• Attractiveness as an employer – keyword “employer branding
• Resilience in crises
• Reporting.

The excellent reputation of the CEO is therefore not a simple “nice to have”. Why is that? One of the reasons for this is that, as with an iceberg, people often only perceive the people at the top of a company. Through this halo effect, the reputation of CEO and top executives radiates to corporate reputation.

Even otherwise rather dry business media are embracing this effect. That’s why they tell person-focused stories with the CEO as the protagonist. In doing so, they follow the storytelling including the hero’s journey á la Hollywood . Tesla equals Elon Musk; VW equals Herbert Diess until the end of July 2022. These narrative patterns reduce complexity and provide orientation for readers.

How do you build a CEO reputation?

“ You can not not communicate “. This dictum by philosopher and psychoanalyst Paul Watzlawick also applies to the positioning of a CEO. Because every CEO has his own reputation – whether he likes it or not. It is never a matter of charisma alone or even chance.

It is important to consider the sensitive as ggfls. stock market-relevant reputation into their own hands. In doing so, CEOs do not act alone, but together with professional communications and PR consultants . These should have profound, long-standing experience with the positioning of top managers at C-level.

Here are three key actions that should be intertwined when building an outstanding leadership reputation.

1. public relations for CEOs: PR is better advertising

At least since the twenties, companies have known about the value of targeted press and public relations work. No wonder. PR provides targeted visibility and a positive image. Something that is also important for reputation building. But PR is not advertising. On the contrary. Because advertising is partially loud and striking. Therefore, it does not work as a credible booster for personal brands in business.

Good public relations, on the other hand, is strategic, content-driven as well as sustainably effective . Interviews and background discussions in leading media such as Handelsblatt, FAZ or WirtschaftsWoche are an integral part of any professional CEO communication.

The goal is never to pat yourself on the back. That should be done by others. This creates real credibility that effectively supports CEO reputation. Successful PR is never a sprint, but always a marathon. CEOs, like their communications teams, need to stay on top of things and have a regular presence in the relevant media.

Holistically conceived, the communication discipline PR unfolds its full potential. It makes the CEO the identification figure and north star of his company.

Please also read my article: “ The seven sins of PR – and how to avoid them, guaranteed. “.

2. CEO Activism: Showing and Maintaining Posture

Companies are not NGOs. They primarily pursue economic goals and need to make profits. There is nothing wrong with that. Nevertheless, CEOs can and should take a clear stance and position themselves on social issues. The mantra of Milton Friedman “ The business of business is business ” has long since become obsolete. Instead, CEO activism is becoming increasingly important.

Worth reading in this regard is the Study “ The political CEO: Rationales behind CEO sociopolitical activism. “. In it, 88% of the Germans surveyed demanded: Corporate leaders should take a political stance.

A modern corporate culture focuses not only on shareholders, but on all stakeholders . From this derives the need for sustainable action.

Young generations in particular look very closely. Whether talented young people apply to companies depends, among other things, on the credible attitude of the CEO. According to “ Connected Leadership 2021 “For 80% of employees, the CEO’s reputation is the deciding factor for retention – in other words, the question of “leave or stay?

In short, entrepreneurial success is always linked to responsibility – for employees, customers and society.

However, some CEOs make the mistake of taking a position on every current trend. Unfortunately, this does not seem very confident, but rather arbitrary. Especially in the social networks, this is quickly exposed as gimmickry.

Smart CEOs do not make this mistake. This is because they look for a socially relevant topic that suits them and their company.

This can be the fight against discrimination or for climate protection. Perhaps the aim is to promote the integration of migrants into the labor market or to support children from socially disadvantaged families.

Whatever it is, CEOs need to identify with it, internalize it and make it an integral part of their personal narrative.

Like a kind of background noise, it should be recognizable behind every action and every statement. Only then can CEOs take the leap of faith that they and their company can make the world a little bit better. In this way, CEOs possess a genuine unique selling proposition that clearly differentiates them from other CEOs.

Read also my article: “Showing Attitude – Is CEO Activism Now the Order of the Day?“

3. authenticity – please with measure and center

Anyone Googling the word authenticity will get more than nine million hits in September 2022. It is a hype topic – also in the context of CEO reputation. If you want to professionalize your appearance and your impact as a board member, you can’t avoid defining yourself with a sense of proportion.

The starting position is not trivial. As the highest-ranking executive in a company, CEOs bear enormous responsibility: they drive corporate growth and profits, secure investments, liaise with the board, customers and influencers, develop strategies, influence the corporate culture and motivate employees.

As the face and voice of the company, CEOs should decide from zero hour how to present themselves to all relevant stakeholders. Those who are most effective as well as successful are those who are fully engaged in their role. A communication style that allows the CEO to remain “himself” helps. This is the only way to build personal and transparent relationships with people. Only an authentic broadcaster creates credibility and trust.

Successful CEOs always stand up for something – their company’s values, a higher purpose or a personal vision that drives them. They remain true to these goals, values and visions. Even when circumstances put obstacles in their way. CEOs who subordinate themselves to a higher goal are perceived as particularly authentic and credible. At the same time, they escape the cliché of ambitious managers who are only interested in their own financial success.

Or as Virgin founder Richard Branson put it: “ Take the competition seriously but not yourself. “

Read also my article: “ Authenticity and storytelling: a bigger balancing act than many think “.

What are the most common mistakes in building CEO reputation? How can these be avoided?

What did Benjamin Franklin warn? “Glass, china, and reputation are easily cracked, and never well blended.” This aptly describes the risks of building and maintaining an effective CEO reputation. Social media in particular has made the CEO’s reputation more fragile than ever. Every mistake spreads in no time via Twitter or LinkedIn.

Leaked information such as the party video of Finnish Prime Minister Sanna Marin in the summer of 2022 shows:
The supposedly private is public. Protected spaces exist neither for politicians nor for top decision-makers in business.

Here are three key mistakes.

1. the lack of differentiation of the CEO – “same same” instead of different

Services, like products, often suffer from a lack of differentiation. They are becoming more and more similar and so interchangeable. CEOs also risk interchangeability without a positioning strategy from Day 1. Without crystal-clear messages, they remain pale – faceless – for media and investors alike. Aspects such as personality, credibility and transparency are crucial. They bring that certain difference for sustainable success.

2. short-term strategies, instead of long-term CEO reputation building

A CEO reputation is never built overnight. Flash in the pan – i.e., short-term positioning campaigns and ad hoc social media or PR stunts – unfortunately don’t work.
As charming as the sentence “In today’s newspaper will tomorrow already the fish are wrapped“It does not apply to the reputation of a business leader. Instead, a leadership reputation always requires a long-term, holistic strategy.

3. trendy instead of sustainable CEO positioning

A CEO positioning is never trendy per se, but must be sustainable and have an impact. As described by the example of Kasper Rorsted and his stock price relevance: Reputation is a key success factor, both strategically and economically.
The personal brand – also called personality brand – of an executive board member must therefore be carefully planned and managed. The first step is to analyze the CEO’s personality and the company’s goals, mission, vision and values. The communication strategy is based on this analysis. This is never trendy either, but strategy-driven through and through.

Eight steps to a strong CEO reputation

Now you have a deeper understanding of the value of a great CEO reputation and want to move into implementation? After more than two decades in strategic CEO positioning and communications, and building the crisis-resistant reputations of CEOs in a wide variety of industries, I am convinced:

A personal consultation there is no substitute for it. The following eight steps will provide you with an initial guideline that you and your team can use for successful CEO reputation management.

1. strategy-driven analysis

Get the famous view outside the box. Have your leadership reputation assessed by independent third parties. What’s the saying? “ Identify the gap and close the gap! “This strategy-driven analysis forms the basis for the targeted development of your CEO reputation.

2. differentiating positioning

Define topics that fit your business and its most pressing challenges. The more you identify with them, the better. Don’t chase short-term trends. Choose a positioning that you stand by even when there is resistance.

3. tailor-made narratives

Employ social resonance fields as well as their dynamics through tailored narratives. This is how you increase the connectivity of your communication. The more clearly you position yourself in the crucial debates of your time, the more resilient your CEO reputation will be.

4. business storytelling

Work with your team of experts to create a leadership story that radiates positively to your organization. Your business storytelling should be authentic, socially relevant and, above all, interesting. Stories without suspense don’t work.

5. classic communication channels

Select the appropriate, traditional communication channels through which to reach your diverse stakeholders. Show your presence regularly – because: “ Content is king and consistency is queen! “

6. digital scaling through social media

Strong personal branding in social media is now an integral part of any communication strategy. Digital scaling ensures a broadly effective CEO reputation. Address your target groups – from employees to multipliers in politics, business and society to investors – through this modern stakeholder management.

Check out our #MBS guide: “ 66 tips on personal branding on LinkedIn “.

7. consistent visibility

Don’t rest on once achieved visibility. Continually work onyour CEO reputation. Consistently increase your media presence and become the opinion leader in your industry. Since visibility is always important internally as well, you are the number one contact person for your employees who clearly leads the company to success.

As well as last but not least:

8. teamwork also with external experts

The strongest is strongest alone? Here Nietzsche was wrong. Rely on teamwork, use the competencies of your top management, and trust external experts at eye level.

These eight steps are just the beginning.

Stay on the ball! Don’t lose sight of your CEO reputation as an overriding goal even when others seem more important in times of crisis. Remember: building a great CEO reputation doesn’t happen overnight. It is a strategy-driven process with sustainable results.

CEO reputation: A real success factor!

A company is like a sports team. As CEO, you are manager, coach and best-known player all at the same time. Building a brilliant CEO reputation that sets you apart from the competition is correspondingly important.

With this post, I’ve shown you how to position yourself for differentiation, and what mistakes you’re better off avoiding in CEO reputation management. Of course, no text in the world can replace a personal consultation. As an expert in strategic positioning, I will be happy to assist you with more than two decades of CEO consulting experience, including PR and social media expertise. The same goes for my senior partner colleagues at Mathony Brand Strategists.

We would be happy to accompany you in successfully building your unique CEO reputation!

Strategic. Targeted. Effective.