Mentoring and board engagement – top weaknesses of CEOs

Directors of North American companies were asked by Stanford University to identify the top weaknesses of CEOs.  The two weaknesses that tied for top place were mentoring skills and board engagement. Some of those surveyed were CEOs themselves so there’s an element of self-criticism here. The primary concern that this raises is the ability or willingness of CEOs to nurture the talent that will follow them.

Thankfully for CEOs, these “non-financial” areas are not given huge weighting in the boardroom. They’re identified as being a minus for many CEOs – but not a big minus. Talent development and succession planning got only a 5% weighting and employee satisfaction chalked up a measly 2.5% weighting.

CEOs were rated high in decision making and low in people management. As for “listening” and “conflict management” – they barely registered a blip among the directors surveyed.  The same can be said for areas like customer service and innovation.  What counted above all else were the financial performance metrics with non-financial qualities hardly valued.

Professor David Larcker at Stanford warns companies that this could store up problems in the future:

Amid growing calls for integrating reporting and corporate social responsibility, companies are still behind the times when it comes to developing reliable and valid measures of nonfinancial performance metrics

To get full details of the report – click HERE

Unilever CEO Paul Polman on the way forward to eradicate global poverty

Governments need to create conditions in which businesses can flourish if poverty is to be rolled back – Paul Polman, CEO of Unilever wrote this week in an article you can read HERE.  We are fast approaching the 2015 deadline previously set by the United Nations to meet tough Millennium Development Goals. These included big social targets on hunger, water, health and education. Assuming that we’ll arrive in 2015 and find that there’s still a way to go, Polman advocates some new approaches – particularly around the role of the private sector.

So the new agenda must place a strong incentive on governments to create the right conditions for business to flourish. It must engage the private sector not just in setting but in delivering the agenda. Increased pressure on public sector finances makes it unwise to rely too much on overseas development assistance funding to tackle all the issues that matter within the time available.

He also calls for good governance and properly functioning institutions:

Ultimately, it is well-governed and accountable institutions which ensure peace and security, enforce the rule of law, deliver effective public administration and tax collection, guard against corruption and provide transparent markets. Without these, governments cannot serve their citizens, business will not have the confidence to invest, and conflict-affected and fragile states will have no chance of escaping the poverty trap.

Polman calls for a new global partnership for development that as 2015 sails past will succeed where other approaches singularly have not.

Only 57% of C-suite executives think their company is customer-centric

New research from the Economist Intelligence Unit has found that only 57% of C-suite execs think their company is customer-centric and an even lower 52% believe their organisation has a clear understanding of its customers’ tastes and needs.  The EIU took the views of 389 respondents globally for its latest report on the role of the Chief Marketing Officer (CMO). You can download the full report HERE.

A mere 19% of respondents believed that the company CMO played a leading role in connecting customer facing functions and worse still, only 18% looked at CMOs as the voice of the customer. More thought that the head of sales (31%) fulfilled that role while admitting that the CMO really ought to be performing that function – but clearly isn’t.

Other findings make interesting reading:

  • 21% said their ability to track customer engagement across different marketing channels is “lagging”
  • A quarter believed the CCO (Chief Customer Officer) should be the voice of the customer
  • Only 61% thought the CMO role was strategic

 

 

Why corporates and CEOs need to do empathy

An increasing number of CEOs – particularly in new media – are becoming aware of the need to bring empathy and emotional intelligence into their business.  In an article for the Huffington Post, consultant Rose Schreiber explains why “empathy as a social currency” is gaining ground in the business world.  We live in different times and consumers expect companies to evidence values and understand their concerns – so CEOs need to engage in a much more sophisticated and nuanced level of communication with external stakeholders.  And frankly, they also need to show they mean it.

As Schreiber explains:

Empathy is essential to providing better customer experiences. If you understand your customers, you’ll be well equipped to give them exactly what they need.

Four steps to achieving empathy are outlined as follows:

1. Make an active decision that you want to see something from another point of view. For most part, we are blind to another’s point of view (usually as a result of our own opinions and a need to be right) and this is 80% of the work in reaching greater empathy.

2. Become conscious of the filter you’re listening through. Most of our biases are completely unconscious and when we listen to others, we don’t realise that we’re listening with judgment.

3. Go deeper than the issue to find the underlying emotion. Most of us get stuck at the issues and never really try to understand why a person is feeling a certain way.

4. Connect with the underlying emotion and acknowledge it. When we understand underlying human emotions, it’s easier to find connection. In the root of the word empathy “em” means “in,” “path” means “suffering” – empathy is simply feeling the suffering of someone else.

The principle extends to employees as well as consumers. If they feel valued and understood, not only will they stick around longer but they’ll show a greater willingness to contribute across the organisation and not just in their current silo.

In all of this, the CEO plays a key role not, as Schreiber explains, in “being human” but in humanising the organisation.  That may sound like a play with words but what it comes down to is not being everybody’s buddy, but truly grasping what stakeholders need, feel and want.

Why do CEOs admire Winston Churchill so much?

The Global CEO Survey from PwC revealed a lot of interesting attitudes among corporate chiefs but what caught our attention was the political leaders they said inspired them the most. Top of the list was Winston Churchill – war-time Prime Minister of the United Kingdom as it faced the threat of invasion. As CTN’s chairman, Lord Watson, is the Life Patron of the Churchill Archives at Churchill College, Cambridge we have more than an academic interest in this big thumbs up for Winston from the world’s CEOs.

So why did the 1,300 executives in 30 countries surveyed like the former PM so much?  One has to conclude that companies see this as a tough and challenging period of history for the global economy. What they admire in Churchill is the quality he was most famous for – dogged persistence. One of his quotes might give us a clue to his popularity.

Success is not final, failure is not fatal, it is the courage to continue that counts.

But there’s another side to Winston that we prefer to accentuate and that’s his flair for communication. The style was a bit dated even for the time but his genius was to unpack the key messages in a way that appealed to both his audience’s head and heart. He could inform and educate while also stirring the radio listener to action.

Within government, he streamlined the communications process so that all three branches of the armed forces spoke with one voice. That hadn’t been the case previously – particularly in the First World War, which Churchill had been politically active in. Winston created the Ministry of Defence with himself as its first minister giving a strong political lead to military matters.

Churchill’s career also had distinct ups and downs.  He was an MP as early as 1900 and a government minister (as a Liberal) in the First World War. His handling of the Galipoli campaign in that war was viewed as disastrous and with the loss of British lives would have felled a lesser man’s political career.  He left the Liberals for the Conservatives in the 1920s, served as Chancellor of the Exchequer from 1924 but then lost his seat.

For most of the 1930s, he took a back seat in politics. But those years were spent writing and making speeches – keeping his mind active and political instincts razor sharp.  Many wrote Churchill off as yesterday’s man – an old warhorse out of touch with the public mood. Then with the fall of Chamberlain as Prime Minister over Nazi appeasement, Churchill – a firm anti-appeaser – was appointed PM.

A thick skin and a strong viewpoint had seen Churchill climb back from political doom to become Britain’s great war leader. It’s little wonder that a career like that inspires many of today’s CEOs.

Why CEOs should adopt social media – a helpful graphic from MBA Online

 

The social CEO – fascinating insight into how consumers and employees increasingly expect the company chief to be engaging with social media.

 

SEC announcement could mean more CEOs on Twitter

CEOs not using social media today may need to in the future after a landmark ruling from the SEC last week. The face of IR is changing and the ruling may accelerate a process that’s already been underway. So what has the SEC done? It’s decided that companies can make market sensitive announcements on Twitter and Facebook.

The SEC was spurred into its deliberations by online movies on demand company Netflix.  CEO Reed Hastings had shared information with investors about the company’s growth prospects on Facebook. This led to a clamor for reform that the SEC has now responded to. Last week, it announced that far from stamping out this practice, it believed that using Twitter and Facebook could be seen in a positive light.

“We do not wish to inhibit the content, form or forum of any such disclosure, and we are mindful of placing additional compliance burdens on issuers. In fact, we encourage companies to seek out new forms of communication to better connect with shareholders.”

Under the SEC’s Fair Disclosure Rules, companies will have to inform shareholders through their website that they intend to use social media to provide information. The SEC’s concern is that shareholders who are using Twitter should  not get an unfair advantage over those who are not. So companies need to direct everybody to relevant announcements on social media.

This is a major step forward in the increased use of social media for internal communications and investor relations – as well as sales and marketing. Already, commentators are expecting the majority of investors in the future to access information this way as opposed to a press release or SEC filing. One effect of this will be an increased engagement by CEOs with social media as it becomes a primary channel for reaching out to global investors.  Social media demands a face behind the message and the face that matters most is the CEO.

Hootsuite blogged: “As investors make the transition to social media as a primary source of business information, putting a chief executive as the face behind this information is an easy way to reassure investors that the information is accurate and important.”  Very shortly after the SEC ruling, Bloomberg announced that Twitter feeds would be fully integrated into its service for the first time.