Reputations In Crisis
Bill George, author of True North and Authentic Leadership, was back in his hometown recently to hold a unique forum of international business leaders discussing the topic of leadership in a crisis. Bill facilitated what he called a civil discourse—which he notes is rare in society these days—in part to demonstrate that such discourse can actually still happen, and also to garner stories from the trenches of business leadership in its darkest days.
Guests on stage included John Donahoe, chair and CEO of eBay; David Gergen of CNN and the Harvard Kennedy School; Anne Mulcahy, chair of Xerox; and our own Marilyn Nelson Carlson, chair of Carlson Companies. The morning after this sold-out event, I sat down with Bill in his Minneapolis office specifically to get his thoughts on reputations under stress.
Q: You’ve written about the moral compass, authenticity in leadership and now the steps for leading in crisis. All are excellent guides on digging down deep to center yourself to stay strong and effective during times when your leadership is being tested. Where does reputation fall in all of this?
>> Reputation is in the center. The topic of reputation is becoming more important. I see it being actively discussed at the board levels of Goldman Sachs, Novartis and Exxon Mobil, where I have served as a board member. These boards are starting to recognize that their primary role is to preserve and build the reputation of the corporation. It can take 30 years to build a reputation, and it can be destroyed in 30 minutes.
Take Exxon—they’re doing a marvelous job of repairing and rebuilding their reputation. They know how important this work is. And they know they have to be on top of it because they are constantly under attack. It’s been a misconception among most businesses that reputation management is an easy task. It’s been 20 years since the Exxon Valdez incident, and Exxon is still constantly working on its reputation—and probably always will.
And then there’s Goldman Sachs. No one works harder at reputation than this company. In a matter of months, Goldman has gone from being a hero to a pariah, yet it is the company that came through the financial meltdown stronger than anyone. And now, because it has restored itself to significant financial profitability, people are really upset. The company hasn’t done anything wrong, but it must work extraordinarily hard on its reputation during these times. The CEO is out giving lots of speeches, talking in a prominent positive article in the New York Times, getting out and telling the Goldman story.
Reputations are extremely fragile right now. Reputational issues come out of the blue that you never expect, and then you have to deal with them in the public eye.
Q: Given this, how are leaders preparing differently now, when everything has the potential to go public?
>> Public discourse has reached the ridiculous stage. The lack of decorum extends into the business world, because people in general blame corporations for a lot that has happened this year. So the role of today’s leader has changed dramatically. We used to think we could share confidences with small groups, or keep things internal for employees only. Wise executives are realizing that everything is transparent, so they might as well be transparent themselves.
You need to tell your story so others don’t tell it for you. Let people know what the company does, why it’s important … Tell that story every day so people understand it and appreciate it. Otherwise only the negative will come out. At least, by telling your story, the coverage will be more balanced. It’s essential to be proactive with this.
At Harvard, there is more communications training and coaching happening because these skills are essential. I teach a class just on how to communicate with the outside world. I tell my students that they are ultimately responsible for reputation, and that reputation is everything. At times like these, the leader is the reputation of the company. You can’t send out another to do your job.
Q: When you the CEO of Medtronic, you were responsible for cultivating that brand. On your own, you are a brand onto yourself. Tell me more about the differences.
>>Reputation goes with you wherever you are, whether you represent a corporation or are independent, serving on a board, or running your own company. You are responsible for the reputation of any organizations you are affiliated with. I felt that when I was within larger corportations, and still feel that reputation (now mine) is very important. When I serve on the board of an organization, I strive for ethical behavior because I am concerned about doing the right thing…and how my actions will look. I use my own True North as my guide.
Q: What are mechanisms you use to keep yourself reputationally fit?
>> I feel it is extremely important to have external directors. You can’t, as they say, “sit in your own bath water” and “drink your own Kool Aid.” You can’t believe the stories you tell yourself – that is extremely dangerous. Every leader concerned about his or her reputation must develop an enclave of unbiased people willing to give you feedback. I consider it healthy to function in somewhat of a paranoia. I am constantly asking others “how does this look to you?” It’s imperative to ask very good questions, be out talking to people, and hearing what people are saying. I have my wife and my men’s group as key members of my enclave. I check in with them on what people say about me, like “you’re too conservative to be on the Exxon board.” What do they think? Members of enclaves and boards now spend an enormous part of their meetings talking about the person or the company’s reputation.
But what I think what you may be referring to is resilience. Resilience in a leadership position is paramount. It is really tough right now to be a leader, like those of us on the Goldman Sachs board. Peole are accusing companies like Goldman Sachs of totally off-the-wall stuff right now. And you have to know how to deal with that. You need to find the resilience to let inappropriate information roll off your back, and to have the strength of dignity to rise above these things.
Q: Why does it feel like our world is moving to one with simply a lack of manners right now?
>> Our society is really split on how we see our society. There is not a common point of view on so many things right now…especially with our new President. We (the U.S.) were very “together” on Sept. 12, 2001, but we’ve gotten further and further apart every year that has passed since then. I was hoping that Obama would bring people back together, but there is a real lack of civility in our society right now. The media is a contributor – we need more thoughtful commentators, like those who work for public TV and public radio. When the media engages in food fights, people watches this…they enjoy it. The media would not be doing this if people didn’t want it. But is this really what we want?
We have to go back to the citizenry. We need to return to a civil discourse, especially around complex issues. Why can’t we sit and talk, together, and have a thoughtful discussion? Some issues are so crucial to talk about -- why aren’t we talking about those? One of the reasons we recently hosted our leadership in crisis summit was to bring thoughtful leaders together to have a civil discourse. Was I concerned that someone would stand up and say something in the middle of our event? A little. Fortunately, no one did that. So there’s still hope! People with differing views have to take the time to go deeper, dig deeper, and listen to each other. We need to stop attacking and have a discussion. It’s a shame not to.
Q: So what are your words of advice in a hostile environment? What are you talking about with your students and your peer group?
>> Yes, I am seeing a lot of hostility out there right now. I writes column for Business Week and WallStreetJournal.com, and I never knew just how many angry people are out there. They respond to thoughtful articles by attacking.
To answer your question, I think leaders need to recognize that they are the carriers of the reputation for their organizations. They must step up to that role, it cannot be delegated. You can’t duck it – you become the face of the organization. When Joe Dowling faces budget cuts at the Guthrie, he can’t send the CFO to tell the news. Just say it – get out there and do it. Politicians are the worst at this, even the media is more authentic. When you are a leader, people know who you are. They watch your every move. In politics, we seem to always be voting for an image, that’s why we can easily put someone in office that has marginal values. We all have weaknesses – it’s not about that…it’s about having a moral compass.
Q: How can we find the authentic leaders?
>> We have to focus on character instead of charisma. We have to look for character and integrity, not image. If you don’t trust somebody, why would you align with them? Why would you put yourself on the line? If someone makes a mistake they must admit it and move on. Everyone owns their own mistakes. Future leaders have to be comfortable to be transparent internally and externally. They must show their vulnerabilities. There is strength and power in vulnerabilities. Leaders have to ask other people for help, and really listen to their advice and counsel. Keep perspective, keep others around you – always have people who will call you to tell you the truth about yourself.
