Should Your CEO Really be Blogging?

When blogs and social media really began to take off, there were some who argued that businesses should put their top executive’s face out there and get their CEO blogging about the company. Over time, that’s worked for some folks, and not so much for others. PR Daily offers further analysis on why it remains a challenging communications topic for many:

Mark Schaefer of Schaefer Marketing Solutions and the blog Businesses Grow says most CEOs will never get to that level of ease and comfort. Charismatic executives such as Steve Jobs and Richard Branson are atypical, he says, though that level of authenticity would certainly be an advantage for a CEO.

However, Schaefer says the interviews with the 10 bloggers show that they’re “out of touch with reality” in terms of what CEOs can and can’t say. “It’s naïve to believe that CEOs are going to be as authentic as someone who’s blogging about gadgets,” he says.

A key reason for that difference, he says, is the law. For example, a CEO whom Schaefer knows tweeted about a meeting with shareholders only to find he had broken a Securities and Exchange Commission rule. That CEO ended up paying a fine and having to appease angry investors.

“CEOs are under a tremendous amount of scrutiny,” Schaefer says.

The public isn’t the only constituency to consider, Olson says. Being critical of another company, another CEO, or the business environment in general may go over well in the public eye, but it “may threaten a CEO’s standing with his contemporaries or perhaps be read as disloyalty,” she says.

Likewise, saying doesn’t make up for doing, Olson says. Expressing sympathy for employees who lose benefits doesn’t mean much when a CEO is taking home a big salary or huge bonuses.

“PR can’t fix an inherently and systemically flawed corporate structure,” she says.

Bernstein points out that some points the bloggers make are contradictory. It’s hard to be fearless and authentically human at the same time, he says.

“Even Seal Team Six members feel fear,” Bernstein says. “However, coming across as confident despite any fear is admirable.”

Should CEOs Send Mass Responses to Criticism?

The question in the headline makes me think of the recent Netflix flap, in which its CEO emailed the company’s customers basically apologizing for some unsuccessful moves. As Best Buy now battles online retail giants like Amazon and faces criticism about annoying upselling and not meeting order demands around Christmas, company CEO Brian Dunn offered the following response on his blog. Here’s the post in its entirety (below). From a PR perspective, was this the right move?

Best Buy has been taking some criticism lately. As CEO, I know that criticism goes with the job, and I’m well aware we have some challenges. I also know that errors we make often translate into a poor experience for our customers, and that is simply unacceptable.

Still, while I agree with some of the commentary on areas we need to improve, I feel it’s important to set the record straight on statements about our company that are, in my opinion, not completely grounded in fact. And I feel the need to do so, in part, to make sure our 180,000 hard-working employees understand the whole story – and have the full context that allows them to develop their own opinion about what’s written and said about Best Buy.

Let’s start with a couple of examples where I think the critics got it right.

The cancellation of some internet orders just before Christmas was our fault, and it’s not representative of how we EVER want to treat our customers. I’ll spare you the technical explanation of how and why it happened, but we know we did not deliver a good experience and we’re truly sorry. We’ve worked to make amends with customers whose holidays were made less happy because of our mistake, and we’re working diligently to make sure it doesn’t happen again.

Another area where we have received fair criticism is the overall speed of the transformation of our business model – something we are working hard to address. We’ve accelerated changes to key elements of our model already (the significant expansion in the number of products available on and the launch of our online Marketplace are two recent examples), but we need to move even faster, particularly in creating a more seamless experience between our stores, web sites, call centers and services teams. We recognize people can and do shop from anywhere, and they expect thoughtful, helpful interactions from us every step of the way. We continue to invest in a number of areas – from employee training, to critical system enhancements – to ensure our customers always receive the kind of experience they deserve and expect from us, wherever and whenever they choose. But, simply put, that work needs to happen faster – and we’re taking significant steps to accelerate the pace.

Now, onto a couple of topics where I disagree with the critics.

First, some believe the internet has made physical retailing (i.e., stores) irrelevant. There’s no doubt that the internet, and the mobile web in particular, have changed the way people shop, but there is strong evidence that consumers continue to value the experience of shopping in stores. A recent study by the NPD Group, a leading market research company, notes that nearly 80% of consumer electronics revenue still moves through physical stores. Additionally, approximately 40% of customer purchases made through are picked up in one of our stores. And the truth is, traffic in our physical stores increased in our third quarter and has been trending positively for most of the year.

Finally, there are those who question the validity of Best Buy’s business model. This misguided perspective is especially troubling for me, because it blatantly and recklessly ignores overwhelming evidence to the contrary. Best Buy is a financially strong and profitable company that has generated more than $2.6 billion in cash flows from operating activities in the first three quarters of the fiscal year. We also delivered positive operating income in each of the first three quarters of fiscal 2012. We grew total market share in the third quarter according to the most recent public data available. We have closed down certain operations that were not profitable, which we expect to have a positive impact on our earnings going forward. And we are focusing the company on areas where we see the greatest opportunities for growth and profit: mobile devices and connection plans; enhanced digital and e-commerce strategies; growth in our services business; and expansion of our established business in China.

As I mentioned earlier, we fully expect to receive our share of criticism – we’re a big company and we don’t always get everything right. But this is one of those times when I felt it was necessary not only to acknowledge our shortcomings, but to set the record straight on issues where facts are being obscured by rhetoric.

Brian J. Dunn
Best Buy Co., Inc.

Netflix CEO Faces Fire for Missteps

The New York Times conducted a pretty intense Q & A with Netflix CEO Reed Hastings following the Qwikster debacle last month. Likely some lessons here about long-term thinking — and facing the proverbial music. A sample:

Part of Steve Jobs’s legacy is how incredibly well he managed the Apple product rollouts. What do you think Jobs, who never minced words, would say about how Netflix has operated in the last three months?

I’m not going to put words in a deceased man’s mouth.

But you really botched the handling of the DVD spinoff, Qwikster. In your recorded launch announcement, you flubbed your lines. You somehow neglected to secure the Qwikster Twitter handle. Then, facing a backlash from shareholders and consumers, you put the kibosh on the whole idea. Seriously, what’s the deal?

Over the last couple of years, we’ve been moving toward streaming, doing the Starz deal, doing the Xbox deal. We simply moved too quickly, and that’s where you get those missed execution details. It’s causing, as you would expect, an internal reflectiveness. We know that we need to do better going forward. We need to take a few deep breaths and not move quite as quickly. But we also don’t want to overcorrect and start moving stodgily.

Last month, when announcing Qwikster, you apologized for the way Netflix handled its price hikes, writing, “In hindsight I slid into arrogance based upon past success.” But wasn’t introducing Qwikster the way you did the most arrogant move of all?

No, I think it was just a mistake in underestimating the depth of emotional attachment to Netflix.

I’m curious if you could have done any kind of research — or even a select-market rollout — that could have anticipated this?

I don’t know of any Internet service that opens on a regional basis. Our focus-group work concentrated on trying to understand consumers’ perspectives on names other than Netflix.

The company’s stock has fallen from more than $300 in July to under $120. More than $9 billion of market capitalization has disappeared. For the benefit of shareholders, have you considered stepping down?

No, not for a second. I founded Netflix. I’ve built it steadily over 12 years now, first with DVD becoming profitable in 2002, a head-to-head ferocious battle with Blockbuster and evolving the company toward streaming. This is the first time there have been material missteps. If you look at the cumulative track record, it’s extremely positive.

Why Stock Markets Rise While Economy Struggles

Like me, many of you may wonder how the stock market can rise while an economy continues to slump. And, also like me, some of you may wonder if NBC thinks you’re a fool — switching the actresses playing the mom on "The Fresh Prince of Bel-Air" with hardly a satisfactory explanation.

Well, Steven Dolvin, associate finance professor at Butler University, at least tackles the first question in a recent column for Inside INdiana Business.

Consider: Unemployment is still high (9.1 percent in May 2011). The depressed housing market is the most undervalued it’s been in 35 years (according to Capital Economics), with foreclosures expected to jump 20 percent from 2010. According to Gallup poll data, average daily consumer spending has declined 39 percent since May 2008.

Meanwhile, since March 2009, the stock market has basically doubled from its lows. Is this a disconnect with reality?

Not necessarily. Studying data from the 2011 Indiana CEO Survey indicates three reasons why the stock market has risen while the economy continues to struggle:

Companies serve global markets. The survey shows what business issues are important to the Indiana CEOs. While several, such as health care costs, employee retention and recruitment, and consistent execution of business strategy have remained flat in terms of importance, “growing the business internationally” has grown in importance. After slipping in 2008 and 2010 as CEOs focused on keeping their businesses afloat, this issue has increased in importance to its 2007 level.

The larger the company, the greater its international focus. For businesses in the S&P 500 Index, more than half their revenue typically comes from outside the United States. Some receive 80 to 90 percent of their revenue from outside our borders. While this international focus keeps their bottom line strong and their shareholders happy, it doesn’t necessarily translate into money spent in the U.S., helping our economy.

Job growth is a lagging metric. The Indiana CEOs were asked if they were going to reduce or add jobs. The survey indicates what you’d expect in a tough economy and recovery: After the recession hit, the likelihood of reducing jobs rose from 2007 to 2009 before beginning to decline. Meanwhile, the likelihood of adding jobs declined steeply from 2007 to 2009, before beginning to increase.

While the likelihood of more hiring has increased, actual hiring hasn’t yet. Actual job growth lags behind the stock market, which tends to be a forward-looking metric. People make investments based on what they think will happen, rather than what’s happening now. That’s why, in terms of job creation as a component of business performance, the stock market anticipates a rosier picture than current reality.

Trickle down takes time. In the survey, the Indiana CEOs said they believe there is more public and private funding available for business success, compared to last year. They say the amount of funding has increased on both the equity and debt sides since the recession. As funding increases, companies can leverage their positions more. This translates to better returns, which leads to happier shareholders. On this idea of more money = more profits, the stock market rises.

Get Employees Back on Track

A recent article by Forbes asks an intriguing question about what motivates employees more – incentives vs. recognition. You can read the entire article for elaboration on each question (below) that companies should ask themselves:

It takes two to tango. These days, however, many chief executive officers worry they may be dancing alone with their employees standing idle on the sidelines. The recession has pummeled employee engagement, and poor employee morale has left CEOs feeling out of step with their workforce. What can you do to get your workers moving again? How do you capture their hearts and give them back the drive to do their very best?

Two tools are often prescribed to CEOs by their human resources experts: incentive programs and recognition programs. Incentive programs are contests usually limited to a specific group within a company, such as sales, in which employees compete to win some prize. By contrast, recognition programs acknowledge and reinforce the accomplishments of the majority of employees. They are more about long-term goals and values.

When and how these two approaches are best used can get confusing. As a CEO who has dealt with incentives and recognition for more than a decade, I offer five questions for you to ask to help you determine which may work best for you.

  1. Is your company morale in a state of emergency?
  2. Do you know what really motivates your employees?
  3. Do you just need to hit a quarterly target or deadline?
  4. Are you trying to motivate your entire workforce or just your star performers?
  5. Are you and your team committed to making employee engagement both an art and a science?

Economic Club Speaker was Chided for ‘Outlandish’ Economic Predictions — That Came True

Patrick Byrne, CEO of, was widely criticized by financial professionals and journalists for predicting a global financial crisis more than two years ago. Byrne, a native of Fort Wayne who received his education from Cambridge and Stanford, warned of a market meltdown perpetrated by cheap credit and writing checks on the bank accounts of future generations. The man who took from a half-million dollars in annual revenue to nearly $1 billion annually, takes little pleasure in accurately predicting our current economic situation but continues to advocate for what he feels are positive reforms – specifically to the controversial practice of short selling stocks.

Byrne will appear at the Economic Club of Indiana luncheon in Indianapolis on November 5. Get your tickets today.

CEOs a Little Late to Social Media Party

The web site (pretend there’s an umlaut) recently surveyed business leaders’ use of social media and the findings were a little surprising — at least to me.

We’re surprised, but not shocked, to find that the top CEOs in the country appear to be mostly absent from the social media community.  That’s the result from research we conducted over the past several weeks.  We looked at Fortune’s 2009 list of the top 100 CEOs to determine how many were using Facebook, Twitter, LinkedIn, Wikipedia, or had a blog.  The results show a miserable level of engagement.  Here are the topline results:

  • Only two CEOs have Twitter accounts.
  • 13 CEOs have LinkedIn profiles, and of those only three have more than 10 connections.
  • 81% of CEOs don’t have a personal Facebook page.
  • Three quarters of the CEOs have some kind of Wikipedia entry, but nearly a third of those have limited or outdated information.
  • Not one Fortune 100 CEO has a blog.

I’d imagine most of these CEOs would make the argument that they’re "too busy doing actual work" to engage in social media. Do you think that’s the right attitude, or are they missing out on exposure or improved customer relations for their business by not being engaged?

Sanford Debacle Provides PR Lessons for CEOs

Well, we’ve complimented South Carolina Governor Mark Sanford’s more sound and judicious moves on this blog in the past. Now, suffice it to say, "sound" and "judicious" might not be applicable for him this week (although we all have our bad weeks).

However, took a look today at how his disappearance — which ultimately led to the disclosure of his affair — could serve as a lesson for CEOs in the business world. Read on:

To paraphrase Simon and Garfunkel: Where have you gone, Mark Sanford?

For the past few days, journalists, politicians, South Carolinians, bloggers, and your wife wondered about your whereabouts. First, we heard you were hiking the Appalachian Trail.

Well, not so much.

It turns out that you were in Argentina visiting a woman with whom you’ve been having an affair. (That’s a whole other domestic communication quandary.)

The issue for corporate communicators is this: Let’s say your CEO leaves unexpectedly—doesn’t even send a postcard. How do you communicate the message to your employees and other stakeholders?

Dustin R. Walling, principal of Dustin Walling Associates, shares these four tips on dealing with a missing or ailing CEO.

Business as near-usual: Every good corporation of size has—or ought to have—a well-conceived set of strategic and tactical plans. This is one of the primary jobs of the CEO and the executive team. If these plans don’t exist, hire a management consultant and get to work.

Appoint the next in command: The COO, CFO, or another key executive is the likely candidate to stand in during the CEO’s absence. The board should meet immediately and appoint one executive, a member of their own ranks, or another trusted leader to the position. Continue reading

Follow the Indiana Chamber on Twitter

In our continuing effort to trumpet the need for a strong business climate in Indiana and the country and to inform you about all things business-related, we’ve launched a Twitter feed to keep followers aware of our goings on. Yes, the feed will promote our recent blog posts, but we’ll also add some other facts, happenings, reports, and things you’ll want to know.

Sadly, unlike the innovative and certainly enviable Virgin CEO Richard Branson, we have no tangible prizes to offer followers — just our gratitude. What? No good? OK, yeah, then we have nothing.

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