The CEO as the Brand

A few weeks ago I heard John M. Coleman, a respected lawyer and expert on governance of corporate boards, speak about who caused the financial meltdown.   Eschewing the conventional wisdom of blaming financial complexity, China, easy credit, lack of government oversight, etc., John put the major blame on what he calls the Great Man Syndrome.  He believes that CEOs, especially those who hold both the Chairman and CEO titles, often have no boss and, therefore, no accountability.  They rule absolutely, can use corporate resources to advance their own interests and often set their own compensation (he noted the ratio of CEO pay to average worker pay in the U.S. is 231:1, 10 to 20 times greater than the ratio in most industrialized countries).

This view of the CEO as the Great Man Syndrome contrasts sharply with Jim Collins’ research about CEOs in his seminal book Good to Great.   Collins’ team found that the CEOs of companies that moved from average to exemplar performers were not media darlings.  As Collins explained, “The good-to-great leaders never wanted to become larger-than-life heroes…They were seemingly ordinary people quietly producing extraordinary results.”  In fact, if I listed the 11 CEOs of the good-to-great companies, most people would say “Never heard of them.”

All this got me thinking about CEOs who are/were very visible, such as Steve Jobs, Bill Gates, Lee Iacocca, Al Dunlop, Steve Wynn, Warren Buffet and Donald Trump.  Clearly, all these leaders would not fit the Great Man Syndrome.   But having a very visible CEO raises an important question about the long-term impact on the company brand:

If the CEO becomes the personification of the brand, what happens when the CEO is no longer there? 

Whether due to retirement, resignation, dismissal or death, every CEO’s reign will end.  If the brand is so tightly connected to the CEO, this can put the company brand on shaky ground and cause a difficult transition to the new CEO.

The ups and downs of the Apple stock during Steve Jobs’ illness and death were as much about his personification of the Apple brand as about his leadership capability.  He was innovative and brash, and the Apple brand reflected these attributes.   Tim Cook’s success thus far is not because he is trying to be Steve Jobs, but because he seems to be making an effort not to imitate Jobs.  He is putting the focus where it belongs: on Apple’s products and services being innovative.  Time will tell if he is successful.

Microsoft is a great example of moving beyond the founder’s persona as Bill Gates transferred the mantle to Steve Ballmer.  It helped that Gates gradually removed himself from day-to-day operations to focus on his philanthropic endeavors.   Ballmer has put the Microsoft brand, not himself, in the spotlight.

Steve Wynn is an example of a CEO’s brand becoming larger than the company brand.  Quick, name the hotel/casino Wynn led in the 1980s when he appeared in commercials with Frank Sinatra?*  Eventually he owned/operated a number of casino brands, but he parlayed his high name recognition by naming his biggest property after himself.  Wynn Las Vegas represents the merger of the CEO and company brands.

Sometimes the CEO “celebrity” is a short-term necessity to address a specific situation.  When Johnson & Johnson’s Tylenol was tampered with and seven people in the Chicago area died in the fall of 1982, J&J’s CEO Jim Burke became the spokesperson for the company.  First he asked consumers to not use the product until the extent of the problem was known.  When the scare was over, Burke asked consumers to trust the company again because the problem was caused by an unknown person or group, not by the company’s actions.   The company introduced new packaging that made it more difficult to tamper with the products.  Burke eventually removed himself as spokesman, but his actions rebuilt trust in the Tylenol and J&J brands.

Today, the CEO of every major company needs some visibility to communicate with key constituencies (investors, regulators, employees, etc.).  However, deciding the CEO should be the primary communicator to represent the brand to customers is a major step that must be considered carefully to determine the long-term impact on the brand.  If you go this route, you need to plan for the day when the CEO is no longer in place.

 

* The Steve Wynn-Frank Sinatra commercials were for the Golden Nugget.

 

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