“Your brand is the single most important investment you can make in your business,” according to Steve Forbes.
However, what Forbes failed to clarify is that a business has three separate brands to consider; its consumer brand, its employer brand and its CEO’s brand.
And, according to a recent study of 1000 UK citizens conducted by Prophet, the latter should not be underestimated.
Dev Modi, Associate Partner at Prophet, highlights four key findings that illustrate the importance of a Chief Executive’s personal brand to the business…
1. Profits
It is a given that customers are less likely to buy from a brand that they dislike - but the same goes for the CEO too. According to Prophet, 68% of people said they will not buy a product/service if the CEO’s personal conduct is revealed to be unethical.
Modi says: “When expectations are met or exceeded, a place upon a pedestal awaits. However, when performance, behaviour or results fall short, uncertainty abounds. And where a leader is viewed with uncertainty, there’s certainty of a tumble in the share price.
“Major brands have faced perilous financial positions brought about as a direct result of a CEO’s actions, the most notorious being Fred the Shred of RBS, with consequences so dire, a complete re-brand of the bank was essential.
“Yet it’s not only direct actions and words that can hit sales, profit and growth - others are deemed villainous by association, as has been shown with the boycotting of Ivanka Trump’s products by a vociferous Twitter campaign.”
2. Talent attraction
The CEO’s brand also has a strong impact on the company’s employer brand too. Prophet’s study shows that 77% are attracted to work for an organisation where the CEO has a strong, positive personal brand.
“When a leader’s brand is promoted intelligently, consumer attention can be secured and top talent can be attracted,” says Modi.
He gives the example of Sacha Romanovitch, CEO of Grant Thornton and the first female leader of a top accountancy firm in the UK: “She brings lashings of personality that gets lapped up by the media, adding value to her company in an otherwise grey industry. She also attracts other leading women in her field, creating a competitive edge for her firm.”
He continues: “With the heroes established, by stark contrast, the villains emerge; leaders who become embroiled in scandal and media revelations impact not only consumer perception, but the perceptions of potential candidates. When faced with a competitive market, one in which companies must reinvent, innovate and evolve, the CEO’s ethics and personal conduct directly relate to their profitability.”
3. Employee retention
But it is not just attracting employees that is impacted by a CEO’s brand, it is also retaining them. And although employees of larger businesses may not even come across their CEO, Prophet’s findings indicate that 67% would consider leaving an organisation because of the negative example of the Chief Executive.
Modi explains: “The power of a strong CEO is not limited to their ability to attract, but also to retain and influence existing employees.
“This is of such importance, that a company’s culture can be shaped or broken entirely by its top leader. Take the appointment of Satya Nadella at Microsoft, a 22-year veteran of the brand, known both for his tech and business genius. Regarded by his colleagues as sincere and honest, he is a beacon for the brand.”
4. Role modelling
Naturally, being the face of a company and being in the public eye means that a CEO’s brand can be very influential. And therefore 80% believe it is the responsibility of the CEO to be a role model in society.
Furthermore, Prophet found that 86% believe the CEO should role model the behaviours that they expect of their employees. Meaning they are not only responsible for their own actions, but also the actions of those throughout the company.
Modi concludes: “The study underlines the importance of choosing correctly when it comes to a company’s CEO, not only in relation to the consumer and employee, but also when it comes to attracting and retaining talent. After all, in this modern world driven by social media, even the most powerful of media connections cannot overcome the outcome of the actions, behaviour and results of a CEO villain.”
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