Brand and Reputation in the BoardroomThe role of the CEO with regard to brand and reputation

Consulting Corporate Finance Management

Table of contents

1. Introduction . . . . . . . . . 5

2. Brand and Reputation . . . . . . . . 7

3. Research design . . . . . . . . 8

4. Results and conclusions . . . . . . . 12

5. Implications and recommendations . . . . . . 17

About Boer & Croon . . . . . . . . 19

About the author . . . . . . . . 21

A selection of recommended literature . . . . . . 22

3

1. Introduction

Many a CEO is looking to find the right balance in his* own positioning. The modesty of Dutch

CEOs results in them not seeing themselves as the personification of the company. They do,

however, accept the role of figurehead, particularly during difficult times. This is one of the

conclusions of the research study ‘Brand and Reputation in the Boardroom’ carried out among

20 Dutch CEOs by Boer & Croon associate Koenraad van Hasselt, as part of his Masters degree.

In the past, Boer & Croon had already commissioned research on the view taken by Dutch top executives

on reputation management (‘Executives on Reputation’, Ron van der Jagt, 2005). In supporting this new study,

Boer & Croon hopes to get a better understanding of the CEO’s personal commitment to the corporate brand

and the reputation of his organisation. The research will provide an impetus for furthering professio-nalism

and strengthening Boer and Croon’s activities in the areas of reputation, branding and communication. The

purpose of this qualitative research was to gain a better understanding but due to the scope and purpose of

the study the findings cannot be considered as being representative of all Dutch CEOs.

During the interviews with the CEOs it became clear that they concur with the value of the corporate brand as

a binding factor between vision, culture and brand promise.

According to the CEOs, customer satisfaction and delivering on the brand promise have the biggest impact

on the corporate reputation, followed by stakeholder relationships and the reputation of the industry sector.

Therefore, it is not unusual that in addition to value creation, CEOs are held accountable for ‘soft’ performance

indicators such as customer and employee satisfaction, diversity and the performance of the Board of

Directors.

* For easier readability, masculine pronouns have been used.

5

The relationship between brand and reputation is a fascinating one. The world of communica-

tion accommodates brand thinkers and reputation thinkers.

Brand managers regard the corporate brand as the roots and ultimate purpose of the company. What matters

is to make the brand promise relevant for all stakeholders. Reputation managers are more likely to focus on

the ‘licence to operate’: without the support of the stakeholders the right of existence and the continuity of

the company will be at risk.

Consistently living up to the brand promise and a consistent way of expressing this promise have a positive

effect on perceptions among the stakeholders. This calls for leadership and a structured approach.

2. Brand and reputation

7

Interviews were carried out between May and September 2010. Twenty CEOs, from various

industry sectors, contributed to the study.

Figure 1: This study was made possible thanks to the cooperation of the above CEOs.

In addition to the interviews, a detailed literature study was carried out focused on the triangle brand -

reputation – leadership. The literature shows that the CEO plays a key role in the complex world of brand

and reputation. On the one hand, he represents the organisation’s heritage, culture and vision, but on the

other hand he is , first and foremost, the person stakeholders hold accountable for the performance of the

organisation.

A strong brand gives direction to a company and a good reputation creates added value for, among other,

shareholders, customers and the labour market.

3. Research design

Name

Niek HoekChairman BoM

Joop van OostenChairman BoM

Peter Molengraaf Chairman Board of Directors

Pieter JongstraManaging Partner

Gerrit ZalmChairman BoM

Willem van DuinChairman BoM

Feike SijbesmaChairman BoM

Ben NoteboomCEO

John Paul BroedersCEO

Sjoerd VollebregtChairman BoM

Company

Delta Lloyd

Koninklijke BAM Groep

Alliander

Ernst & Young The Netherlands & Belgium

ABN Amro bank

Eureko

DSM

Randstad Holding

Koninklijke Vopak

Stork

Name

Wout DekkerChairman BoM

Ad ScheepbouwerChairman BoM

Sander van der LaanManaging Director

Jan de JongManaging Director

Bert MeerstadtChairman Executive Board

Gerrit WitzelChairman BoM

Peter HartmanChairman BoM

Robert SwaakChairman BoM

Jos BaetenChairman Board of Directors

Gerard van de Aast Chairman BoM

Company

Nutreco Holding

KPN

Albert Heijn

NOS

Nederlandse Spoorwegen

Heijmans

KLM

PwC Netherlands

ASR Nederland

Koninklijke Volker Wessels

8

The hypothesis that underlies the research is that there is a correlation between corporate brand characteris-

tics and the personal involvement of the CEO with brand and reputation. In order to be able to properly

identify the studied brands, the Brand/Reputation grid by Riezebos (2005) was used. This grid classifies

corporate brands into one of four types, which have a focus on ‘product’, ‘process’, ‘market’ or ‘the organisation

itself’. This classification is developed by putting together the internal image (‘how the company sees itself’)

and the external image (‘how others see the company’).

Figure 2: Brand/Reputation Grid (Riezebos, 2005)

Externalimage

Self image

Market

Process Product

Strong

Strong Weak

Organisation

9

As an extension to the brand/reputation grid model, the role of the CEO with regard to brand and reputation

can be characterised as follows:

Introvert (product-driven): Focus on internal communication, brings together all internal parties that •

have an effect on the brand and reputation, allows all parties to contribute, an atmosphere of openness

and mutual trust.

Modest (process-driven): Focus on functional communication, based on trust, stability and control, •

not aimed at brand and reputation.

Extravert (market-driven): Focus on image, seeks publicity and thrives on it, comes across as being •

purposeful and self-assured. Very customer-oriented, challenges others.

Brand champion (organisation-driven): Continually moves the goal posts, is at the forefront of industry •

developments, anticipates the future and steers innovation and change. Actively disseminates this to

both internal and external audiences. Gives hope, outlook and manages to get his employees behind his

vision.

The interviews assessed whether the brand characteristics explained the CEO’s sense of commitment to brand

and reputation. In addition, four ‘general’ explanatory variables were evaluated: personal experience and back-

ground, industry sector, whether the company is listed or not, and brand architecture.

10

Figure 3: Research Model.

The consequences are focused on the commitment, in practice, of the CEO. Time allocation, organisational

context of brand and reputation, the priority on the management agenda and the CEO’s KPIs were addressed,

among other things.

Antecedents: possible explanatory

variables

Consequences, vision on 8 themes

Brand and Reputation commitmet

CEO

Extravert Champion

Modest Introvert

Hypothesis: four types of brand/reputation orientation

11

The main conclusion of the study is that the CEO’s leadership style is not always consistent with the

characteristics attributed to the corporate brand. The role the CEO sees himself in is one of bringing

about a shift in market focus and culture; this also includes a shift in brand characteristics.

A relatively large number of the interviewed CEO’s consider their own leadership style to be visionary while the

corporate culture is process or market driven.

Figure 4: Results business orientation and leadership style.

4. Results and conclusions

Company culture Company orientation

7

8

5 1

93 4

Competitive Enterpreneurial

Controlled Family business

Market Culture

Process Product

Critical success factor Leadership style

7 5 19

4

Winning Teamwork

Reliable Unique products

Competitor Visionary

Monitor Facilitator

7

5

1

# respondents

12

Figure 5: Corporate brand typology and CEO commitment to brand & reputation.

Figure 5 shows that there is not a one-to-one relationship between the corporate brand typology and the

CEO’s commitment.

One of the main explanations for the affinity a CEO has with brand and reputation appears to be the industry

sector in which the company operates. The interviewed CEOs in the construction and financial sectors were

clearly cautious in positioning themselves and their companies. They claim this is due to the recent loss of trust

these business sectors suffered.

Many a CEO appears to be preoccupied with finding the right balance between cautiousness and exuber-

ance concerning their own profile. The term Celebrity CEO, which never really became commonly used in the

Netherlands anyway, is now definitely no longer relevant. Successful CEOs are leaders who set out the course

behind the scenes with becoming modesty and ensure that the company moves in the right direction. All the

interviewed CEOs accepted the fact that they are the figurehead of the company. Frequently it is not a chosen

role but the CEO is simply seen and approached by the outside world as the one primarily responsible for the

company. The shown modesty is to the Dutch CEO’s credit: he does not see himself as the personification of

the company but merely as a passerby allowed to play a prominent role for the company for a specified time.

7

Product

1

3

# respondents

Process Market Organisation

Introvert

Modest

Extravert

Champion

2 1

2

1 2

13

Figure 6: CEO as figurehead.

None of the CEOs interviewed doubted the importance of the corporate brand. They definitely realise that

the brand is an important intangible asset (difference between market value and book value), but do not see

the point of actually measuring the financial value of the brand. The CEO does, however, see the relevance of

measurements in terms of brand visibility and brand preference.

The CEO’s role is that of steering the development of the corporate brand as this is directly linked (at least it

should be) to the vision, mission and core values, all matters which he regards as his responsibility.

In the first place, the CEOs see the corporate brand as a strategic issue, for example, when dealing with brand

hierarchy (whether to endorse or not) and the positioning of the brand during mergers and acquisitions.

Although the interviewees immediately associate the relevance of the corporate brand with customers and

consumers, they also indicate the importance of the brand as a catalyst within the organisation. Particularly

in international companies, the corporate brand sets a direction and provides consistency. A strong brand

induces coherence in the way employees perform and present themselves. Brand compliant behaviour, i.e.

living up to the core values and brand values of the company, is increasingly becoming one of the fixed

performance indicators for employees, often laid down in companies’ performance appraisal systems.

I am the �gurehead and set the tone as a role model

I take my responsibility, it comes with the job

I don’t feel like a �gurehead, others see it like that

Number of times mentioned (multiple answers allowed)

6

4

2

“ I am the �gurehead, but the company does not determine who I am, I am only allowed to do it for a certain time”

“When I become the personi�cation of this company, I have to leave, otherwise this is doomed to fail”

“I am the company, from head to toe, but the power comes from the collective”

“I am the incarnated enterprise, in particular in times of misfortune”

“I am only a hired gun, with an impact for a certain period”

“I am too old to change myself, it is easier to change the company…”

14

CEOs consider it a priority to explain their vision and objectives internally and to express the core values. They

use all means and tools to reach their employees and interact with them. The use of social media is still in its

infancy and only a few CEOs use this medium.

The Corporate Marketing or Corporate Communications Director, and sometimes a member of the Board

of Directors, is responsible for the day-to-day running of the brand. CEO´s consider the day-to-day brand

responsibility as being operational and believe the corporate brand can be ‘controlled’. This is in contrast to

reputation, which they believe simply just happens to a company and therefore deserves more attention.

Without exception, the interviewed CEOs stated that they and they alone are responsible for the reputation of

the company. They feel that it is something that they deal with on a daily basis. The interviewees cite customer

satisfaction and the company’s brand compliant behaviour as factors having the most important effect on the

reputation, followed by stakeholder relations and the reputation of the business sector.

In saying this, they are implicitly pointing at the relationship between corporate brand, or corporate brand

promise, and corporate reputation. The CEOs consider employees and customers to be the most important

stakeholders, followed by shareholders, the labour market and government authorities. This stakeholder

orientation is not consistent with the image created, particularly in the media, that in their role, CEOs are only

focused on shareholders or financial stakeholders in general.

Reputation was included as a potential risk in the risk management policies of the companies interviewed

but when asked what assessments and analyses this was based on, they could give no answer. The interview-

ees appeared to be unaware of the state of the art practices of reputation management. Only a few of those

interviewed head a multi-disciplinary reputation steering committee responsible for measuring, analysing and

monitoring reputation.

15

Although the CEOs are primarily held accountable for the financial performance of the company and value

creation, they are increasingly being given other, softer, targets. These range from customer and employee

satisfaction, the performance of the Board of Directors, the net promoter score and diversity, to helping in their

own succession planning. Only in a few cases are reputation and brand defined as performance indicators for

CEOs. It appears that the CEOs deem their own responsibilities and tasks in the areas of brand and reputation

to be more important than do the Supervisory Boards, who determine the performance targets for the CEOs.

Figure 7: The CEO’s KPIs.

Financial

Customer satisfaction

Employee satisfaction, engagement

Reputation

Role in the public cause

Integration process

Number of times mentioned (multiple answers allowed)

16

8

4

2

2

2

“My contribution to �nding a suitable successor for me is part of my bonus targets”

“For the �rst time my performance appraisal also contains a strategic and a behavioural component”

“I am made accountable, among other things, for diversity, in particular the number of women in management roles”

“I am made accountable for many things, the remuneration document spans some ten pages”

“My responsibility is now focused on the way the Board of Management is operating”

“Net promotor score is one of my personal targets, in addition to the company wide �nancial targets”

16

The results of this study once again emphasize the time-honoured truism that change is the only constant

for successful companies. Managing this process is one of the CEO’s main tasks.

CEOs acknowledge the importance of reputation and communication in successfully effectuating major

changes. It is, therefore, in their best interest to familiarize themselves with the latest developments and

methods in the areas of corporate branding and reputation management.

Communications Directors should put themselves more in the place of their CEOs, interpret their assignment

and understand their leadership styles. Communications professionals will have to speak the language of

the Boardroom: objective, based on facts and substantiated with figures. The Communications function must

make a measurable contribution to the implementation of major changes and, thereby, the organisation’s

objectives as a whole. Only then will brand and reputation earn the place they deserve on the Board’s agenda.

5. Implications and recommendations

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About Boer & Croon

Boer & Croon stands for high-quality service in consulting, corporate finance and management. This unique

combination enables us to come to grips with our customers’ strategic challenges and to find real solutions for

them. From inspiration to implementation.

We are unmatched in our ability to combine brainpower and decisiveness. An excellent mix enabling us

to quickly break new ground towards improved, sustainable results. The group comprises approximately

450 experienced consultants, managers and support staff.

Boer & Croon has many years of experience with assignments at the crossroads of strategy, organisation and

communication. We consult and support top management of the corporate as well as the not for profit sector

on change management issues where positioning, external perceptions, social responsibility and internal buy

in are key.

Nowadays, excellent communication is crucial for the (top of ) organisations, especially when sensitive issues

are at stake, such as an impending crisis, an organisational change, relationships in a complex stakeholder

arena, the introduction of a new strategy and mergers & acquisitions.

We help clients from the perspective of four areas of specialization:

Identity, mission and vision, positioning, brand strategy and reputation•

Issues management, crisis communication, stakeholders, media and public affairs•

Getting buy in and bringing the organisation into motion through change communication en strategic •

communication

Organisation and professionalization of the communication function and interim solutions •

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About the author

Koenraad van Hasselt MBM is originally a linguist but also studied Public Relations and Mass Communications

at the University of Utrecht and Brand Management at the European Institute for Brand Management (EURIB).

He held several executive Communications positions at international companies, including Akzo Nobel (in

the Netherlands and Germany), Canon Europe, Philips and KPN. At Philips Consumer Electronics he was

Vice-President, with global responsibility for Corporate Communications and at KPN he was the Director of

Corporate Communications.

Koenraad van Hasselt runs a consultancy (www.reputationmatters.nl) for Corporate Branding and Reputation

management. He is currently Principal at RiiЯ (Risk2 Reputation) (www.risk2reputation.com) in London. RiiЯ

measures, analyses and monitors reputational risk for large international organisations as an integrated part of

their risk management system.

Koenraad has performed various interim assignments for Boer & Croon, of which he has been an associate

since 2007.

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A selection of recommended literature.

Cameron, K.S. and Quinn, R.E. (2006), Diagnosing and Changing Organizational Culture, Jossey-Bass, San Francisco, US. •

Dowling, G. (2006), Reputation Risk: It’s the Board’s Ultimate Responsibility, Journal of Business Strategy, Vol. 27 No.2, pp. 59-68.•

Gaines-Ross, L. (2003), CEO Capital, A guide to building CEO reputation and company success, John Wiley & Sons Inc., Hoboken, •

New Yersey, USA.

Hansen, M.T., Ibarra, H. and Peyer, U. (2010), The Best-Performing CEO’s in the World, Harvard Business Review, January 2010. •

Hatch, M.J., Schultz, M. (2008) , Taking Brand Initiative (how companies can align strategy, culture, and identity through corporate •

branding) , Jossey-Bass, San Francisco, CA.

Ind, N. (2003), Inside out: how employees build value, Journal of Brand Management, Vol. 10, No 6., pp.393-402. •

Jagt, A.R.J. van der (2004) , Corporate reputatiemanagement (Bouwen aan vertrouwen in het transparantietijdperk), Kluwer, Deventer.•

Jagt, A.R.J. van der (2005), Executives on Reputation, Het topmanagement van het Nederlandse bedrijfsleven over corporate •

communication en reputatiemanagement, Boer & Croon Strategy and Management Group, Amsterdam.

Kotter, J.P. (1996), Leading Change, Harvard Business School Press, Boston, USA.•

Khurana, R. (2002), The Curse of the Superstar CEO, Harvard Business Review, September 2002.•

Morhart, F., Herzog, W. and Tomczak, T. (2009), Brand-specific leadership: Turning Employees into Brand Champions, Journal of •

Marketing, Vol. 73 (September 2009), pp. 122-142.

Olins, W., How Brands are Taking over the Corporation (2000). In: The Expressive Organization, linking Identity, Reputation and the •

Corporate Brand (Schultz, M, Hatch M.J. and Holten Larsen, M., ed.), Chapter 4, pp. 51-65, Oxford University Press, Oxford, UK.

Riel, C.B.M. van, and Fombrun, C. J. (2007), Essentials of Corporate Communication, Implementing practices for effective reputation •

management, Routledge, Abingon, UK and New York, USA.

Ries, A., and Ries, L. (2009), War in the Boardroom, Why Left-Brain Management and Right-Brain Marketing Don’t See Eye-to-Eye – •

and What to Do About It, HarperCollins, New York, USA.

Riezebos, R. en Van der Grinten, J. (2008), Positioneren, stappenplan voor een scherpe positionering, Boom, Amsterdam.•

Urde, M. (2003), Core value-based corporate brand building, European Journal of Marketing, Vol. 37, No. 7/8, pp. 1017-1040.•

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aanpassingen:

p. 3: Inhoudopgave > InhoudSamenvatting eerst of inhoud eerst? Samenvatting = inleiding?p. 6: Titel opgesplitst in titel en intro-tekstp 9. introtekst aanpassen (RJ)p. 10: hoofdstuk 4 onderverdeeld in 4.1, 4.2 etc... titels boven 4.1 ed nu zelf bedacht, anders?p. 12: ‘Op de volgende pagina’s’ > ‘hieronder’?

Boer & Croon

Postbus 75784

1070 AT Amsterdam

Amstelveenseweg 760

1081 JK Amsterdam

Tel.: +31 (0)20 301 40 00

Fax.: +31 (0)20 301 40 09

info@boercroon.nl

www.boercroon.nl

Boer & Croon stands for high-quality service in consulting, corporate

finance and management. This unique combination enables us to come

to grips with our customers’ strategic challenges and to find real solutions

for them.

From inspiration to implementation.

We are unmatched in our ability to combine brainpower and decisiveness.

An excellent mix enabling us to quickly break new ground towards

improved, sustainable results. The group comprises approximately 450

experienced consultants, managers and support staff.