In a recent meeting with a business reporter the conversation turned from business news to business communication skills. Between interviewing CEOs about the day’s news and attending investor conferences, this reporter complained about sitting through ‘too many lousy speakers, mumbling CEOs and jargon-spewing financial executives.’
The message here is crystal clear: If you want to be heard, communication style matters.
Just how much it matters may surprise you. Almost half of a company’s reputation relies on its CEO. Despite these high stakes, Edelman’s 13th Annual Trust Barometer delivers this disturbing news: fewer than half of those surveyed trust business leaders as credible spokespeople.
As the economy improves and executives emerge from their crisis cocoons, stakeholders won’t tolerate poor communication performance. It’s too costly. Reputation is no longer a soft public relations concept as companies like Oxford Metrica/Aon and Steel City Re develop credible research linking corporate reputation to a company’s market valuation and use these insights to to sell sophisticated reputation risk management products.
The risk insurance premiums would be better spent on a little more strategic corporate communication. ‘Communications that strengthen reputation are far more valuable than is recognised. We can make companies worth hundreds of millions more simply by making them better understood,’ according to the Oxford Metrica/Aon 2012 Reputation Review.
After two decades in the media and communications, I’ve seen far too many executives take what they believe to be the safe communication route. Safety is a double-edged sword. Compliance is not communicating and if you are to believe OM/Aon, it’s not a cliche to say that a missed communication opportunity is a missed business opportunity.
To appreciate just how much communication style shapes reputation, stakeholder confidence and valuation, look to Jamie Dimon, CEO of J.P. Morgan Chase (NYSE:JMP), and Brian Moynihan, CEO of Bank of America (NYSE:BAC).
Dimon is candid, confident and can be combative. He played a pivotal role in Washington during the darkest moments of the financial crisis, but even Dimon was not immune to crisis at J.P. Morgan. A $6 billion trading loss last year could have destroyed his public reputation. A lengthy feature story written by Bethany McLean for the November issue of Vanity Fair quotes Bill Daley, who sums up why Dimon’s reputation is still intact: “I have not seen a C.E.O. ever handle a crisis so effectively … Jamie didn’t let a cover-up become worse than the crime.”
By contrast, Bank of America’s Moynihan is on everyone’s list of worst corporate communicators. He thoroughly underestimated his customers and how they would respond to a new $5 monthly ATM fee, explaining it as “… the bank’s right to earn a profit.” Moynihan appears short on emotional intelligence, which may be why he gets few kudos for keeping BofA afloat under the complex circumstances that he inherited. Meanwhile, the drumbeat for his job is growing louder.
An article in American Banker defines the difference between these two CEOs: “The Jamie Dimons … of the world, there’s very few of them …. you want to go into battle with [them]. … I don’t think you’re going to go into battle with a Brian Moynihan.”
No executive can communicate his way out of poor performance and the best — like Jamie Dimon — don’t even try. The larger point is who would you follow into battle? Comparing the stock price performance of both companies over the last three years isn’t final proof, but is one indicator of leadership and reputation: JPM’s three year total return is up more than 25 percent. BAC’s three year total return is down more than 20 percent.
Consider this thought from the Oxford Metrica/Aon 2012 Reputation Review: ‘We can make companies worth hundreds of millions more simply by making them better understood. And in these troubled times, that is a pretty good return on investment.’ High caliber communications skill is a core competency for a modern CEO and for any executive within a few levels of the C-suite. The best communicators are not big talkers, they are students of the human condition. They get what makes people tick and can craft a clear and simple narrative that is meaningful to their audience. They choose their words carefully, looking for a metaphor or a turn of phrase that makes their stories memorable – and repeatable.
Disclaimer: I do not have a business, financial or client relationship with any of the companies in this post.
This article was written By Bess Gallanis, corporate communications consultant and executive coach to high performing companies and their leaders. When the stakes are high, communication performance is a game changer or a deal breaker. To gain a competitive advantage, contact Bess today.