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6 Main Components Of The CEO Brand

I had an opportunity to contribute a chapter to the new book CEO Branding: Theory and Practice, which was put together by Marc Fetscherin, associate professor of international business and marketing at Rollins College.

He spoke to a number of experts in branding and PR, as well as academic professionals to talk about CEO branding.

I had an opportunity to talk with him about his key findings, and here are six main components to keep in mind:

1. CEO personifies the company

In today’s social media landscape, managing the image and reputation of the CEO is more important than ever before for companies. The CEO personifies the company and this is why and where CEO branding comes into play. According to studies by Burson-Marsteller, CEO reputation represents almost half of the company’s reputation.

2. The CEO brand can elevate or tank you

This is good and bad news for companies. The good news is that if it’s well planned, executed and measured, it can have a profound positive impact on company financial performance and reputation. Steve JobsRichard Branson or Oprah Winfrey illustrate this.

Here comes the bad news. If the image or reputation of a CEO is negative, this can backfire to companies. A recent example is Mike Jeffries of Abercrombie & Fitch. To put this into perspective, his resignation was followed by about an 8 percent jump of the share, according to Bloomberg. The same thing happened when Daniel Vasella, CEO and chairman of Novartis, resigned. Shares jumped about 2 percent when he left the CEO role, and jumped again when he stopped as chairman. This can be attributed as the "CEO premium" to the stock price.

3. CEO performance is key

Obviously, an important aspect is the CEO’s financial performance, such as profits or performance such as market share or stock price. However, CEO performance also includes other aspects, such as how well the CEO motivates and energizes the organization, how effectively the CEO executes company strategy, or how well the CEO plans his succession.

4. Be aware of CEO’s personality

On one hand, certain personality traits such as honesty and humility result in mainly positive interpersonal relationships and company outcomes. A CEO considered to be sincere, loyal, faithful, honest, charismatic or modest is not only more liked by employees, but also seems have a more positive media image. However, there are some personality traits such as Machiavellianism or narcissism that are mostly related to negative company outcomes.

5. Building your prestige

In general, a positive or negative reputation does influence company reputation. I found that first-time, award-winning CEOs positively impact companies, but multi-award-winning CEOs mostly underperform, both relative to their prior performance and relative to a matched sample of non-winning CEOs. This is mostly attributed to the fact that many of those CEOs spend excessive time on public and private activities outside their companies.

6. The CEO as a person

This relates to a CEO’s education and CEO appearance. For example, almost 70 percent of CEOs have an M.B.A. or other graduate-level degree. Looking at the Fortune 500 companies, many CEOs have studied at well-known universities such as Harvard, Stanford, University of Pennsylvania or Columbia. Research in psychology shows us that people with an attractive image are usually perceived as more intelligent and more socially competent.

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