Reputation Notebook

Aon's CEO Offers Thoughts on Risk

I attended a breakfast event this week featuring Greg Case, CEO of Aon Corporation.   Case assumed the CEO position from Chicago corporate icon Patrick Ryan, joining just over a year ago from McKinsey & Company.

His remarks were far from the usual CEO patter and chest thumping that most executives deliver at these events.    He provided the requisite background on Aon and acknowledged his role as a new CEO, but then quickly moved into a discussion of risk.   Case asked the audience to consider risk in a different way, not just as protection against the downside, but also as a driver of opportunity, expansion and innovation. 

Case reportedly talks with an average of 100 clients per month and he used those conversations as background for "six things these constituents want you to know about risk."   They included:

1. Misunderstanding risk can be fatal.  McKinsey found that the impact of rick is 10x the actual event.
2. The magnitude of risk is increasing and the impact is exponentially larger.
3. Complexity around risk is increasing.  Pandemics, catastrophes, supply chain --all are more complicated.
4. Scrutiny is intensifying.  Risk management is no longer in the corner; it's front and center.
5. Risk ideas are three parts opportunity, one part downside.
6. Risk has to be attacked.  If you wait, you're too late.  Your company needs a view on risk.

For communicators, even without hard assets to protest, these risk comments are profound and instructive.  For our communications programs, we need to look at risks to reputation as an opportunity to attack the problem or issue head on.   We should not wait for trouble, but should instead see the risks we face as opportunities for growth or expansion.   On an individual level, there is an appeal to take more risks; on an organizational level, we need to create cultures that consider risk, embrace it and shape our responses into opportunities.

A Note on Encouragement

As part of my 2006 New Year's resolutions, I committed to participating in a 5K run for the first time, specifically the Fall Colors 5K sponsored by the local Morton Arboretum.  It's a beautiful place and one that I visit very often.  I'm fond of it because it doesn't take long to head down one of the paths and find a solitary spot -- no cell phones, no Blackberries, just quiet.   Today I completed the race -- admittedly walking some parts, since it's a hilly course -- and felt a huge sense of accomplishment with every step, and of course, at the end.  It wasn't the distance of the run that affected me, since it's certainly not much compared to the much-longer races my office colleagues routinely breeze through, but instead I felt this profound satisfaction that I had set a goal that I had never tackled before and conquered it.   I wasn't alone in this respect.  All around me I noticed how encouraging every one was to friends and strangers alike, and it made me think about how great it would be if that same camaraderie and mutual respect for achievements could find its way into other parts of our lives, including the work place.    Too often we tend to focus on the client's goals, the boss' goals, and what it's all supposed to mean "at the end of the day, " but imagine what it would feel like to encourage -- and be encouraged by -- your peers and co-workers. 

Failure to Face Reality: The Three Fallacies of Mass Market Thinking

One of my favorite survey findings came from a report on "Why the CEO Got Fired," which appeared in the summer of 2005.  One of the major reasons was titled "Failure to Face Reality."   Recently I attended a meeting in which the folks on the other side of the table seemingly had no regard for their company's massive contributions to the global warming crisis.  In fact, their proposed actions alone would dramatically increase the country's carbon dioxide emissions.  Somehow they believed that these emissions would be contained to the local areas and would not impact the rest of society. 

Beyond that line of thinking, call it the "containment theory," they seemed to fall into what I call the three "fallacies of  mass market thinking": that the average person does not care about big issues like global warming; that the average person doesn't understand the details; and that what the average person can't see doesn't make a difference to them.

There is a major shift underway and corporate executives need to wake up to it.  When Tom Brokaw does a TWO-HOUR special on global warming and a major network devotes TWO HOURS of prime time to it, that's worth attention.  When the program content is not alarmist or provocative, but instead balanced and educational, that's worth notice.  And when that program is the discussion of dinner parties, school meetings, at the office coffee pot and at the back of the bus, it's worth action.

The average person does care and they're only steps away from doing something about it.  Their voices are going to get louder.  Corporate executives had better start listening and learn to face reality.   It's the foundation of a civil society.

Seeing Stars ... Vanish

Years ago, the "War for Talent" was spotlighted in a McKinsey study warned of a shrinking management pool due to the retirement of the Baby Boomers. Current managers were advised to improve incentives, increase training and think globally about recruiting. But as concerned as we're supposed to be about managers, I admit to being equally concerned about the middle. How do we keep the middle ranks strong, engaged, challenged and well compensated in a world that is increasingly impatient, that does not value loyalty, that admires the shortcut, that shuns long-term investment and that will jump at the next offer? The middle tier is the next generation of leaders, but rare is the individual in this group that wants the responsibilities as much as the rewards. They want "more," but can't describe what this means. They're at sea, but so are their managers.

In recent weeks I've seen two very promising young leaders leave the firm for nothing more than a "different" experience. Asking periodic career coaching questions didn't unlock the need for new challenges. Instead, it was just "time for something else.". How do we as managers get these stars to see that the "something else" they seek is right in front of them? The chance to take risks and innovate is right there!
We've got to find a way to encourage new thinking about the job, helping these promising future leaders to see that they have to power to shape their position into something that makes a difference for the firm -- and themselves.

Mblogging

On the road, another Midwestern hot spot just 52 minutes by air ...and yet somehow the trip takes four hours. Won't someone consider high speed rail???

One Step Back for B2B Brands? It's Time for Total Cost of the Relationship

I'm surprised by Ellis Booker's editorial in the July 10 B-to-B Magazine, which suggests that the golden days of big corporate brands are over.   He admits that some big brands are advocating a broad position -- like GE with its "Ecomagination" platform -- but observes that few other companies are daring to assert their corporate brand.   Booker should know better and take a lesson from business author Jim Collins: Avoid the "tyranny of the OR" and "embrace the genius of the AND."  The best companies have a symbiotic relationship between the corporate brand AND those of their products.  For far too long, executives have put business-to-business marketing in a corner, insisting that the discipline only applies to moving products.   That dynamic has changed.  Today, companies that buy from other companies consider much more than price-performance.  They evaluate their global buying policies, social responsibility, ethics and service track record.  Business-to-business marketers traditionally have focused on selling the Total Cost of Ownership to purchasing managers in an attempt to highlight added value.  It's time to move to the next step: The Total Cost of the Relationship.  That's the domain of the corporate brand and it's more important than ever.

Why I love Rocketboom

Sure, I'm late to the party, but thanks to my video iPod, I'm finally able to watch Amanda Congdon deliver the news of the Net culture.  I caught up on the most recent week's worth of posts -- including Rocketboom's appeal for Net Neutrality.  The image of the big telcos (black boot) squashing the little guy (clay figure) has got to be a classic.  Remember Mr. Bill from the old Saturday Night Live skits?  Hilarious.

Just as rich: a user submitted short film on two guys in Nairobi, Kenya, reselling mobile services to the masses from wheelchairs they roll around the city. 

Rocketboom's now a new favorite.  It's not slick or over-produced -- and maybe that's the appeal.   It seems authentic, at a time when "authentic" is the new currency.   

Calibrating Expectations

I'm listening to the podcast Motivation to Move -- it's one of the first podcasts dedicated to health and fitness -- and the host Scott Smith cites this great quote from uber-motivator Tony Robbins:

"Most people overestimate what they can accomplish in a day and underestimate what they can do in a decade."

Can You See the Real Me? Using Personality Profiles to Manage Staff

In one of those not-so-uncommon moments for me when rock and roll collides with the practice of management, I was  reminded this week of The Who song "The Real Me" and its refrain "Can you see the real me? Can you, can you?"    We've begun deploying a personality questionnaire as part of the hiring process and I admit, I'm reluctant to buy into its value.   I'm no big fan of the standardized categorization of people, although I admittedly can see its promise in the workplace for forecasting team fit or shaping career development plans.   Should I have this data so early in the relationship with a new employee -- or have time to form my own opinions?

I've participated in the Blanchard Situational Leadership program, which I felt was good for a mid-level manager who deals with task-driven subordinates.  Later , the Myers Briggs process offered us insights into our own behavioral tendencies and those of our colleagues -- if only we were willing to be branded with our four-letter designations.  Most recently, our management team used a tool I found to be a better -- the Management Research Group's Leadership Effectiveness Analysis.   It provided 360-degree feedback opportunities, plus the chance to get personal insights that could be matched against the team's central mission. 

If these tools can be used for mentorship, they serve a good purpose.  But if all they do is categorize people into pre-determined slots, I have to wonder how they help the employee -- or the manager.

Home Depot has Service Trouble at the Front Lines

BusinessWeek's March 6 cover story on Home Depot's Bob Nardelli was a management curiosity.   The article -- and the companion "Behind the Cover" weekly podcast -- spotlighted Nardelli's penchant for employing former military personnel and using military concepts to drive the store staff, called "the troops," on a mission for greater retail glory.   At a time when managers are encouraged to soften their rhetoric (no one has employees or workers anymore, since everyone is now an associate or teammate), become more sensitive and embrace political correctness, Nardelli is unapologetic for using armed forces references and analogies during a time of national conflict.   You can make the case that Nardelli has found a management style that works for him at Home Depot, as it did at GE.   You could also explore the merits of hiring a workforce that responds well to a command/control style and how this fits into a large distributed organization with most of its workers far from headquarters.  But is this approach working for the company?  Is it making Home Depot better and more competitive?

The letters to the editor suggest trouble in the field.  BusinessWeek's March 27 Readers Report cites a "deluge of responses -- nearly 300 in all" that lash out at the firm for deficient customer service.   According to BW, only two of the correspondents were supportive of the chain. 

Nardelli's army is attacking costs and efficiencies, but it's losing the battle for customer preference and loyalty.  The disconnect between the brand promise and actual performance seems to be widening.  In the age of customer activism -- since when do 300 people respond to a single BusinessWeek article? -- the company should be trying to win loyalty, not just beat the competition.