Thursday, December 27, 2001

CEOs damage their corporate brands

CEOs damage their corporate brands ::: The headline at for this article was certainly catchy: Fiorina mars HP’s image. The article goes on to summarize a report which is available here. The report claims to correlate CEO performance with company brand. (Note: this links to a zip file, which contains a 1.3MB PDF file.)

The problem? The results are useless, the information in the report is at times misleading (and even outright wrong), and the conclusions are porous, to say the least.

Let’s see: from the report, we learn that Microsoft CEO Bill Gates most personifies his company’s brand. He is also among the top 3 most damaging to his company’s brand. Microsoft is #1 in companies who maintained their brand (and #6 in companies who did the worst job at maintaining brand value).
Of course, there’s that little issue of him not being the CEO for the past two years; that’s Steve Ballmer’s job. Or that Microsoft’s market capitalization grew by more than 40% this year (outperforming every major stock index), that it has put together four straight $6b quarters, or that Microsoft is the #2 worldwide “brand” according to Business Week’s latest survey.

There’s more in the Liquid Agency report, but it’s more of the same. It reads like a personality test of the Valley CEOs (predictably, nobody likes Larry Ellison either), and arm-chair opinions about whether HP or Compaq will get hitched. Ultimately, the survey reflects polarized opinion in the industry about who’s doing a good job – yet it fails to deliver any useful information that would persuade anyone to change their minds. (Do I care that some people think Microsoft did a great job maintaining its brand value, while others think it’s among the top 10 in damaging its value? Not nearly as much as I’d be interested in seeing a survey of Microsoft customers who could assess the value of the brand to them.)

This survey could have represented a great addition to the thinking on the impact a CEO has on the company’s performance. Instead, it lacks any scientific basis for drawing conclusions, gets its facts wrong, and fails to establish any link between CEO performance and brand value.

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