Bob Lutz, vice chairman of General Motors, enjoyed his recent tour of dealers and auto shows in central Europe, where conversations with industry peers, sales reps and even Vienna’s showbiz elite gave him the opportunity to ‘debunk the myth’ that the automobile giant is on the skids.
Bob Langert, senior director for corporate social responsibility at McDonald’s, is pleased that so many of the chain’s meat suppliers are reducing their use of antibiotics. And Anne Stanton, president of a tiny technology consultancy, the Norwich Group, was feeling wistful on a recent weekend because she had to stay at her desk while her family was out enjoying the beautiful Vermont weather.
It’s easier than ever to know what’s on the minds of corporate leaders, because so many of them have begun blogging – and more will soon follow, driven by a gradual embrace of technology that will allow them to communicate directly with investors, customers, suppliers and employees.
Seven percent of the top executive officers of the largest US companies have already begun to post their thoughts on the internet, and 19 percent are highly disposed to start blogging, according to a recent Burson-Marsteller/PR Week poll. Some of the biggest names in industry post their thoughts several times a month for anyone to read. As with any blog, the subjects and tone vary with the executive, from the breezy boosterism of AOL’s Ted Leonsis to the geek-speak of Microsoft and Sun Microsystems.
The best blogs, say the experts, are the ones that are intrinsically part of the company’s communications strategy but are clearly written in the voice of the author. That means short postings, probably at least once a week, in which the executive muses about the company, industry or issues that are somehow relevant. Done properly, a blog allows readers to better understand the business, get a feel for the management team, or learn about a product.
Just as importantly, blogs provide an easy avenue for customers and others to communicate with the company – a delicate issue that can be decisively turned to the company’s advantage. ‘Corporate blogs are great if they get lots of feedback,’ says Leslie Gaines-Ross, who as knowledge director for Burson-Marsteller advises CEOs on information sharing and the internet. ‘It’s like having many, many focus groups, and you can get a lot of people responding at once.’
An official blog is not likely to be the IRO’s responsibility, but it is important that the investor relations department – or legal, or public relations – establish guidelines about what information is not acceptable on the site. The IRO will probably not ghost the boss’s blog, but if the subject involves stock activity, raising money or issues investors have been asking about, the department should certainly vet it, experts say.
Pretty much anything
Back in 1997 the first online journals appeared under the moniker ‘web log’, which playfully became ‘we blog’ and subsequently wound up simply as blog, both noun and verb. At its most primitive, a blog is a series of chronological entries about pretty much anything, often lavishly strewn with links to other spots on the web. A blog usually allows readers to post comments, although an administrator can vet what is actually put onto the site. But perhaps the most important thing to know about blogs is that before long, your chief executive will have to have one.
‘The CEO blog will become more mainstream by 2010 or 2012,’ says Gaines-Ross, an architect of the Burson- Marsteller/PR Week poll of CEOs. ‘The blog will be the new e-mail address,’ she continues, adding that the form’s easy mix of immediacy, informality and directness makes it an important communications tool.
Communications and legal experts stress that, despite the seeming informality of a blog, it is a form of corporate communication and is therefore subject to libel, privacy, copyright, trade secrets and Reg FD restrictions.
‘I always caution people that with all communications, from a newspaper advertisement to an employee-only blog, none of the rules change,’ says Paul Arne, co-chair of the technology, privacy and security groups at Atlanta law firm Morris, Manning & Martin. ‘Anything you worry about on the web site, you need to worry about with all your communications.’
But the informality of blogs is also their power. The blogosphere – once the undisputed home of sexual boasting, trivia sharing and political ranting – is a surprisingly receptive avenue for CEOs and boards of directors to communicate about whatever’s on their minds or crossing their desks. Blogs allow executives to communicate directly and immediately, bypassing the media to respond to news or current concerns.
Blogs don’t need the gravity of the annual report’s preface, and they aren’t the carefully worded messages that come from investor roundtables and newsletters. Because they are conversational, blogs should breathe – but they should not be an unedited, highly personal stream-of-consciousness diatribe. Even when the exec himself writes the entries, the odds are good that someone in legal, IR and/or PR has sifted through them for questionable content. So if Lutz is reveling in the beauty of the new Saturn, well, what did you expect – Dennis Koslowsky’s shopping adventures? Blogs shouldn’t take that much time to craft – a quality that 50 percent of the CEOs in Burson-Marsteller’s poll don’t seem to appreciate, because the time it takes to produce a blog was cited as their primary reason for not starting one.
Scouring the blogosphere
It’s always hard to know how many analysts or fund managers are scouring the blogosphere looking for insight, but there’s plenty out there for the harvesting. ‘The value of these blogs is self-evident,’ says Arne. ‘I would think that anything directly from the mouth of a CEO of a publicly traded company would be of interest to investors. Any analyst worth his or her salt will listen to what a senior executive says, even if it’s not breaking news.’
Arne also notes that some companies have blogs from different departments that can offer some insight into product development, business glitches, customer satisfaction and other indicators that affect the business and eventually the share price.
But Gaines-Ross, who advises CEOs and clients on information sharing and leadership, disagrees. ‘I can’t imagine anyone would think it’s a good thing for the CEO to spend his time blogging,’ she asserts. ‘He should be out talking to customers and attending meetings.’
One exception, Gaines-Ross says, would be a blog from a chief executive involved in a turnaround or restructuring, as his or her thoughts and insights during that period would be very enlightening to investors. Experts caution against allowing a blog to burnish the image of the ‘celebrity CEO’, making the argument that no one benefits from having an executive who is more famous than his or her company.
Honest feedback
One undisputed benefit of the blog is the immediate and honest feedback it provides. Not only do readers have an easy way to respond to anything they see on a blog, but your company can also measure traffic on the site – and whether it spikes around the times earnings are released, or on a day of big industry news.
But this element of feedback is the thing that unnerves many IROs and CEOs the most. If people rant, criticize or complain, they say, it won’t reflect well on the company or the executive. This isn’t necessarily true, however. Experts like Charlene Li, a technology consultant with Forrester Research of Boston, say it’s better to address legitimate criticism or issues openly. It’s preferable to have someone complain to you than to have them complain about you in a forum where you can’t respond, she says.
Experts also suggest monitoring other blogs and web sites for mentions of your company or industry. A number of blog-specific search engines have sprung up to make it easier, including Bloglines, BlogPulse and PubSub. Some of these allow limited searches for free, while others will set up custom programs to help you stay on top of your brand in the blogosphere. One site, Technorati, pretty much does it all.
Look out for blogs by hedge funds and sell-side analysts who write about the industries and companies they follow. Read them carefully, but don’t expect much. Among the less scrupulous, a negative mention might be the work of a short-seller. The more ingenuous might be trying to shake loose rumors or information that will be used more selectively. But if others are reading these blogs, you’ll want to know what they say.
While you’re at it, try to keep abreast of sites or blogs used by shareholder activists.
A cautionary tale
Some companies are forgoing the public blogosphere for private, internal discussions. For example, a CEO blog can be a strong communications tool for the corner office to stay in touch with a far-flung workforce. But remember, even if it’s password protected, what is said on the internal blog is not likely to stay there. Today, everything that is electronically sent out or dialed in is easily disseminated by a few clicks of the mouse. Consider the cautionary tale of Lee Scott, Wal-Mart’s CEO, whose peevish employee-only blog was so filled with contempt for managers and labor unions that it was reported on the front page of the New York Times business section earlier this year. If you’re trying to get your CEO’s blog noticed, make sure it’s in a good way.
There are something like 70,000 new blogs launched on the internet every day – a lot of clutter for anyone to weed through, regardless of how interested they are in what your corporate leaders have to say. Experts suggest linking to other blogs and dropping names that would be of interest to your target audience. Reference any blogs on your corporate web site, and consider pushing the blog to interested readers via e-mail or other means.
Above all, make sure your blog is worth finding. If your CEO can’t come up with enough interesting things to say or articles to link to, find someone else in the company who can keep the conversation going.
