Logos team blog posts

This is the eighth in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

See my earlier posts:

In this blog Yinnan Shen summarizes her capstone on the best blend of charisma and humility to assure success in American presidential politics.

As she shares in her introduction, Yinnan, who did her undergraduate work at Beijing Language and Culture University, came to the United States with an idealized view of American politics. The last presidential election was the first she saw up close.  She chose her capstone topic not only to make sense of this election, but also as an opportunity to dive deeply into American history, politics, and culture in the past 60 years.

While both charisma and humility have been studied extensively, there is very little study of the combination of the two, especially in politics. Her contribution is a good start on a topic that is ripe for continued study: how to balance the seemingly contradictory personality qualities of charisma and humility.

You can download her capstone here.

This week Yinnan starts work as a research analyst at Logos Consulting Group.

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Charisma And Humility in Political Leadership

by Yinnan Shen

Yinnan Shen

2016 was a very interesting year for me, a foreigner who has a keen curiosity about American politics, to experience living in the States. I mean the presidential election part.

I arrived assuming that people are all rational, that there should be a rigorous system with a rigorous standard for choosing the president. That voters rationally assess each candidate referring to that standard, checking boxes, to pick the best candidate to become their president. But sorry Adam Smith; we humans don’t actually make rational choices.

Furthermore, the gap between reality and perception also gets in the way of making rational judgments.

That’s why charisma and humility comes into play in political leadership election and retention. Self-identification and emotion are two key drivers of followers in determining whom to vote for. And charisma and humility appeal directly to followers’ self-identification and emotion, affect their decision-making process unconsciously.

Also, charisma and humility are complementary in assessing a political leader. Humility can prevent charismatic leaders from being egocentric, arrogant, or corrupted.

My capstone therefore takes a deep dive into political leaders’ charisma and humility, and their correlation with political election and retention in the United States of America.

The methodology of this research is simple; build the measurements of humility and charisma first, and apply the measurements on candidates of historical presidential election cycles to find the correlations.

Measurements of Charisma and Humility

In the first part of my capstone, I studied theories on defining and measuring charisma and humility in the history, and then defined the two characteristics and identified key components of them based on past research and my own understanding. I developed a 10-item scale of charisma and a 5-item scale of humility.

Charisma definition: a set of extraordinary qualities and behaviors that inspire admiration, loyalty, and devotion among people, and that naturally separate the individual who possess these qualities from average people.

Charisma measurement:

Leader’s behavior and attributes:

  1. An idealized and even prophetic vision. Having a captivating vision that projects an idealized future for the followers is the foremost characteristic of charismatic leaders. The vision that he or she proposes is most likely to be a challenge to the status quo, a promise to change what has been done wrong in the past to actually excite follower’s trust, sense of belonging, and sense of mission.
  2. Articulation. The articulation of the vision is the key to help the vision reach the 
audience. Charismatic leaders are usually seen to be eloquent and persuasive – to be the masters of communications. Additionally, their tone of voice is always found to be captivating and engaging.
  3. Sensitivity to the environment. Charismatic leaders are most likely to rise from chaos or crisis. They tend to catch subtle trends and patterns of the world around us, which enables them to seize and even create opportunities before anyone else even notices. And this is the birth of their visions.
  4. High empathy. To arouse trust and self-identification with the collective, charismatic leaders are able to empathize with each individual’s needs and emotions, which usually results from their genuine interest in people. Charismatic leadership is actually more intuitive and sensitive than other types of leadership.
  5. Bold and unconventional strategies and tactics to achieve the vision. Charismatic leaders’ visions are convincing only when they go hand-in-hand with revolutionary strategies and tactics in the process of vision implementation.
  6. Willingness to take risks. Leaders are usually perceived as charismatic when they show their willingness to take great risks in making choices. The risk can be personal, or it could be a collective risk that helps achieve a greater good or a collective goal. The charismatic leader stands out when no one else is able to make these “scary choices.”
  7. Confidence in him or herself, as well as in followers. Charismatic leaders usually have high self-esteem, but more importantly, in order to arouse followers’ loyalty and devotion, they also have belief /faith in their followers.  They let followers feel well-involved in reaching the collective goal.
  8. A strong will. A strong will is a necessity for charismatic leaders. They usually have an inexorable will to do what they set mind to. And their drive and persistence can have such a strong influence over followers, and make the followers believe that they will definitely achieve their goals.
  9. High level of trust from followers. Followers trust no matter what the leader proposes or says, and have no doubt in the leader’s abilities to reach the desired vision.
  10. Considered a role model by followers. Charismatic leaders are always perceived as a role model who is everything the followers want to be. They are even idolized sometimes, as if they possess some heroic virtues or divine gifts. The followers also highly identify themselves with the leader. It’s a more personal reaction, usually as a consequence of deep connection, trust, and admiration.

 

Humility definition: a virtue allowing people to have an accurate self-assessment and think less of themselves.

Humility measurement:

  1. Openness. Usually perceived as approachable and able to relate with others, people with humility have the candor to tell the truth, to offer transparency, to open up room for people to get close to them.
  2. Tolerance and forgiveness. An individual with humility is able to listen to contradictory opinions, accept honest advice, appreciate difference, and is open to new ideas. Humility also requires one to not hold too much of a grudge against others, and humble leaders tend to be more understanding than others.
  3. An accurate self-assessment. They usually have an accurate assessment of themselves, including their abilities, strength, and accomplishment. An accurate self-assessment also means that they are able to recognize their mistakes and take responsibility accordingly.
  4. Self-forgetfulness. To have humility, one ought to view him or herself less importantly, which mean they value other people’s inputs, and even put other people’s interests before their own.
  5. Highly secure. Contrary to common knowledge, people with humility actually have high self-esteem and sense of security. They assess themselves and the world precisely, so that other people’s thoughts are less likely to get in the way of making their own choices and their self-assessment. They are also secure enough to show vulnerability, and less likely to exhibit caution and anxiety.

Application on Historical Presidential Election Cycles

In the second part, I studied candidates’ biographies, news reports, opinion polls, speeches, and interviews of the designated political leaders (both the one who won and the one who lost in their respective election cycle). I also conducted in-depth interviews with people who had exclusive insights about those candidates’ personalities,

I applied the measurements on both elected and non-elected candidates in each cycle to grade each candidate’s charisma and humility. For each charisma or humility attribute a candidate exhibited I awarded one point in that respective category.  The results are below, in which the darker colored rows represent the winning candidates.

Conclusions and Guidance on Political Leadership

Using the research results, I drew the four graphs, one per election studied. I took each candidate’s charisma score (x) and humility (y) as this candidate’s coordinate (x, y), and marked it on the corresponding graph. Red dots represent winning candidates and blue dots represent losing candidates.

The blue quarter circle shaded areas were drawn using the radius that equals  the distance from the blue dot to the origin. If we use the linear distance between each dot and the origin, the distance represented by z as a representation of this candidate’s overall performance of charisma and humility, then the blue shaded area means the overall performance of charisma and humility that is less/equal to the losing candidate.

No matter how the x and y varies in each election cycle, the red dots always fall out of the blue shaded areas. That being said, the z value, named as C-H Value, of the winning candidate is always greater than the z value of the losing candidate.

The model implies that political leaders who have a better overall performance of charisma and humility gain more support in political election. It can be applied on any given political candidate, in conjunction with the measurements the capstone created to calculate a candidate’s charisma and humility scores. As long as we have a certain candidate’s charisma score (x) and humility score (y), we’ll be able to calculate his or her C-H Value and compare it to his or her rival’s, in order to have a better understanding of the election result. The model facilitates the interpretation of past election results and helps predict future elections.

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Carolina Perez Sanz, recipient of the 2017 Rising Leader Award from the Logos Institute for Crisis Management & Executive Leadership

 

On Thursday May 18th, Logos Institute for Crisis Management & Executive Leadership hosted one of two inaugural awards ceremonies honoring distinguished leaders in the strategic communication field, consisting of the Rising Leader Award and Outstanding Leader Award.

Carolina Perez Sanz was the 2017 recipient of the Rising Leader Award, with the Outstanding Leader Award ceremony still to come in Fall 2017.

The Rising Leader Award honors new professionals, recent graduates, and students for their extraordinary leadership potential and demonstration of excellence in their work that offers meaningful contributions to the strategic communication profession.

The Outstanding Leader Award honors established industry professionals for their consequential professional achievements that set the aspirational standard for others. The award also recognizes the recipient’s excellence in use of strategic communication to achieve professional or business objectives with substantial and positive results.

Carolina recently graduated from the M.S. program in public relations and corporate communications from New York University’s School of Professional Studies, where she wrote her final capstone on how women in male-dominated professions can become leaders and inspire trust more effectively.

Carolina also completed a PhD in applied linguistics at Instituto Universitario de Investigación Ortega y Gasset in Spain. For her PhD, she did extensive research into how female broadcasters use their voices when performing on the air. She is also a certified speech therapist, and writes her own blog, Power at Speech, that focuses on how voice and speech influence the perception of public figures’ personalities. Carolina is currently an  adjunct assistant professor at the Borough of Manhattan Community College, where she teaches public speaking.

Please join Logos Institute in congratulating Carolina Perez Sanz for being 2017’s Rising Leader Award recipient! The award presentation was streamed on Facebook Live. To view the archived video, click here.

Stay tuned for further announcements for the Fall 2017 Outstanding Leader Award ceremony.

On Thursday May 18th, Logos Institute for Crisis Management & Executive Leadership opened its doors to gather in celebration of the Class of 2017, and in recognition of academic achievements over the past year. It was Logos Institute’s third year hosting the open house, which this year welcomed approximately 150 guests including graduates and their families, alumni, faculty and friends of the academic community.

Much of the celebration was in honor of students earning their Master of Science degree in public relations and corporate communications (PRCC) from New York University’s School of Professional Studies, Division of Programs in Business. Several Logos Institute team members are on the faculty or  have lectured, advised, and taught in the PRCC program.

This past academic year, Helio Fred Garcia taught three sections of an advanced elective on crisis communication. For the third consecutive year Kristin Johnson taught two sections of an elective course, PR Consulting, to prepare students for the demands and responsibilities associated with working for or as a partner to PR agencies. Additionally, Adam Tiouririne, Iris Wenting Xue and Holly Helstrom guest lectured in several classes.

Helio Fred Garcia and Kristin Johnson (r-l)

Kristin Johnson and Helio Fred Garcia

Garcia, Johnson, and Xue advised 11 students on the development and completion of their capstone papers, which is the PRCC program’s final original, researched thesis project. The total advisor commitment required more than 2,000 pages of copy review and more than 100 hours of counsel from Logos team members, demonstrating Logos Institute’s commitment to nurturing contributions to the research and practice of public relations and effective communication. Logos will feature graduate authors and their capstone research in upcoming guest blog posts.

View from the platform: Garcia and Johnson supported graduates at the School of Professional Studies Convocation as part of the faculty platform party at Radio City Music Hall.

View from the platform: Garcia and Johnson supported graduates at the School of Professional Studies Convocation as part of the faculty platform party at Radio City Music Hall.

Long-standing Relationship with NYU

Logos Institute team members teach at many academic institutions and for many corporate clients, in different capacities. However, Logos has a special relationship with New York University dating back to 1988, when Helio Fred Garcia, Executive Director of Logos Institute, first joined the NYU faculty in NYU’s Stern School of professional studies, where he still teaches today. For the past 15 years he has also been an adjunct professor of management in NYU’s Stern School of Business Executive MBA program, where he teaches an elective in crisis management and where in 2016 he was designated Executive MBA Great Professor.

The PRCC program at NYU was co-founded in 2005 by Helio Fred Garcia, and John Doorley, now a Visiting Associate Professor at Elon University. Garcia has taught consecutive semesters since the program’s inception. He received the Dean’s award for teaching excellence this year, an honor also bestowed to him in 1990.

Thursday, May 18th from 3 p.m. – 7 p.m., Logos Institute for Crisis Management and Executive Leadership is hosting an open house for all class of 2017 graduates, friends and family, and members of the academic community. We ask all our guests to please kindly RSVP.

Additionally, Logos will honor Carolina Perez Sanz with Logos Institute’s Rising Leader Award. This is the Institute’s inaugural year presenting this award, which recognizes students, recent graduates, and new professionals in the strategic communication field for their extraordinary leadership potential.

Logos Institute for Crisis Management and Executive Leadership research fellow Holly Helstrom presented a case study on mental readiness and navigating business challenges to students in New York University’s MS in Public Relations and Corporate Communication program. Ms. Helstrom spoke on April 29, 2017 in an advanced elective on crisis communication taught by Logos Institute executive director Helio Fred Garcia.

This seven-Saturday elective course focuses in part on the predictable patterns of poor decision-making business leaders often follow during crises, and how this is commonly the result of leaders’ critical loss of perspective.

Holly Helstrom guest lecturing at NyU

Holly Helstrom guest lecturing at NYU

Ms. Helstrom demonstrated to the students that when leaders and their organizations regularly practice mental readiness — the persistent ability to remain calm, think clearly, and maintain situational awareness — it allows them to avoid or manage through crises successfully, and achieve enduring success.

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The focus of Ms. Helstrom’s case study was Pixar Animation Studios, one of the most successful film studios in the industry’s history. She provided an in-depth look at how Pixar’s leaders’ commitment to including the disciplines of mental readiness into everyday business operations has allowed the studio to routinely produce number one films and navigate business challenges successfully.

Ms. Helstrom highlighted some of Pixar’s processes that integrate the disciplines of mental readiness, then illustrated how these processes helped the studio in overcoming one of the most complex and challenging crises a business can face: a corporate merger with Disney.

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Ms. Helstrom joined the Logos Institute for Crisis Management and Executive Leadership as a research fellow in 2016. She is lead curator for the institute’s intellectual capital materials, researching and preparing in-depth case studies that bring to life the principles and best practices that comprise Logos Institute’s curriculum.

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Prior to working at Logos, Ms. Helstrom worked in the Metropolitan Museum of Art’s public relations department. In 2015 she graduated from New York University with a B.A. in art history. Her senior research paper focused on the strategic use of art exhibits in post-war Germany as part of the country’s broader public relations campaign to refurbish its reputation on the international platform, and reunite the war-torn German population.

The Trump administration’s January 27th executive order banning refugees and certain legal immigrants from entering the United States galvanized businesses into action. Companies immediately affected by the ban, like airlines, scrambled to manage the impact on their customers. U.S.-based companies with global operations and diverse workforces, like Coca-Cola, Ford, Goldman Sachs, Google and Nike made forceful public statements opposing the ban. Technology and media companies expressed concern for their employees and operations. Starbucks announced plans to hire 10,000 refugees. Companies like Amazon and Microsoft joined the State of Washington’s successful lawsuit challenging the legality of the immigration ban. Apple and more than 125 other companies signed a brief defending the nationwide restraining order. Even companies that have not addressed the impact of the ban publicly are managing its fallout. From assisting affected employees to fielding inquiries from concerned employees and others, few large enterprises could avoid addressing the federal government’s sudden attempt to close U.S. borders to certain groups of people, targeting refugees and Muslims.

The immigration ban is the first of many ethical dilemmas companies will confront under this administration.

Trump signing order January 27The Trump administration brings unprecedented levels of uncertainty for businesses. The immigration ban is the first of many ethical dilemmas companies will confront under this administration. Trump’s controversial proposals include detaining and deporting all undocumented residents of the United States, including children; and creating a Muslim registry. Corporate boards, CEOs and their advisors are asking themselves how the most extreme Trump proposals would affect their company’s people, customers and communities, and how their company should respond. Companies prefer not to address these questions on the fly.

Well-managed companies anticipate risks to their business and plan accordingly. It is no surpsrise that some of the global brands moving quickly to defend the rights of their employees, customers and communities against harmful executive action on immigration in the United States have been working for years to integrate human rights considerations into their global operations. Nike, Starbucks, Coca-Cola, Google, Ford and Microsoft have all faced human rights challenges in the past – from child labor to complicity with abusive security forces to government censorship – and have drawn management lessons from their mistakes. Companies reacting to the immigration ban are pursuing many strategies used by companies seeking to meet their human rights responsibilities, but without articulating any conceptual framework for their actions.

The business and human rights movement provides a roadmap for managing business risks under Trump. Executives and managers looking for a conceptual framework to organize their responses to Trump’s policies, and road-tested tools to manage them, can apply the corporate responsibility to respect human rights to their United States operations.

The Corporate Responsibility to Respect Human Rights

The business and human rights movement provides a roadmap for managing business risks under Trump. 

UNGPs CoverBusiness and human rights” is a management discipline that has emerged over the past three decades. An international benchmark, the United Nations Guiding Principles on Business and Human Rights (2011) (PDF), reflects the working consensus among business, governments and civil society on what companies can do to meet their corporate responsibility to respect human rights. Specifically, companies must:

  • Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; and
  • Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.

To meet this standard, companies have adopted human rights policies, are conducting due diligence to understand the human rights impacts of their operations and business relationships, and finding ways to prevent, mitigate and remedy adverse human rights impacts.

CablammetchMost attention has focused on the human rights impacts of multinationals outside their home countries, typically in places where corporate activity is connected to human rights violations – like child labor, human trafficking and torture – and where legal accountability for perpetrators and remedies for victims are lacking. The most familiar examples are sweatshops in global apparel supply chains and complicity with abusive security forces by oil and mining companies, but advocates have shined a spotlight on the human rights impacts of companies in sectors ranging from agriculture and consumer products to healthcare and technology.

Business and Human Rights under Trump

The business and human rights landscape in the United States shifted dramatically with the election of Donald Trump.

Dodd FrankThe business and human rights landscape in the United States shifted dramatically with the election of Donald Trump.

The prospect of stronger U.S. government action to protect individuals from corporate misconduct has vanished. One of the final initiatives of the Obama administration in December 2016 was the release of a U.S. National Action Plan on Responsible Business Conduct describing the federal policies and governmental expectations for the conduct of U.S corporations operating abroad, including their responsibility to respect human rights consistent with the UN Guiding Principles. Corporate accountability advocates are rightly concerned that the Trump administration will fail to consistently implement the laws and policies contained in the National Action Plan. The ideology and policy prescriptions of Trump’s advisors and cabinet, abetted by Republicans in Congress, means the likely weakening of protections for consumers, workers, and communities against corporate abuses under federal U.S. law, especially concerning the activities of U.S. companies abroad. Regulations of corporate conduct are more likely to be stripped than strengthened. (One exception may be the issue of tax avoidance, for which companies could face greater scrutiny if Trump’s rhetoric becomes policy.) The modest federal human rights reporting requirements enacted during the past decade, like the conflict mineral provisions of the Dodd-Frank Act, are already targeted for elimination. The Trump regime may even stop prosecuting companies for bribing foreign officials under the Foreign Corrupt Practice Act. Advocates will have to rely on other tools to promote corporate responsibility for human rights impacts.

TIMOTHY A. CLARY/AFP/Getty ImagesAbsent government enforcement, voluntary corporate action has become the backstop for meeting the corporate responsibility to respect human rights in the United States. The policy shift in Washington may be good news for business executives who subscribe to a “profits at all costs” business model. It is deeply troubling, however, for the business leaders, managers and employees who know that business success in the long run (beyond the next earnings cycle) is inextricably tied to meeting the expectations of customers, investors and employees that companies demonstrate corporate responsibility, their so-called “license to operate.” Leading companies, especially those companies that have integrated compliance and human rights standards into the way they do business, are unlikely to make bribery or human rights violations part of their business plans. Unethical executives will be less likely to get caught, but responsible companies will continue to comply with the spirit of the UN Guiding Principles. U.S. federal regulators may be instructed to look the other way when companies do harm, but the corporate responsibility spotlight now shines brighter than ever on business operations in the United States.

In a complete role reversal, business leaders may need to mobilize to hold the U.S. government accountable for protecting human rights and obeying the Constitution. U.S. companies face the real prospect of human rights violations connected to their operations much closer to home. Multinationals operating in the United States will be asked to demonstrate that they are respecting human rights whenever U.S. government policies fall short of international standards, and significantly, if government actions violate the United States Constitution. Businesses will also face pressure, as they are right now regarding the immigration ban, to deploy corporate resources as a check on the U.S. government.

Rights under Threat

The corporate responsibility spotlight now shines brighter than ever on business operations in the United States.

Internationally recognized human rights threatened by proposed actions of the Trump administration include the rights to non-discrimination; to recognition and equality before the law; to protection from arbitrary arrest and from interference with privacy; to personal security; to freedom of opinion and expression; to freedom of thought, conscience and religion; to political participation; and to freedom of association. These rights, defined under international law in the Universal Declaration of Human Rights and international human rights and labor treaties, are the focus of corporate efforts to manage their human rights impacts outside the United States. Other rights that have received less attention by most companies may now come into play, such as prohibitions of “propaganda for war” and “advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence” (ICCPR, Article 20), and the right of “ethnic, religious or linguistic minorities” to “enjoy their own culture, to profess and practice their own religions, or to use their own language.” (ICCPR, Article 27). The Trump campaign and administration have demonstrated a willingness to engage in such tactics in the United States, and to target minorities.

The Corporate Responsibility to Respect the U.S. Constitution

U.S. ConstitutionCompanies operating in the United States should consider the U.S. Constitution together with the international human rights instruments to define their potential human rights impacts. Most internationally recognized human rights are protected in some form under United States law at the federal, state and/or local level. The United States Constitution’s Bill of Rights, for example, enumerates rights including the free exercise of religion (First Amendment): the freedoms of speech, of the press, and of assembly (First Amendment); freedom from unreasonable searches and seizures (Fourth Amendment); the right to vote (Fifteenth, Nineteenth, Twenty-Fourth, Twenty-Sixth Amendments); and the rights to citizenship, due process and equal protection of the law (Fourteenth Amendment).

Companies can add “US Constitutional rights” to human rights principles as another lens through which they manage the impacts of their operations in the United States.

Companies can add “US Constitutional rights” to human rights principles as another lens through which they manage the impacts of their operations in the United States. If federal, state or local authorities in the United States engage in systematic discrimination; target individuals or groups for harassment based on national origin or religion; curtail press freedoms; seek to arrest undocumented individuals; separate children from their families; or arbitrarily restrict the right to vote; their actions or omissions are likely to be both unconstitutional and violate international human rights.

Human Rights Impact Management

In the Trump era, companies must exercise due diligence to identify, prevent and mitigate the domestic human rights impacts of their operations and business relationships in the United States.

Due DiligenceCompanies can manage the risks of contributing or being connected to government actions that violate human and Constitutional rights using the same concepts and tools that apply a human rights lens to their non-U.S. operations. In the Trump era, companies must exercise due diligence to identify, prevent and mitigate the domestic human rights impacts of their operations and business relationships in the United States.

If U.S. government action violates rights, companies must take steps not to cause or contribute to any of the human rights impacts, and must be prepared to respond appropriately when any of these scenarios touch their people, products, or partners.

Companies should be prepared to do five things to manage their human rights impacts and meet their responsibilities to respect rights under Trump:

1.  Protect employees.

EmployeesWhen government actions threaten or harm employees, companies must act to support and protect them. The priority for companies in the wake of the immigration ban has been to identify affected employees, ensure their safety, and provide assistance, such as travel, legal and financial support. Providing employees with clear, accurate information about the immigration ban and its impact, so that individuals can take action to protect themselves and their families, is a first step companies can take to meet their responsibility to employees. Employees are the stakeholder group companies can help most directly, but businesses must also consider how to support and protect others connected to their particular business, such as customers, business partners and the communities where they operate.

2.  Avoid complicity.

Rally Against the Immigration Ban (32487627352)Companies must ensure that they are not contributing to rights violations in any way. A practical first step for businesses is to apply international standards for effective human rights due diligence, such as human rights impact assessments, to their corporate operations and business relationships in the United States. Airlines that refuse to allow passage to refugees in the wake of the immigration ban, for example, are at risk of complicity with violations of the right to seek asylum under international law. Particularly important will be corporate relationships with the U.S. government, its agencies and the Trump administration. CEOs serving as advisors to the Trump administration are already attracting extra scrutiny from customers and rights advocates. If the Trump administration were to attempt to detain all undocumented residents of the United Sates or to create a national registry based on religious belief, companies should not provide information nor supply products or services that would foreseeably contribute to rights violations.

Once a company understands how its operations, products or relationships are connected to potential or actual rights violations in the United States, the business must act to cease or prevent its own violation or contribution, and use its leverage to prevent and mitigate violations by others. Exercising leverage may take the form of challenging rights violations or opposing harmful policies. Companies connected to human rights violations committed by government security forces outside the United States have intervened with government authorities seeking to prevent the violations, promoted standard-setting and training initiatives to prevent future violations, and have ended business relationships to ensure they are not connected to violations. U.S. companies are beginning to use their leverage, individually and collectively, to prevent and mitigate the impact of the immigration ban. One can imagine scenarios in which companies refuse to provide goods or services to U.S. government agencies violating rights, or in the case of non-U.S. companies, pull out of the U.S. market altogether if the violations are sufficiently severe.

3.  Mitigate harmful impacts.

NondiscriminationWhen companies are unable to stop harmful policies and actions by others, they can seek to mitigate the negative impact on their employees, customers, business partners and communities. Companies have sought to comply with the spirit of international human rights standards outside the United States by protecting rights “within the factory walls.” Brands sourcing from factories in China, for example, where independent trade unions are banned, have promoted the creation of factory worker councils to bring concerns over working conditions to management. Businesses must consider ways to ensure that their U.S. workplaces provide safe spaces where individual rights are protected. Adopting workplace policies reinforcing a commitment to non-discrimination and prohibiting the harassment of any individual based on national origin or immigration status is one concrete way to meet the corporate responsibility to respect rights.

4.  Challenge rights violations.

Companies must obey the laws wherever they operate, yet the corporate responsibility to respect human rights goes beyond legal compliance. What is lawful may still violate an individual’s rights. Challenges arise for companies when local law or its enforcement conflicts with international standards. Companies must be prepared to challenge government actions that are unconstitutional or violate human rights.

Tech CompaniesIn countries where laws explicitly contradict international human rights standards, companies have found ways to minimize their connection to human rights violations by others. In China, Brazil and elsewhere, for example, foreign technology firms have insisted upon valid judicial orders before acquiescing to demands from government officials to turn over personally identifiable user information for questionable purposes. Companies may face similar situations in the United States if asked by law enforcement authorities to turn over personal information related to their employees’ or customers’ national origin, immigration status or religious beliefs. Businesses can exhaust all available legal processes, as Apple successfully refused to collaborate with the FBI to unlock encrypted iPhones, and challenge the legality of government actions in court, as some companies are now doing in opposition to the immigration ban. Companies can also communicate publicly about government actions that violate rights, using transparency to highlight actual and potential rights violations. Since 2009, for example, Google has published a “Transparency Report” with data on government requests to hand over user data, and how the company responds. Companies will need to be more transparent about what the U.S. government under Trump asks them to do, and the likely consequences of compliance.

5.  Oppose harmful policies.

Google CEOCompanies in diverse sectors are speaking out against the immigration ban. In response to government actions targeting Muslims, immigrants and refugees, companies are directing corporate resources toward organizations defending these groups and their rights. Multinational companies have learned that the corporate responsibility to respect human rights often requires advocating for governments to fulfill their own human rights obligations. Companies have criticized rights violations by governments around the world and opposed harmful government policies privately, publicly and in partnership with others through business associations, coalitions and advocacy networks. More businesses will need to become public rights advocates in the United States. 

Starbucks-refugee-cupCorporate advocacy is most effective when it reinforces company values. U.S. companies in recent years have publicly opposed state laws in the United States that would permit discrimination based on sexual preference. Since the election, U.S. companies have spoken out to let their stakeholders know where they stand on the most extreme Trump proposals.

When engaging in public advocacy on rights issues in the United States, companies will need to overcome any cultural reluctance to speak out publicly. This will seem even riskier because Trump has embraced the “naming and shaming” of individual companies to advance his political agenda. Companies at the center of the business and human rights movement, however, understand that customers, employees and investors often view corporate silence in the face of rights violations as tacit complicity.

Human rights impact management accounts for all of these strategies.

The discipline that accounts for all of these strategies is human rights impact management, an approach that more and more business leaders may now embrace to effectively manage the Trump administration. What is your company doing to meet its corporate responsibility to respect rights in the United States?

Anthony P. Ewing ([email protected]) is a Senior Advisor at Logos Consulting Group and a Lecturer at Columbia Law School, where he teaches business and human rights.

Last week’s viewers might have felt the president’s inclusiveness, but history will remember his dire warnings.

Ten days before handing the Oval Office keys to a successor famous for his mega-rallies, Barack Obama gathered one last huge crowd of his own. His January 10 farewell address was all about his 20,000 admirers at Chicago’s McCormick Place.

“You made me a better president,” Obama said, “and you made me a better man,” Over the course of his 4,267-word speech – the longest presidential farewell of the broadcast era – he used “you,” “your,” or “yours” 81 times. That’s 19 “you” words per 1,000 total words, besting Ronald Reagan’s 1989 mark of 12 per 1,000.

As with inclusive “we” words (like “we,” “us,” and “ours”), the use of “you” words is a hallmark of effective leadership communication. According to Quantified Communications CEO Noah Zandan, who studies and advises on public speaking, visionary leaders like Tesla’s Elon Musk and Facebook’s Sheryl Sandberg use “you” words 60 percent more often than the average speaker.

More popular presidents use more “you” words, too. Obama reflected the glow of his 56 percent approval rating in the latest Gallup tracking poll, ending a list of accomplishments by telling his audience, “That’s what we did. That’s what you did. You were the change.”

Reagan, who left office with a 62 percent approval rating and a nickname as “The Great Communicator,” did much the same in his farewell address. “I’ve had my share of victories in the Congress,” he said, “but what few people noticed is that I never won anything you didn’t win for me.” Reagan also laced the speech with vivid portraits of presidential life, putting watching Americans in his shoes. “You spend a lot of time going by too fast in a car someone else is driving, and seeing the people through tinted glass … And so many times I wanted to stop and reach out from behind the glass, and connect. Well, maybe I can do a little of that tonight.”

Among the seven farewell addresses of the broadcast era, there’s a clear correlation between the frequency of “you” words and the president’s final approval rating – tighter than the slightly positive relationship between “we” words and approval, or the slightly negative one between “me” words and approval.

“You” words are likely both a cause and an effect of the public’s thumbs-up. It’s possible that “you” words are a president’s response to high approval, as when Obama said, “You are the best supporters and organizers anyone could hope for, and I will forever be grateful.” Or, “you” words could be a driver of high approval, convincing voters that the president cares about them: “I am asking you to believe,” Obama said, “Not in my ability to bring about change, but in yours.” (Obama used the word “change” 14 times in his farewell address, echoing his final State of the Union last year and, most of all, his 2008 campaign.)

However, the part of Obama’s swansong that will most likely capture the attention of 22nd Century historians isn’t his inclusive tone. It’s when he drew on the mother of all precedents, George Washington’s hand-written 1796 farewell letter, to go from eulogy to sermon and back again. Bookended by a list of accomplishments and a list of thanks, Obama devoted the middle 57 percent of his speech to warning of three “threats to our democracy:” Economic inequality, racial division, and political partisanship.

“Democracy does require,” Obama intoned, “a basic sense of solidarity – the idea that for all our outward differences, we are all in this together.” Or, in Washington’s words, “You should properly estimate the immense value of your national union to your collective and individual happiness.”

The similarity wasn’t lost on Obama, who at one point even cited his source. “In his own farewell address, George Washington wrote that self-government is the underpinning of our safety, prosperity, and liberty, but,” Obama said, quoting Washington, “’from different causes and from different quarters much pains will be taken … to weaken in your minds the conviction of this truth.’”

The most famous phrase of any modern farewell address is a warning, too. Dwight Eisenhower coined the term “military-industrial complex” to warn of runaway defense spending as he left office in 1961.

For more, follow @Tiouririne on Twitter.

At the start of 2017, Logos Consulting Group is pleased to note that The Power of Communication: Skills to Build Trust, Inspire Loyalty, and Lead Effectively is beginning its fifth year on the Professional Reading List of the Commandant of the United States Marine Corps.

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About the Commandant’s Professional Reading List

The Commandant’s Professional Reading List was launched in 1989 by then-Commandant Gen. Alfred Gray.

In the 2012 letter to all Marines about the List, General James F. Amos, the 35th Commandant of the Marine Corps, said that General Gray

“clearly understood that the development and broadening of the mind is a critical aspect of the true warrior’s preparation for battle.  General Gray viewed reading as the means of preparing for the future, and combat in particular.  He ensured that his Marines knew he considered mental preparation as important as physical conditioning or even MOS [Military Occupation Specialty] training.

“The idea of Marines diligently pursuing the profession of arms by reading on their own has resonated inside and outside the Corps… Marines take great pride in being part of a thinking and learning organization.  The emphasis on thoughtful reading has stood us in good stead over the years.  The adaptation and flexibility shown by Marines faced with a variety of different situations and challenges was anchored in many years of mental preparation for combat.”

The Commandant’s Professional Reading List consists of more than 150 books divided into 19 groups; ten of the groups are rank-specific, nine are in categories such as Leadership, Strategic Thinking, Counterinsurgency, and Aviation. The Power of Communication, by Logos president Helio Fred Garcia is one of eight books in the Leadership category.  Others in that category include:

The books on the Commandant’s Professional Reading List were selected as most pertinent to critical thinking and professional development at each rank.

At minimum, three books per year are required to fulfill annual reading criteria for all active duty and reserve Marines, officer and enlisted. The Professional Categories section presents recommended reading for exploration of selected topics.

Other books of note on the Commandant’s List include:

The Art of War by Sun Tzu, for First Lieutenants.
Outliers by Malcolm Gladwell, for Sergeants, Staff Sergeants, and Captains.
Blink: the Power of Thinking without Thinking by Malcolm Gladwell, for Majors and Lieutenant Colonels.
Diplomacy by Henry Kissinger, for Colonels and Generals.

General Robert B. Neller, the current and 37th Commandant of the Marine Corps, encourages Marines to use the list as a starting point, not a destination.  In a memo to all Marines accompanying the current Reading List, General Neller said,

“I want Marines to read beyond the list, too, especially paying attention to current events, science and technology, and what our potential adversaries are up to around the world.”

The Power of Reading

Retired Marine general James Mattis, nominated to become Secretary of Defense, has been a strong advocate for reading.  He told colleagues, according to the security blog Strife,

“The problem with being too busy to read is that you learn by experience (or by your men’s experience), i.e. the hard way. By reading, you learn through others’ experiences, generally a better way to do business, especially in our line of work where the consequences of incompetence are so final for young men.

Thanks to my reading, I have never been caught flat-footed by any situation, never at a loss for how any problem has been addressed (successfully or unsuccessfully) before. It doesn’t give me all the answers, but it lights what is often a dark path ahead.

Ultimately, a real understanding of history means that we face NOTHING new under the sun.

We have been fighting on this planet for 5000 years and we should take advantage of their experience. “Winging it” and filling body bags as we sort out what works reminds us of the moral dictates and the cost of incompetence in our profession. As commanders and staff officers, we are coaches and sentries for our units: how can we coach anything if we don’t know a hell of a lot more than just the [Tactics, Techniques, and Procedures]?”

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The Power of Communication is written primarily for civilian business leaders, but it adapts the leadership principles of the Marine Corps Doctrinal Publication No. 1, Warfighting, as a conceptual framework to help leaders become habitually strategic.

In reflecting on the Commandant’s list, Garcia said,

“I have had the honor of teaching and consulting with Marines and of getting to know them for more than 25 years.  In that time I’ve been impressed with their commitment to training, teaching, and learning.  The commitment of those at the top to reading, thinking, and reflecting just enhances my view of Marines.  I think that would be the case even if my book wasn’t on the list.  But it’s an added honor, privilege, and delight for me to know that I can continue to influence Marines and their way of thinking at a distance.”

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by Helio Fred Garcia

This is my seventh in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

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See my earlier posts:

In this blog, Carolina Perez Sanz summarizes her capstone, focusing on the particular challenges women face in a workforce where men disproportionately fill the top positions.  This could apply to banking, engineering, or any other industry.

And Carolina develops insights that would apply to all similar sectors.

But her primary focus is public relations, where women are 70 percent of the workforce but only four percent of the leaders.

Carolina completed a PhD in applied linguistics at Instituto Universitario de Investigación Ortega y Gasset in Spain. She is also a certified speech therapist.  For her PhD she did extensive research into how female broadcasters use their voices when performing on the air.

Her dissertation, “Laryngeal Adjustments in the Voice of Female Broadcasters,” uses a technique called electroglottography to analyze the physiology of professional broadcasters’ larynxes when using their conversational speaking style and when using their professional speaking style. She showed that when speakers hyper-articulate, not only do they move their jaws, lips and tongues faster and more strongly, but also their larynxes.

She also writes her own blog, Power at Speech, that focuses on how voice and speech influence the perception of public figures’ personalities.

Carolina, who just received her M.S. in public relations and corporate communications from New York University’s School of Professional Studies, moved from science to social science, looking at women in leadership.

She takes into account cultural and personal biases, and also reflects on current insights on leadership generally.

She builds an interesting model based on trust at  three levels of leadership:

  • Being trusted to perform tasks
  • Being trusted to manage projects
  • Being trusted to lead people

She notes that many women find themselves stuck at the first or second level, and offers strategies to overcome this self-sabotage.

Her insights can help women in public relations and other fields reverse much of the marginalization they experience, and build more fruitful careers.

You can download the entire capstone here.


 

Female Leadership: How Women Can Inspire Trust and
Become Leaders in Male-Dominated Work Environments

by Carolina Perez Sanz, PhD, MS

Carolina Perez Sans, PhD, MS

Carolina Perez Sanz, PhD, MS

If being very good at what one did was the critical factor to becoming a leader, the business world would look very different. Competence is necessary, but certainly not enough to taking on the mantle of leadership.

In the highly feminized industry of public relations, the disproportionate numbers between female employees (70%) and female top leaders (4%) gives proof of this disparity. Women get the work done because they excel in competence and ability, but it is men who set the goals and strategies for the firms.

The reason is that inspiring trust, and not mastering skills, is the defining trait of leaders.

Trust Is Key

Trust happens (or does not) between two people in a relationship. It is complex and nuanced, and different factors on both sides of the relationship contribute to bolster or cripple it.

The trustor (the person who trusts) needs to be in a psychological state of trust. The context of the relationship, personal and social biases, and the reputation of the other party influence the trustor’s inclination – or lack of thereof – to trust.

Factors That Contribute to Trust

Factors That Contribute to Trust

The trustee (the person to be trusted) needs to appear trustworthy in the eyes of the trustor. To do so, he or she has to possess and display certain characteristics.

The typical features that boost trustworthiness are grouped into three categories: ability, integrity and benevolence.

Ability: “I Can”

Ability encompasses the capabilities that professionals have that allow them to perform the assigned tasks. It includes the knowledge, experience, expertise and skills that are in the realm of the work that needs to be done. The expression ‘I can’ symbolizes the Ability level of trust.

Gardeners prove ability with their knowledge about plants, soil and weather, their patience, or their photographic memory. For neurosurgeons, ability includes a steady hand, a deep knowledge of brain anatomy, or being able to concentrate for long periods.

Integrity: “I Will”

Integrity is built on behaviors such as keeping one’s word, being loyal to the other party and the relationship, and respecting a set of values that both parties adhere to. The Integrity level reflects an ‘I will’ attitude.

Mail carriers exhibit integrity when they deliver the mail in a timely fashion to the right recipients, or when they don’t disclose mailing information to other recipients or senders. Public relations professionals show integrity by not working for a client’s direct competitor, or by not sharing clients’ confidential information.

Benevolence: “I Care”

Benevolence entails being able to put the other party’s objectives ahead of our own, demonstrating good will towards the other party in a business relationship, and caring for them more than we care for ourselves.

But it doesn’t mean sacrifice for the sake of an abstract concept of goodness, or avoiding hurting other people’s feelings. In business contexts, being benevolent means to behave in ways that are best for our clients and/or company.  ‘I care’ summarizes the Benevolence level.

For advisors, benevolence entails speaking truth to power. They show benevolence because they act in the boss’s or client’s best interest and are ready to put their own position at risk. Attorneys demonstrate benevolence when they turn down cases that they cannot win.

3 levels of trust

The Competence – Trust Gap

The Three-Level Model of Trust provides an explanation for the imbalance between women’s participation in the workforce and their share of leadership. As Climb Leadership Consulting president Chuck Garcia very accurately told me, “Women strive for perfection, while men strive for progress.” In other words, women excel in the ability level.

Three Self-Sabotaging Mistakes

Perfectionism leads women to three common self-sabotaging mistakes that undermine their ability to inspire trust and hence, stifle their leadership potential.

  • Deference to authority
    When women’s most important objective is to deliver spotless, perfect work, they reflect that they expect that an authority figure will judge them and their work.Because they defer to a higher authority, they tend to hold back in meetings.Expecting (and fearing) to be judged, they prefer not to share an idea lest it be imperfect.And since they believe they need someone to validate their ideas, they are not assertive. Striving for perfection makes some women berate themselves for the mistakes they make.Again, their fear to be judged compels them to self-justify before someone starts pointing fingers at their mistake.
  • Inability to create and project a vision
    When they berate themselves for not being perfect, they show their inability to see errors as points in time and necessary steps for progress. They get stuck in what went wrong and why, which prevents them from looking to the future and finding the solution.Women apply only for jobs they feel they are perfect for.According to LeanIn.org, women don’t apply for jobs unless they meet 100% of the criteria, while men apply when they meet 60%. Besides insecurity, this habit reflects these women’s incapability to envisage their future selves. They can’t foresee how they will change and learn on the job because they consider only how they are now.
  • Lack of benevolence
    The perfectionist’s main objective is to be judged well. Benevolence, on the contrary, implies being able to erase oneself and work in the other party’s best interest.When women strive for perfection, they imply that they care about how they appear to others more than they care for others.

Bridging the Gap

While aiming at high quality standards is commendable, women need to get past the “worker ant” stage if they want to reach top leadership positions.

Showing authentic care for the objectives of others is what defines leaders.

When speaking in public, leaders care about the audience and help them connect. When leading teams, leaders care about the followers and help them thrive.

When leading a company, leaders embody its vision and help employees work strategically towards the ultimate goal.

#  #  #

You can download the entire capstone here.

Logos Consulting Group president Helio Fred Garcia co-authored an analysis of one of South Korea’s biggest crises of 2016 in Korea’s leading business journal, Dong-A Business Review.

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The analysis was co-authored with Dr. Hoh Kim, founder, head coach, and facilitator at THE LAB h in Seoul, Korea.

Dr. Hoh Kim, founder, The Lab h, Seoul

Dr. Hoh Kim, founder, The Lab h, Seoul

Dr.  Kim, former head of Edelman’s Korea office, is a certified trainer in the Cialdini Method developed by Dr. Robert Cialdini, and a certified coach in the Marshall Goldsmith Certified Stakeholder Centered Coaching method.  Dr. Kim is the primary author of the Dong-A Business Review analysis.

Their article examines the crises surrounding The Lotte Group, one of Korea’s leading industrial conglomerates.  Lotte Group consists of more than 60 business units and employs 60,000 people in such industries as hotels, beverages, candy manufacturing, fast food, retail, financial services, chemicals, electronics, IT, construction, publishing, and entertainment.

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In October Lotte Group’s Chairman, Shin Dong-bin, was indicted on tax evasion, embezzlement, and other charges.  His sister, Shin Young Ja, was arrested several months before for embezzlement and bribery.

Lotte Group is one of Korea’s chaebols, family run business conglomerates, a common form of business organization in Korea.

You can download the complete original Korean language version of the analysis here.

An English translation follows below:


Untitled

The Crisis Management of Lotte

‘A red team’ that challenges a corporation from within is necessary
in the era of ‘reputation management’

Co-authored by

Hoh Kim, Founder, Head Coach & Lead Facilitator, THE LAB h and
Helio Fred Garcia, President of Logos Consulting Group

Published at Dong-A Business Review (DBR), December 2016 Issue 2 (No. 215), pp. 90-94, in Korea

AUTHORS

  • Dr. Hoh Kim graduated from Hankuk university of foreign studies, where he majored in French literature and philosophy. He earned his master’s degree in PR at Marquette university and his Ph.D at Graduate School of Culture Technology, KAIST. He is one of the 19 Cialdini Method Certified Trainers (CMCT) approved and endorsed by Robert Cialdini, the author of Influence: The Psychology of Persuasion.  He has previously led the Korea office of Edelman, a global PR firm and written several books including Cool Apology (co-authored), Cool Survival Kits, Reputation Society (co-authored) and Why I Can’t Say No (all in Korean).
  • Dr. Helio Fred Garcia is the founder of Logos Consulting Group and has more than 35 years of experience in crisis management, executive coaching and consulting. He is an adjunct professor of management in NYU’s Stern School of Business Executive MBA program, where he teaches crisis management. He is the author of  The Power of Communication: Skills to Build Trust, Inspire Loyalty, and Lead Effectively, and is the co-author with John Doorley of  Reputation Management: The Key to Successful Public Relations and Corporate Communication, which was translated into Korean and published as Reputation Management Strategy in Korea by Alma Press in 2016.

 

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ABSTRACT

According to the book Reputation Management Strategy, the formula for reputation is ‘Reputation = (financial) performance + (organizational) behavior + (corporate) communication’. The Lotte crisis has largely been triggered by problems with its organizational behavior. First, ‘an owner risk’ has occurred in leadership behavior and second, in corporate behavior dealing with its customers and business partners, the company led people to believe that it is not an ethical company. Finally, Lotte has failed in communication because there has been a huge gap between its short-term responses, actual leadership behaviors and its nominal long-term vision.

This article offers suggestions for Korean companies that are facing  challenges similar to Lotte’s.

For starters, companies need to get stakeholders to be involved so that they can constantly challenge the companies from the outside. Second, corporations need to have something like ‘a red team’ or ‘a devil’s advocate’ within the organization so that they can bring genuine change to corporate behavior.

ARTICLE

This year the Lotte Group experienced its worst crisis. Here are some questions we need to ask concerning the issue:

  • Q1. How did people first respond to the scandal? Did they say “No, Lotte would never do such a thing” Or did they say “I told you so”.
  • Q2. How would you respond if someone tells you that you are acting just like Lotte?  Would you feel flattered or offended or just regard the comment as neutral?
  • Q3. Lotte has made several promises to reform it. Which one impressed you the most? Do you really believe that the company will keep the promises?

We will explain later why these questions matter for Korean businesses in terms of crisis management. In the meantime we want readers to find the answers to the questions on their own.

For the most part, when we analyze a case, we take a careful look at it as if cameras zoom in. And then we figure out what the problem was and how the problem should have been solved. But in the case of Lotte, one of the authors (Dr. Hoh Kim) thought that when it came to solving the problems there was little Lotte could do in the short term. There were three reasons for this.

  • First, the core of the crisis lay in conflicts among three members of the founder’s family.
  • Second, the founder has failed to smoothly pass down the business to his children, which should have been done over the course of years or decades.
  • Third, it is only the founder and his family who could have prevented these problems.

In this article we’d like to talk about Lotte’s crisis management from a reputational perspective.

In the field of crisis management, there is something called issue index. The index refers to a list of potential issues that might occur to a company in the future. When we were reading news articles about the 2016 Lotte crisis, it almost felt like we were seeing the issue index of Korean conglomerates in general. Of course, how dangerous the problems are and how the issues affect the businesses can be different from company to company.

But it is worth looking into the Lotte case because so many Korean conglomerates share the same kinds problems as Lotte. Conflict over succession and slush funds are a good example.

The authors discussed how we could approach the Lotte case and decided to suggest a common tool that can be applied to other Korean chaebols. (Chaebols are large Korean business conglomerates, mostly family led.)

We believe that it would be helpful to develop ‘a mirror’ that other companies or business people could use to reflect themselves, not ‘a mere window’ through which other conglomerates may just watch and do nothing.  But a mirror to create self-awareness.

Also, with this analysis we’d like to present the last puzzle piece to Korean chaebols that can help them advance their management of crisis and reputation.

One Element in the Reputation Formula that
Most Korean Conglomerates are Missing:

The book Reputation Management Strategy that Dr. Garcia has co-written with John Doorley introduces a reputation formula as below:

Reputation =
(Financial) Performance + (Organizational) Behavior + (Corporate) Communication

The seriousness of the Lotte crisis lies not just in legal risks that it might face but also in a damage to its reputation.

The crisis facing Lotte at the moment is completely different from a crisis that a conglomerate might encounter when it fails to do well in its operations. The current Lotte crisis is highly likely to directly hurt its reputation. So in this case one of the most important crisis-management goals is to recover reputation.

What lessons can the reputation formula offer to Korean Chaebols as a whole as well as to Lotte?

The three elements in the formula are:

    1. Financial Performance
      • Long-Term Performance
      • Short-Term Performance
    2. Organizational Behavior
      • Leadership Behavior
      • Behavior Towards Others
      • Behavior Towards Society
    3. Corporate Communication
      • Tactical and Short-Term Communication v. Strategic & Long-Term Communication
      • External Communication v. Internal Communication

Financial performance, as an element that affects reputation, has two factors: long-term performance and short-term performance. Long-term performance can include profits of the last 10 years or long-term growth potential. Profit for the year is an example of short-term performance. In the case of Lotte, financial performance was not the major factor that affected its reputation.

When it comes to organizational behavior, there are three factors:

  • The first is leadership behavior.
    When the Lotte crisis took place, the behavior of the founder’s family was broadcast almost in real time and not just Lotte employees but also the public were able to learn about it. The conflict among the family members exposed various problems within the chaebol including opaque business practices and governance structure, and succession-related problems. And all these conflicts still remain unresolved. What is unique about founder’s family-related problems is the fact that both the crisis maker and the crisis manager are the founder and his family dynasty. This is a serious problem because it is almost impossible for the employees to take actions to solve the problem. All they can do is simply following orders from the founder’s family.
  • The second factor of organizational behavior is about consumers and business partners.
    This includes how satisfied consumers are with the products and services provided by Lotte and what its partners (vendors) think of working with Lotte.
  • The third factor is about corporate behavior towards society.
    So-called ‘Corporate Social Responsibility’ is a good example of this.  In October, Lotte’s Chairman, Shin Dong-bin, made a public apology and announced reform plans. In the plans, he adjusted the original growth target of increasing its sales to 200 trillion Won (Korean currency) by 2020 and of becoming Asia’s tenth largest company. He then shifted his focus to corporate social responsibility, particularly philanthropy, and said he would put more emphasis on meeting people’s expectation and promoting social values. He stopped short of detailing his plans for fulfilling corporate social responsibility.

In fact, what really matters when it comes to corporations’ social behavior is not philanthropic activities but how companies make profit.

As a matter of fact, in ISO 26000, an International Standard providing guidelines for social responsibility, the word ‘philanthropy’ is mentioned only once. According to the standard, how responsible a company is depends on how much the company contributes to things like human rights, labor practices, the environment, fair business practices, consumer issues and local communities. ISO asserts that corporate social responsibility is about how to make a profit, not about what to do with profit. In other words, to become socially responsible, a company needs to make profit in positive ways. Whether it engages in charitable activities or not is a minor issue. Korean chaebols need to do more in this regard.

Corporate communication, the last factor of the reputation formula, includes both tactical and short-term communication activities like press release and press conference, and strategic and long-term communication activities such as creating corporate missions, visions and values.

Another form of corporate communication includes communication with consumers and the public and communication with employees.  If you go to Lotte’s website(lotte.co.kr), you can find its management policies. The first policy is about transparency and it reads: “we shall promote transparency in our operation and financial performance by tightening self-monitoring systems and strengthening regulatory tools”.

The company also says that it shall put the idea into practice by establishing a system that helps its shareholders understand how the company is doing, by honestly sharing management-related information and decision making and by actively supporting the board of directors and creating a committee that promotes transparent business practices.

One of the core values of the company is responsibility and it reads: “we shall always honestly run the business and contribute to social development by fulfilling our social responsibility. And its action guidelines read: we shall not cover up our mistakes and immediately inform our mistakes and correct them; we shall execute our tasks according to legal, ethical and social standards.”

Lotte is being criticized because there are gaps between its corporate communication and organizational behavior, particularly its leadership behavior.  This Say-Do Gap is the key problem.

One could conclude that Lott’s statements of corporate vision, values and action guidelines are just meant to be framed and hung on the wall. One might also add that in reality no company takes these things seriously.

But stated values create expectations.  And trust rises when expectations are met; falls when expectations are not met.

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If corporate founders ignore the management policies and detailed action plans that they themselves have created, they will face a situation where it is almost impossible to exercise their leadership because they will lose the trust of those who matter to them.

This is the last piece in the reputation puzzle that Korean conglomerates need to improve. Korean chaebols have been able to show world-class business performance through innovation in their products and services. They also have heavily invested in advertising and promotion and have seen great improvement in their corporate communication.

However, they are rightly criticized for failing to make a meaningful change in their corporate behavior, particularly in their leadership and social behavior.  The founders and chief executives of chaebols create ‘great’ visions and values for their companies, but top management themselves often do not take these visions and values seriously. In today’s world, where it is easy to monitor corporate behavior and where stakeholders have easy access to information, organizational and leadership behaviors that haven’t been detected before now can greatly influence corporate reputation.

As we analyzed the Lotte case, we defined the gap among performance, behavior and communication as the fundamental cause for loss of Lotte’s reputation.

Korean chaebols as a whole often have gaps in their business, not just the gap between behavior and communication, but also between performance and communication and between performance and behavior.

So far, when Korean chaebols have faced a crisis as a result of their mistakes and wrongdoings made public, they have done all the same as if there is a formula for such situation: to issue an apology, hold a press conference, take a bow and make some promises.  But, few companies have kept their promises and now few consumers and citizens believe them.

One of the most important jobs of the public relations departments of large companies in Korea has been to stop scandals involving their founder’s family dynasty from spreading. This year Koreans saw massive protests against the government that have been symbolized as candles. In this circumstance one might wonder if Korean conglomerates will be able to continue to make profit (performance) and manage crises and their reputation in the way they have been doing for a long time. Will that be possible without changing their behavior?

The Last Piece of Puzzle:
Will They Change Their Behavior?

The important question that conglomerates, founder’s families, and executives need to ask themselves is whether they are going to change their behavior.

The challenge that Lotte chairman Shin Dong-bin faces now is not to overcome this crisis but whether he changes the corporation’s behavior. If he doesn’t, the company might face another similar or worse crisis in the future.

What can businesses do to change their behavior? We get some ideas from a behavior-change model in the leadership field, not from the crisis-management field.

Dr. Marshall Goldsmith, the world’s leading leadership coach, says that stakeholder engagement is the most important factor in changing corporate behavior. So, for example, if one is to quit smoking, he needs to let his colleagues know about his decision. When around him are engaged they can watch to determine whether he changes his behavior.  As a result, he is more likely to become determined to change. This is part of why many people sign up and go to the gym, or team up with others to exercise. They aim to change their behavior by engaging stakeholders.

In October, Lotte chairman Shin announced reform plans and said that he will establish a watchdog committee that will be directly monitored by him and hire experts from outside. Will this committee be able to lead the conglomerate to change?

To succeed, the committee must be able to act like a red team.

A red team refers to a structure similar to a devil’s advocate — someone who is actually a member of the organization but monitors and points out problems from the opposite point of view in the interest of that organization.

If Lotte has such a committee just for appearance’s sake, the effort is highly likely to fail.

In the beginning of this article, we asked three questions. Now we’d like to explain why such questions matter and what our answers are.
In order for companies to change their behavior, nothing is more important than to figure out exactly how their stakeholders  think of them. In fact, many Koreans have negative perspectives of Korean conglomerates.

If the founders of big corporations or chief executives are to properly manage crises and reputation, they need to understand how those who matter to them view them. When a disaster takes place or when the end of the year is near, chaebols often donate hundreds of millions or even billions of Won (Korean currency) to those in need. They even encourage their employees to perform community services. So big companies often complain that they are unfairly criticized because they actually do many things for communities.

Here’s a question: If chaebols raise their donations by two to three times or perform more community service, will their stakeholders have a better view of them?

We don’t think so, because people’s fundamental ideas of chaebols are negative.  Many take conglomerates’ donations and community service for granted because they believe that chaebols must give some money for the poor at the end of the year because they have done so many bad things all the year round.

What kinds of strategies should conglomerates adopt to effectively manage their reputation and crises? And how should they put the strategies into practice?

In most cases, there are two types of behaviors that chaebols engage in facing a crisis. First, they engage in behaviors that make their negative image worse. Such behaviors include cover-up, lie, evasion of responsibility, denial and even blaming victims — just as recently happened when a daughter of Korean Air Line’s chairman threw a fit, angrily insisting that a plane she was on return to the gate of an airport. These kinds of behaviors reinforce consumers’ negative views of chaebols.

The other type of behavior is the ones that contrast sharply with people’s negative perspectives. For instance, the public  found it surprising when a daughter, not a son, of the founder’s family of a big company had joined the navy as a naval officer. The public knew that the decision was not made to improve the image of the company but still found it pleasantly surprising.

Also, when Korea was hit by the Middle East Respiratory Syndrome pandemic (MERS),  Samsung’s Vice Chairman JY Lee conceded his company’s fault and sincerely apologized to the public. This gave the public an opportunity to fix their negative perceptions towards chaebols because most people thought that chaebol owners would deny their responsibility when a crisis takes place.

Of course, if Korean conglomerates are to overcome crises and transform their image, they need to do more than just create a temporary surprising event. Corporate founder’s family must be determined and engage in consistent “surprising behaviors.”

Protesters holding candles are calling for change not just within the government. They are sending a strong signal that there must be a paradigm shift in chaebols’ management of crisis and reputation.

The public is calling for change in corporate behavior. We each have public relations experience and have long worked in crisis management and strategy communication consulting. The conclusion that we want to share with readers is clear: If one approaches crisis and reputation management from the perspective merely of public relations, one is bound to fail.

Food for Thought

      1. What kinds of images do publics have about my company? Apart from the products and services that my company provides, how do publics think of my company? Do they think of it as the one that coexists with, is mutually beneficial with and contributes to society? Or as evil? If the latter, why is that? What are your solutions to fix the image?
      1. It is difficult to improve corporate reputation merely by engaging in some corporate social responsibility efforts and philanthropy or by handing out some corporate leaflets. To get positive reputation, the entire company needs to make an effort to create social value, and this approach should be the center of  profit-making process. The reason why this approach matters is the reason why the CSV (creating shared value) strategy matters. Does my company take CSV seriously? Does it have a team that puts the idea into practice?

 

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Note:

Reputation Management: The Key to Successful Public Relations and Corporate Communication, by John Doorley and Helio Fred Garcia, was originally published in 2007.  It is now in its Third Edition in English.  A Korean translation was published as Reputation Management Strategy in 2016.  A Chinese edition is scheduled to be published in early 2017.  A French language edition is now underway, due to be published in late 2017.

John Doorley is a Visiting Associate Professor at Elon University in Elon, North Carolina, and a Director in Mindful Reputation.  He is a founding academic director of New York University’s MS in Public Relations and Corporate Communication.

Dr. Hoh Kim and Helio Fred Garcia began working together in September, 2015 when Dr. Kim was the moderator and Mr. Garcia was a keynote speaker in the Chosun Issue Forum, a conference on crisis management in Korea sponsored by Chosunilbo, Korea’s leading newspaper.

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Dr. Hoh Kim, left, moderating a panel discussion at Chosun Issue Forum, Seoul, September, 2015