ceo communications agenda setting conference, zurich, dec 4, 2008 eckhard zanger, mtu aero engines,...
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CEO Communications
Agenda Setting Conference, Zurich, Dec 4, 2008
Eckhard Zanger, MTU Aero Engines, SVP Communications and IR
8. Oktober 2007 2
The product: turbofan engine
HPC
high-pressurecompressor
HPT
high-pressureturbine
LPT
low-pressureturbine
combustor
Fan
LPC
low-pressurecompressor
8. Oktober 2007 3
The commercial product application range
PW4000 Growth GP7000 CF6 PW2000 V2500
JT8D PW500PW300PW6000
Airbus A319,A320, A321,Boeing MD-90
Boeing 757, Boeing C-17,(milit.: F117)
Airbus A380 Airbus A300, A310, A330,Boeing 747, 767,MD-11
Boeing 777
Boeing MD-80-Series
Cessna Bravo,Cessna Excel
Learjet 60, Do328JET, Gulfstream G200, Hawker 1000,Dassault Falcon 7X, Cessna Sovereign
Airbus A318
8. Oktober 2007 4
The military product application range
GP7000
F/A-18 Hornet
Sikorsky CH53-G
PAH-1EurocopterTiger
TransallBreguet Atlantic
TP400-D6 Tyne T64 MTR390 250-C20
Alpha JetPanavia Tornado F4-Phantom IIEurofighterTyphoon
EJ200 RB199 J79 Larzac04F414 / F404
Airbus A400M
8. Oktober 2007 5
Cooperation structures in the aero engines industry
8. Oktober 2007 6
MTU Aero Engines
• German Mid-Cap Company
• Revenues: 2.6 bn €
• Employees: 7,500
• CEO: Egon Behle
• Prior positions at ZF Lenksysteme GmbH, ZF
Friedrichshafen AG, Fortuna Spezialmaschinen GmbH,
Renk AG, Dornier GmbH and Robert Bosch GmbH
• Studies in Aerospace Engineering at Stuttgart University
8. Oktober 2007 7
9,94%
11,54%
13,63%
12,58%
13,66%14,04%
2002 2003 2004 2005 2006 20078%
10%
12%
14%
16%
Personalisation (CEO)
CEOs occupy a bigger slice of reporting
The growing personalisation of business coverage – as shown in the example of German DAX 30 blue chip companies – is part of bigger general trend. One cause is the increasing competition between media outlets.
100%= all reports about DAX 30 companies and board members
8. Oktober 2007 8
1,14% 0,9% 1,04% 0,99%
1,37% 1,51%
0,65% 0,56% 0,27% 0,18% 0,18% 0,15%
4,64%4,14%
4,95%
7,24%7,58%
9,63%
2002 2003 2004 2005 2006 2007
0%
2%
4%
6%
8%
10%
12%
Position Capability Personality
Management turnover accelerates
Reporting about management changes has increased notably over the last years, while references to the capabilities of top managers declined. Rumours about impending resignations are becoming more often self-fulfilling prophecies.
100%= all reports about DAX 30 CEOs, missing to 100%: corporate issues
8. Oktober 2007 9
20022003
20042005
20062007
0%
10%
20%
30%
40%
-10%
-20%
Personality Capabilities
Integrity of CEOs gets questioned
more positive
more negative
While positive reports about top executives have been the rule in the first years of the decade, the scandals of the new economy period have affected the media image of the personal integrity of top managers – with a marked effect on the public trust.
Share of positive – share of negative reports
8. Oktober 2007 10
II/03III/03
IV/03I/04
II/04III/04
IV/04I/05
II/05III/05
IV/05I/06
II/06III/06
IV/06I/07
II/07
0%
10%
20%
30%
40%
-10%
-20%
-30%
-40%
-50%
CEO DC
Communication generates opportunities
more positive
morenegative
The coverage of DC demonstrates how a CEO loses his operative freedom when he comes under continuous attack from the media. Successful communications, on the other hand, can improve the outlook, even when the problems have not yet been tackled.
Share of positive – share of negative reports on Jürgen Schrempp (till 31.12.2005) /Dieter Zetsche (since 1.1.2006) versus DaimlerChrysler
Image Malus
Image Bonus
8. Oktober 2007 11
II/03III/03
IV/03I/04
II/04III/04
IV/04I/05
II/05III/05
IV/05I/06
II/06III/06
IV/06I/07
II/07
0%
10%
20%
-10%
-20%
-30%
-40%
-50%
-60%
CEO Siemens
Overwhelmed by the events
more positive
The example of Siemens shows the key role of communications for the protection of the image of the CEO. Already in January 2006, Klaus Kleinfeld was rated worse than the company, before being engulfed by the corruption scandal in September.
Share of positive – share of negative reports on Heinrich von Pierer (till 31.12.2004) /Klaus Kleinfeld (since 1.1.2005) versus Siemens
morenegative
8. Oktober 2007 12
II/03III/03
IV/03I/04
II/04III/04
IV/04I/05
II/05III/05
IV/05I/06
II/06III/06
IV/06I/07
II/07
0%
20%
40%
-20%
-40%
-60%
CEO Deutsche börse
Management remained an image drawback
more positive
more negative
The communication of Deutsche Börse did not manage to transfer the operative success of the business into a favourable reputation for the CEO. This holds true for Werner Seifert as well as for his successor Reto Francioni.
Share of positive – share of negative reports on Werner Seifert (until 10.05.2005) /Reto Francioni (since 1.11.2005) versus Deutsche Börse
8. Oktober 2007 13
II/04
I/04
IV/03
III/03
II/03
I/03
IV/02
,4
,2
0,0
-,2
-,4
Fachkompetenz
Person
Entlohnung
After wages, competency was critizised
Basis: stories in 23 weekly media, TV-news and dailies
Competency
Personality
Salaries
8. Oktober 2007 14
0%
20%
40%
60%
80%
100%
Change of the company‘s public identity
The change of the CEO for MTU was a distinctive conjunction of the public image of managers in 2008. While Stark having drawn positive and partly also negative statements upon himself, Egon Behle is portrayed particularly factually.
0
200
400
600
800
1.000
Stark Behle
negative no clear rating positiveVolume of coverage / statements
8. Oktober 2007 15
Stark, Udo
Winkler, Reiner
Behle, Egon
Martens, Rainer
Kessler, Bernd
Huth, Johannes
Eberhardt, Klaus
Wittig, Sigmar
Steffens, Klaus
Flassbeck, Harald
Fröhlich, Babette
Keller, Michael
0 200 400 600 800 1.000 1.200 1.400
Stark, Udo
Winkler, Reiner
Behle, Egon
Martens, Rainer
Kessler, Bernd
Huth, Johannes
Eberhardt, Klaus
Wittig, Sigmar
Steffens, Klaus
Flassbeck, Harald
Fröhlich, Babette
Keller, Michael
0% 20% 40% 60% 80% 100%
Only Stark had a distinctive coverage in 2007
The managers of MTU were normally portrayed outstandingly neutrally and factually in the media.
2007
negative no clear rating positiveVolume of coverage / statements
8. Oktober 2007 16
Behle, Egon
Stark, Udo
Winkler, Reiner
Martens, Rainer
Huth, Johannes
Hughes, Louis
Steffens, Klaus
Sroka, Günther
Eberhardt, Klaus
0 200 400 600 800 1.000 1.200
Behle, Egon
Stark, Udo
Winkler, Reiner
Martens, Rainer
Huth, Johannes
Hughes, Louis
Steffens, Klaus
Sroka, Günther
Eberhardt, Klaus
0% 20% 40% 60% 80% 100%
Behle and Stark neutral after the change of leadership
The manager image of MTU changed rapidly after January 2008. All top-managers, including the old and the new CEO, were almost exclusively portrayed neutrally in the media.
2008
negative no clear rating positiveVolume of coverage / statements
Position within company
Carreer
Prognosis
Business results
Personal finances
Turnover
Demand
Locational policy
State of business
Other aspect
Private life
State of the industry
Growth
Cooperations
IPO
0 50 100 150 200 250 300
Position within company
Carreer
Prognosis
Business results
Personal finances
Turnover
Demand
Locational policy
State of business
Other aspect
Private life
State of the industry
Growth
Cooperations
IPO
0% 20% 40% 60% 80% 100%
8. Oktober 2007 17
Unexpected parting well configured
Stark’s decision not to prolong his contract came unexpected for the media in 2007. In the course of this management change, the communication was mainly targeted towards pointing out Starks business successes.
negative no clear rating positiveVolume of coverage / statements
53,8%
8,3%
37,9%
Stark, Udo Behle, Egon Other managers
Stark, Udo
Behle, Egon
Other Managers
0% 20% 40% 60% 80% 100%
negativ o. eind. Wertung positiv
8. Oktober 2007 18
Upcoming parting didn‘t weaken Stark
Regardless of communicating Stark’s departure at the end of the year fairly early, MTU managed to avoid having the media set its focus on the successor too early. The image of the company was thus embossed by Stark until the official change of office.
Position within company
Carreer
Cost management
Prognosis
Economic framework
Competency
Currency rates
Cost savings
Dealing with media
Compensation
Redundancies
Growth
Production: Factory
Private life
Costs
0 10 20 30 40 50
Position within company
Carreer
Cost management
Prognosis
Economic framework
Competency
Currency rates
Cost savings
Dealing with media
Compensation
Redundancies
Growth
Production: Factory
Private life
Costs
0% 20% 40% 60% 80% 100%
8. Oktober 2007 19
Getting to know the new CEO was the main issue in the first quarter
The leading nationwide German media mentioned Behle only four times between 2005 and 2007 in his former function as the CEO of ZF-Lenksysteme. Therefore, in the first quarter of 2008, getting to know the new manager dominated the coverage.
negative no clear rating positiveVolume of coverage / statements
Emissions, CO2
Acquisitions
Locational policy
Cost savings
Currency rates
Cost management
Production process
Rel. to busin. partners
Rel. to suppliers
Economical framework
Costs
ROI
Carreer
Turnover
Share holders meeting
Redundancies
Demand
0 5 10 15 20 25
Emissions, CO2
Acquisitions
Locational policy
Cost savings
Currency rates
Cost management
Production process
Rel. to busin. partners
Rel. to suppliers
Economical framework
Costs
ROI
Carreer
Turnover
Share holders meeting
Redundancies
Demand
0% 20% 40% 60% 80% 100%
8. Oktober 2007 20
Factual topics took over in the second quarter
After the short phase of getting to know the new CEO was over, the public profile of Behle concentrated almost exclusively on factual topics. The public got to know him as a technically and economically competent man of action.
negative no clear rating positiveVolume of coverage / statements
8. Oktober 2007 21
CEO Change – Activities at MTU
Media positioning:
• 8 weeks after arrival: clear and open background briefing with top 12 journalists (newswires, business and financial media, trade press)
• resulted in portraits and positive ongoing media coverage
• Interviews with major business / financial dailies and trade magazines
Other than media:
• Welcome speech and discussion with 1,000 employees in week 2
• Internal “Road show” at five other MTU locations worldwide
• Two dozen meetings with relevant top politicians
• Investor and analyst road shows in Europe and the U.S.
8. Oktober 2007 22
Conclusions
1. Personalization of business topics has increased
►In the past, coverage was fact-driven and less demanding for the CEO
►Today, positioning of CEOs has to be story-driven to support the company perception
2. Public appearance of CEO must be as authentic as possible and as necessary
3. “The higher they rise, the deeper they fall” - media presence must be limited and well-balanced
4. Focus on business topics – CEO is the representative of his organization
5. Set your own agenda – don‘t believe you have to react and comment on everything
6. Celebrity status damages the CEO‘s reputation, sooner or later
7. Don’t concentrate on one singular topic or image aspect - if this one fails, all is lost
8. CEO change: the stories about the outgoing and the incoming CEO have to match