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CEO Reputation: A Capital Investment (Part II)

But I say, by God, in 9 cases out of 10, you show me a truly great company with a great culture that 
consistently outmaneuvers its competition and is agile and has a high level of morale and retention,
 and people coming our of universities want to work for that company, then I say: Look at the top guy.

Robert  Lutz, former president of Chrysler Corp; current development chief of General Motors.

       CEO capital. By this tern, I mean the asset created by a CEO's reputation (not mere public acclaim when it is harnessed to advance a company's success. It is the collective esteem that significant others, inside and outside a company, hold for the company's chief executive officer and, as a consequence, for the company. CEO capital is the composite of perceptions about a CEO that a company's stakeholders hold, whether these constituents are employees, Wall Street analysts or investors, customers, the media, government regulators, community leaders, or other business influentials.

     CEO capital might plausibly fall under any number of components constituting intangible assets such as customer relationships, talents, and brand strength. Yet CEO capital, because of its impact on stakeholders, market capitalization, and other elements of corporate success, is far too significant to warrant anything but a separate and distinct classification. Just like any other wealth-creating asset, CEO capital needs to be invested in, managed, and leveraged over the long term to reap enduring benefits. Companies can utilize the equity that accrues from developing CEO capital to attract more investors, more partners, more customers, more job applicants, and more trust in corporate decisions. To emphasize just how important CEO reputation is to a company's success, to stress its value as a wealth-creating asset, the title of this book is CEO Capital, not CEO Reputation. I discuss a CEO's reputation, not as a frivolous exercise to feed executive egos, but because CEO reputations have a significant impact on a company's success and viability. CEO reputation, when harnessed on behalf of corporate goals, is a capital asset.

      Every company today must acknowledge the importance of its CEO's reputation, and every company must spend the time to isolate the components of developing CEO capital, understand its underpinnings, and manage this highly important corporate asset. When accumulated, CEO capital.

– Has a direct positive impact on a company reputation and success

– Produces clear, discernible, and valuable payoffs

– Matters to an unprecedented number of influential constituencies

 Affords more time to develop long-tern solutions in a fast-paced business climate

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