The CEO Effect

How much does the CEO’s image influence your company’s success? According to a study by the University of Georgia and Penn State, the public’s opinion of your CEO matters more than ever. They coin it, the “CEO effect.” As consumers become more morally conscious of their favorite products and companies, the CEO’s image factors into the consumer’s decision.

Evan Speigel, CEO and Co-Founder of Snapchat
photo credit: JD Lasica / Flickr

The stories of Snapchat and Facebook all point to the importance of the CEO in the short run. Their long-run success, though, seems almost untouched by their CEO’s reputation. So is it something to worry about?

My number one piece of advice for those in the public eye is that nothing is safe on the internet. Snapchat’s CEO, Evan Spiegel, got in serious PR turmoil last year when a series of crude emails were released from his email account at Stanford. Most of the articles directly talk about his fraternity’s sexualization and objectification of college girls. It only added fuel to the rumor that snapchat was created by a misogynistic fraternity brother who wanted a secretive way to get explicit photos.

But look at Snapchat now.

It has become a vital tool for marketers with location based filters and “discover” stories hosted by companies such as CNN, Comedy Central, and ESPN. So has Evan Spiegel’s image really hurt the company? It’s clear in the short run it did. But in terms of the long run, it all depends on the company’s ability to innovate. Snapchat survived because they were able to turn the company into a photo sharing and marketing platform.

On the other hand, a positive CEO effect can be beneficial for both the short and long term. Richard Branson, the founder of Virgin America, has been able to create a powerful corporate image.

Sir Richard Branson, Founder of Virgin Group
photo credit: Jarle Naustvik / Flickr

His support of women’s rights and implementation of paid paternity leave have helped creating a raving following for the company. Branson has been able to maintain this following by bolstering his personal brand through activism and writing.

The “CEO effect” has been tested and proven. Your CEO has a ton of influence 0n your company’s image. The CEO of your company may bring a little bad publicity, but they have the power to give a large and sustainable amount of positive publicity. That is why the CEO’s influence on a company’s image is so great. They have the opportunity to further sensationalize a product through activism and positive world change.