Emily Tan
Apr 12, 2013

Poor company leadership prompts 60 per cent to stop buying: Ketchum

GLOBAL – In the past year, 60 per cent of people around the world have opted to stop buying, or started buying less, from a company due to poor perceptions of the behaviour of the brand’s leaders, according to a recent study by public relations firm Ketchum.

Poor leadership has a bigger impact than good leadership
Poor leadership has a bigger impact than good leadership

The study on leadership communication was conducted by Ketchum global research and analytics in partnership with Ipsos. At the end of last year, it surveyed 6,000 respondents from 12 markets worldwide, including India, China and Singapore. The respondents were weighted for age and gender to accurately represent the general population of each country.

The report found that, by and large, poor leadership hits the bottom line far harder than good leadership enhances it. More than half (51 per cent) of respondents said they’d buy fewer of a firm’s products and 44 per cent would outright boycott the company if they had a negative impression of the brand’s leaders. Positive leadership, however, prompted only 36 per cent of respondents to buy more and 42 per cent to start buying.

The outlier in this group is India, where consumers are just as likely to be influenced positively by company’s leadership as they are to be influenced negatively. In the past year, 56 per cent of Indians have purchased fewer of a company's products and services and 57 per cent have purchased a company's products and services for the first time based on the behaviour of a company’s leadership.

Corporations should also do more to engage staff as brand ambassadors because respondents viewed employees and third-party analysts as the most credible representatives of an organisation, ahead of senior leaders, with the CEO and other senior management coming in at 6th and 7th place, respectively, from among 12 sources of trustworthy information.

Of the three Asian markets surveyed, China and India lead the world in high opinions of their business leaders, while Singapore is far more cynical. China leads the world with 58 per cent believing their leaders are the most effective in the world, followed by India (49 per cent) compared with the global average of 34 per cent. Only three in 10 Singaporeans believe their business leaders to be effective.

The definition of an effective leader, however, differs from market to market. The Chinese, for example, value inspirational rhetoric and the ability to tell a compelling story as characteristics of effective leaders more than any other country. Respondents from that market also value collectivist attributes such as corporate social responsibility and ethical business practices more than individual attributes. which include customer service, whether the company is a good place to work and empathy in a crisis.

“This year’s data shows a striking link between leaders’ words and deeds, and their customers’ impact on what they are selling,” said Kenneth Chu, partner and CEO of Ketchum Greater China. “At the same time, the fact that employees at large currently carry far greater credibility as company ambassadors than senior management cannot be ignored.”

Singaporeans, on the other hand, value trustworthiness (53 per cent compared to 48 per cent globally) as the most important leadership attribute for a company to demonstrate, followed by quality of management (43 per cent compared to 35 per cent globally) and ethical business practices (42 per cent compared to 37 per cent globally).

For leaders to restore confidence during the challenging and rapidly changing times ahead, Singaporeans want them to be open and honest about the nature and scale of the challenge (64 per cent compared to 59 per cent globally) and provide a clearer overall vision for how economies, businesses and other organisations can survive (55 per cent compared to 50 per cent globally).

The world's leaders should also look to the technology sector for guidance. Leaders in that sector enjoyed an overwhelming 14 percentage point advantage over their nearest rivals on leadership prowess. The leaders in the technology industry also come out on top on both communications effectiveness—44 per cent rate those in the sector as impressive communicators—and taking responsibility when their industry falls short, with 34 per cent scoring them strongly.

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