When CEOs present their growth strategy to investors and stakeholders, they like to talk about megatrends. Sustainability, urbanization, digitalization – such trends help to argue the company’s strategy. But what if megatrends run counter to the company’s goals? When the company is not only under criticism, but when stakeholders or society question the business model itself – i.e., the "license to operate"?
Two companies that have had to live with massive criticism for years are energy giant RWE and real estate group Vonovia. Both have recognized that they can only secure their business model and thus future success through active stakeholder communication. At the heart of this communication is the CEO, who enters into dialogue with critics as the face and most important voice of the company.
The CEO in stakeholder dialog
Rolf Buch, who has been at the helm of what is now Germany’s largest real estate company since 2013, was for a long time a manager who kept a low public profile with opinion pieces. He began his career at Bertelsmann, where he headed Arvato’s international services business and rose to the Bertelsmann Executive Board. After his move to Deutsche Annington, as Vonovia was then known, things remained comparatively quiet around Buch for a long time. Although he led the company to the stock exchange and increased the housing stock through acquisitions. However, he remained reticent towards the media and the public.
Rolf Buch is one of the few Dax CEOs with a Twitter account. Currently it comes to around 2.400 followers. He posts diligently on real estate topics. One focus: energy refurbishment and climate protection. (c) picture alliance/dpa
But since affordable housing and the role of large real estate companies have become a broad social issue, Buch has changed his strategy. In interviews and appearances, the 56-year-old now presents himself as a socially responsible manager. He called the Berlin referendum on expropriating large real estate companies a "wake-up call" for his industry and offered to limit rents in Berlin. When it comes to climate protection, he set ambitious targets within the group and ties his salary to their achievement. Even critics such as Michael Prutz, co-initiator of the Berlin campaign to expropriate real estate corporations, admit to Buch that he has "a deep understanding of social problems".
Transformation as a Herculean task
The task of Markus Krebber, who has been at the helm of RWE since May of this year, is no less demanding. A "Herculean task," as the "Handelsblatt" writes. For the 48-year-old is to form a green power producer from one of the biggest eminent of greenhouse gases. For more than a century, RWE stood for dirty coal. Just a few years ago, the company was in direct confrontation with climate activists in Hambach Forest. The German business magazine Wirtschaftswoche called the energy company "Fridays for Future’s favorite enemy".
Since the 1. May 2021 Markus Krebber is CEO of RWE. In a recent interview, he called a coal phase-out by 2030 "feasible" if renewable energy development accelerates and gas-fired power plants are added. (c) picture alliance / Reuters
But unlike his predecessors at the helm of RWE, Krebber doesn’t even try to downplay the risks of climate change. Instead, he puts himself at the forefront of the transformation. With the "Growing Green" strategy, he is trimming the Essen-based energy giant for new, sustainable business areas. Krebber wants to invest 50 billion euros in renewable energy and gas-fired power plants by 2030. From climate sinner to climate saver – a transformation could hardly be greater. "Balancing act between coal and wind" is the title of the Suddeutsche Zeitung’s portrait of Krebber.
One is at the helm of Germany’s largest real estate group – and doesn’t want to be seen as a rent shark. The other heads one of the largest emitters of CO₂ and wants to transform himself into a climate savior. Which of the two CEOs is better positioned in the competition for reputation and credibility?
How is your image in public?
Rolf Buch works hard to be perceived as a responsible CEO and manager. For this, he faces up to criticism – even when it gets uncomfortable – from the local newspaper to the big stage at "Spiegel Online". Since Buch is always self-reflective ("We also make mistakes" – "Welt am Sonntag") and expresses understanding for the social consequences of his business activities ("Tenants need have no fear" – "Die Zeit"), he has a positive image despite the harsh criticism of his company. The left-wing weekly "Der Freitag" portrays him under the headline "Man with big plans" – he is "not a rent shark, (…) not a real estate lobbyist," writes the paper. In Unicepta’s image ranking, Buch made it to the top 10 of Dax CEOs several times.
Markus Krebber has yet to build his reputation. In the first interviews with leading media, he presents himself as an accessible and hands-on manager – without tie and suit. "He has the ideal physique for badminton, likes to end up in the hospital after playing with his kids, buys works by Irish artists online and is currently under siege by an activist investor," "Wirtschaftswoche" introduces Krebber to its readers. The RWE boss makes sure to have a positive news in his luggage at every interview. "We want to be climate neutral in 2040", then headlines the "Welt". "RWE wants to go green faster," writes the "FAZ". All this pays off positively for his image.
Who has the better media presence?
In our "CEO Communication Monitor" for 2020, which analyzes the positioning of all Dax and M-Dax CEOs, Rolf Buch ranked 16th in terms of media presence – an improvement over the previous year. However, it continues to struggle with a rather negative tone in its reporting. Buch is heavily involved in Twitter, where he is one of the most active German CEOs (305 tweets in 2020). Few managers know how to generate so much engagement on Twitter. Buch is deliberately not present on other social media.
Markus Krebber focuses his social media activities on Linkedin. From RWE’s new corporate strategy to events in politics and society, Krebber comments on a wide range of topics. More than 6.500 followers counts the RWE boss. At the same time, he is present in the media with interviews – interview in "Spiegel" about podcast appearances with Gabor Steingart or "Wirtschaftswoche" chief Beat Balzli. Krebber’s predecessor Rolf Martin Schmitz was one of the managers with the most media coverage (ranked 20th in the "CEO Communication Monitor 2020"). The new head of RWE is likely to achieve similar results in the future.
Where do they appear?
Whether at the business summit of the "Suddeutsche Zeitung" in Berlin or at the renowned Standehaus meeting in Dusseldorf – Rolf Buch is on the road on the big stages for managers and faces the social debate on the topic of living space. Book discussed at the Economic Council of the CDU as well as at the Business Club of the "Harvard Business Manager" and at the Munich Management Colloquium. Markus Krebber is no less active: The new RWE boss can be seen as a keynote speaker at industry events such as the VIK annual conference or the BDEW congress, as well as at various high-profile conferences on topics such as sustainability and climate protection, such as the Agora energy transition. In the process, Krebber tirelessly promotes his "Growing Green" strategy.
Who advises them?
Communications chief Klaus Markus has accompanied Rolf Buch since Bertelsmann days. In 2013, the Vonovia CEO brought him to the housing group. Markus not only controls corporate communications and PR for the Dax company. He is also the chairman of the company’s own Vonovia Foundation. His main job is to watch his boss’ back in terms of communications. Yet the communications chief himself remains conspicuously in the background: Markus posts neither on Linkedin nor on Twitter and almost never gives interviews in the relevant industry magazines. Have the CEO alone visible as the face of the company. RWE communications chief Stephanie Schunck was already responsible for the CEO image of predecessor Rolf Martin Schmitz and now also controls the public image of Markus Krebber.
Highs and lows
One looks in vain for real low points with Rolf Buch. The Vonovia boss had to start three times before the takeover of the competitor Deutsche Wohnen finally worked out in the fall. In the end, however, it became the Vonovia CEO’s greatest success, as the merger creates a European real estate giant with more than 550.000 apartments. The fact that the German Federal Cartel Office quickly approved the merger and the public discussion was kept in check is certainly also a success of the CEO’s positioning. With the help of Rolf Buch as a responsible manager who is willing to engage in dialog, the Group has succeeded in building a reputation that paid off in the end during the takeover.
The chart shows the quantitative media presence of CEOs online, in print and on social media. Source: Keynote
It is too early for Markus Krebber to pass judgment on its positioning. So far, RWE’s CEO has communicated the energy giant’s strategy shift toward a sustainable future convincingly and credibly. The share price is stable. For the positioning of the new CEO, this is already a success.
Winner in the CEO duel
… is Rolf Buch. Vonovia’s CEO is a prime example of how companies can build a reputation through transparent communication and a willingness to engage in dialog, even in a difficult and often even hostile social environment. RWE CEO Markus Krebber has been following the same strategy so far, using his bonus as the new CEO to kick off one of the biggest transformations in industrial history. Criticism of the companies has therefore not gone away. But both CEOs show how long-term reputation building can contribute to business success.
This article first appeared in the printed edition #HiddenChampions. You can order the booklet here.