Current and future CEOs voice optimism despite underlying concerns.

usinesses are growing. So say hundreds of CEOs from our community of leaders who par-ticipated in our seventh annual NYSE Euronext CEO Report. In

addition to CEOs of NYSE Euronext companies, this year’s survey for the first

time polls more than 100 CEOs from “emerg-ing companies” (up-and-coming firms, most backed by private equity or venture capital) who are stimulating change in business and society. We also surveyed aspiring corporate leaders — some 200 MBA students and recent MBA grads. Together, they comment on the pressing topics of the economy and growth, the

workforce and job creation, innovation, social media, and brand and reputation management.

The groups agree on their concerns regard-ing protectionism and trade issues, as well as financial and political stability. Regulation and taxes draw their fire, and many worry about our global education systems. Yet their perspectives diverge when it comes to doing business in the future, particularly on the topics of social media and innovation.

The bottom-line finding is this: Our three generations of leaders and aspiring leaders are getting to growth and overcoming eco-nomic setbacks while maneuvering around the global political and regulatory obstacles.

B

Find more results from the 2011 survey on the NYSE magazine app.

C h a r t s b y t o m m y m c C a l l

s u r v e y C o n d u C t e d b y o r C i n t e r n a t i o n a l o n b e h a l f o f n y s e e u r o n e X t

The

Challenge

CeOR E POR T

NYSE EURONEXT NY

SE MAGAZINE

iPadon

CrowdsourCingsparks

innovation

we arehiring!

(though the economy is still hurting)

FinanCial & politiCal

instability keep us

up at night

The U.S. mUST geT a handle on

taxes

GrowthproJeCtions

Reputation is everything

Educationneeds improvement

Regulation is a maJor ConCern

we want better roi From our

Brands Visionis the no. 1 quality

a Ceo needs

T H E E C O N O MY & G R OW T H 1 8 | W O R K F O R C E & J O B C R E AT I O N 2 0 | I N N OVAT I O N 2 2

S O C I A l M E d I A & d I G I TA l S T R AT E G Y 2 4 | R E P U TAT I O N & B R A N d M A N AG E M E N T 2 6

social Media will Rule

Mexico

Australia andNew Zealand

Brazil

Canada

China

EasternEurope

India

Japan

South America(except Brazil)

SoutheastAsia

MiddleEast

United States WesternEurope

34/33

19 /1630/28

43/3429/30

28/32

66/79

32/45

63/52

23/19

37/23

16/10

34/27

42/60

33/51

34/3542/47

36/41

25/64

54/5081/82

77/68

52/46

34/3939/57

48/4082/74

42/35

33/47

40/62

48/6245/47

27/41

58/6561/54

65/6574/65

80/73

44/49

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David Johnson, CEO of seven-year-old Achates Power Inc., expects that a world looking to conserve energy will embrace his San Diego-based company’s efficient engine design. But he admits that “economic uncertainty may cause our customers and prospects to be more cautious, to pre-serve their capital and to move slower. This, in turn, would make it more difficult for us to secure new business and cause us to adjust our growth plans.”

Johnson is hardly alone in his concern about the future. Even as most companies prepare for growth, CEOs express worry over not just the economy but also protectionism and trade restrictions, financial and political instability, regula-tion and taxes. In fact, six out of 10 listed-company CEOs who participated in the 2011 NYSE Euronext CEO Report expect the U.S. to have an unfavorable corporate tax envi-ronment during the next three years.

Current and future business leaders also fret about how well educational systems are preparing the next genera-tion of workers, especially in the U.S.: Nearly twice as many CEOs based in the U.S. as those headquartered elsewhere view their country’s education system as fair or poor. MBA students offer solutions. “The global landscape has changed quickly, yet schools still focus on standardized testing and a curriculum that does not keep up with the times,” says Sean Donnelly, a Fordham University MBA student with a concentration in international finance.

Vlad Karas, who is studying innovation and technol-ogy management at the Polytechnic Institute of New York University, hopes schools will do more to stimulate creativity: “Kids should not be afraid to take chances and play with new ideas, new concepts and creative thinking — this is what will drive innovation for the next generation.”

GROWThTRAPS

regional ConCerns

Protectionism, political stability and financial stability give respondents concern regarding specific regions — particularly in the U.S. and in Europe.

PERCENTAGE OF CEOs WHO HAvE CONCERNs REGARdiNG THE FOLLOWiNG COUNTRiEs

CEOs and future leaders diverge on many issues yet share these mutual concerns.

Source: ORC International for NYSE Euronext

� For more thoughts from emerging leaders, and to see how your opinions stack up against our respondents’, get the Q4 issue on iPad. To see how our research was conducted, visit nysemagazine.com/methodology.

*Some items may not add up due to rounding

PERCENTAGE WHO THiNK THE FOLLOWiNG COULd iMPACT GROWTH

growth inhibitors

Beyond the economy CEOs worry that regulation, inflation and rising costs are among conditions that could hinder growth.

Listed-company CEOsEmerging-company CEOs

Strongimpact

Someimpact

U.S. economy

Mexico

Australia andNew Zealand

Brazil

Canada

China

EasternEurope

India

Japan

South America(except Brazil)

SoutheastAsia

MiddleEast

United States WesternEurope

34/33

19 /1630/28

43/3429/30

28/32

66/79

32/45

63/52

23/19

37/23

16/10

34/27

42/60

33/51

34/3542/47

36/41

25/64

54/5081/82

77/68

52/46

34/3939/57

48/4082/74

42/35

33/47

40/62

48/6245/47

27/41

58/6561/54

65/6574/65

80/73

44/49

nysemagazine.com 17

KEY

Listed-company CEOsEmerging-company CEOs

Financial stability

Political stability

Protectionism or trade restrictions

17/5

26/21

19/16

20/22

18/22

21/26

34 / 15

21/41

32/35

9/18

6/21

60/59

46/48

PERCENTAGE OF CEOs WHO HAvE CONCERNs AbOUT THE TAx ENviRONMENT iN THE FOLLOWiNG COUNTRiEs

United States

Western Europe

Japan

South America (except Brazil)

Brazil

Mexico

India

China

Canada

Eastern Europe

Australia & New Zealand

Southeast Asia

Middle East

taX environment

U.S. corporations face an unfavorable tax outlookduring the next three years, according to 60% of listed-company CEOs and 59% of emerging-company CEOs. The nearest rival? Western Europe, cited by 46% and 48%, respectively.

LISTED CEOs

EMERGING CEOs

MBAs

46%

55%

49%

eduCation systems

About half of all respondents indicate that their country’s education system does only a fair or poor job of providing students with the skills to succeed in the workforce.

PERCENTAGE WHO sAY THEiR COUNTRY’s EdUCATiON sYsTEM is FAiR OR POOR

Fair

Poor

Fair

Poor

Fair

Poor

39

10

43

12

35

11

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A New energyBlueprintRoyal Dutch Shell’s CEO hopes to lead in an industry that is undergoing seismic change.

hen Peter Voser, 53, took over from the retiring CEO of Royal Dutch Shell PLC (NYSE: RDS.A, RDS.B; NYSE Euronext: RDSA, RDSB)

in 2009, he set a goal to make Shell “the most competitive and innovative energy company in the world.” But before the former CFO could turn his full attention to reshaping the company for a world where energy demand would inevitably increase, supply would shrink and tighter environmental regu-lations would come into play, he had to scale a stone wall. “Shell and its competitors faced the unprec-edented challenge of building a more sustainable energy system while responding to the worst eco-nomic downturn since the 1930s,” observes Voser.

Even as he made bold bets on the future, Voser began reducing expenses through a combination of flatter structures in Shell’s senior management team, faster decision-making and simpler ways of working. The company also sold noncore assets, including some European and African downstream operations, using much of the proceeds to shore up higher-margin businesses and maintain R&D levels through the worst of the downturn. “Current eco-nomic challenges aside, energy remains a long-term business,” says the CEO, who points to estimates that fuel needs are poised to soar. The International Energy Agency expects China, India and Brazil to

double their energy consumption during the next 40 years, meaning that these three economies alone could account for a third of global energy consump-tion — on top of continued existing demand.

Voser estimates that Shell will invest more than $100 billion globally between 2011 and 2014, with a target of raising its production by 12 percent from 2010 levels to 3.7 million barrels of oil equivalent a day, one of the fastest growth rates in the indus-try. “Whereas much of the world is still drawing up plans, we are doing what we can today to make a difference,” says Voser. “That means producing more natural gas, focusing on biofuels, helping to develop carbon capture and storage technology, and trying to improve energy efficiency in our operations.”

When it comes to renewables, Shell has shifted most of its attention to biofuels, especially through Raizen, a joint venture with Cosan Ltd. (NYSE: CZZ), a processor of Brazilian sugarcane. The venture is developing what Voser says is the lowest-carbon biofuel commercially available: ethanol that can reduce CO2 emissions by around 70 percent compared with standard petroleum. Raizen’s blue-print calls for more than doubling annual production to 5 billion liters of sugarcane ethanol in the next five years from about 2.2 billion liters in 2010.

the end oF an eraBut Shell isn’t putting aside its focus on its tra-ditional hydrocarbon products, although Voser warns that “the era of so-called easy and cheap oil and gas is over.” With that in mind, Shell expects to increasingly explore challenging environments, such as the Arctic. Nearly 200 miles off the coast of Brazil, the company is drilling in pre-salt areas — so named because the reserves are trapped beneath a geological cap of impermeable salt that restricts the oil from pushing up.

s h e L L

JUST THE FACTS

HeadquartersThe Hague, the Netherlands

Revenue$368.1 billion (fiscal 2010)

Market cap*$228 billion

Employees93,000

Listed sinceJuly 20, 2005

*As oF 10/17/2011

withpetervoser

COUR

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UTCH

SHE

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85% 96% 75%

76% 84%

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Compared with last year, we’ve made progress: Fewer listed-company CEOs (85 percent) rate the global economy as fair or poor, compared with 96 percent in 2010 and 99 percent in 2009. And more are planning for growth, despite significant concerns about protectionism (particularly in China) and financial and political stability in many regions — including the U.S. and Europe. CEOs of listed companies are budgeting larger increases for capital expenditures, energy and regulatory compliance, while emerging-company CEOs — those who head businesses backed by venture capital or private equity — are spending more for R&d, technology, marketing and PR.

Part of Shell’s R&D budget is used to develop sophisticated computer systems that help geolo-gists identify hidden reservoirs more accurately and thus place drilling rigs more precisely. Technology also has enabled Shell’s shift from oil to natural gas, which by next year will represent more than half of its production, says the company. Noting that natural gas plants emit up to 70 percent less CO2 than old coal-fired plants, Voser says: “North America now has enough gas reserves to last for the next 100 years, thanks to discoveries of gas trapped in dense rock — tight gas — and new production techniques.” With tight gas and shale gas potential elsewhere, he cites the International Energy Agency in noting that “the world has enough gas for 250 years at the current level of production.”

Shell is also developing procedures aimed at cleaner energy. For example, the company has filed more than 3,500 patents that apply to the Pearl Gas-to-Liquids (GTL) project, which opened in June in Qatar. This plant, explains Voser, refines natural gas, turning it into diesel fuel for vehicles, kerosene for aircraft and other products for the chemical sector. Pearl GTL’s water processing plant, the company claims, recovers, treats and reuses every drop of the industrial process’s water. With a capacity to treat 280,000 barrels of water a day, Pearl GTL’s water treatment plant is the world’s largest, comparable to that for a city of 140,000, according to the company.

While mapping out a new energy blueprint for Shell, Voser is counting on something that might be the biggest challenge of all: collaboration. To meet growing energy needs, “we need to bring together scientists, urban planners, businesses, governments and society to develop policies and solutions,” he says. Voser is optimistic. “The human race has faced many challenges in the past and surmounted them with ingenuity and creativity.” — Susan Caminiti

GREATEXPECTATIONS

Whereas much of the world is still drawing up plans, we are doing what we can today to make a difference.”Peter Voser CEO, ShEll

Although they still consider the global economy fair at best…

…most CEOs are planning for growth. Two-thirds of listed-company CEOs and more than four in five emerging-company CEOs expect growth in their own companies.

PERCENTAGE WHO THiNK THE ECONOMY is FAiR OR POOR

PERCENTAGE OF CEOs WHO ExPECT GROWTH

Fair Poor Fair Poor Fair Poor

LISTED CEOs MBAsEMERGING CEOs

LISTED CEOs EMERGING CEOs

Modest growth

SignificantgrowthSignificant

growth

Modest growth

DeclineDecline

GoodGood

Good

Excellent

No changeNo change

61% 56% 40%24% 48% 27%

46%30% 45% 39%

6% 5%18% 12%

6% 19%4%

15%

� To see where executives are allocating the largest budget increases, check out nysemagazine.com/chartindex or visit the NYSE magazine app.

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Staffing UpSiemens identifies two growth drivers: globalization and demand for modern solutions to infrastructure, health care and energy needs.

lectronics and engineering con-glomerate Siemens AG (NYSE: SI) already has 421,000 employees in 1,640 locations around the globe. Yet with a new worldwide focus on in-frastructure, health care and energy

solutions such as wind power, the company is creat-ing more jobs. President and CEO Peter Löscher says it’s a case of identifying opportunities — even in tough economic times for some of Siemens’ key markets — and directing the company’s resources accordingly. “We laid the foundation for eco-nomic growth quite a while ago by addressing the megatrends of demographic change, urbanization, climate change and globalization,” says Löscher, 54. “The current economic crisis didn’t catch us un-awares. We never let up during the recession, which has helped us come out of it relatively unscathed.”

As a result, Löscher says, today the company is a “pioneer in energy efficiency, industrial productivity, affordable and personalized health care, and intelli-gent infrastructure solutions.” Being a leader in those fields, he says, contributes to a reputation that draws a dedicated workforce from around the world.

In fact, Siemens created more than 16,000 jobs worldwide in the first nine months of fiscal 2011 as Löscher pushed the company in new directions and into new markets. A native of Austria and a former pharmaceutical industry executive whom Siemens recruited in 2007 as the first outsider to head the company in its 164-year history, he has taken a far more global perspective than some of his predeces-sors, perhaps owing to stints in locales as diverse as Japan, Spain and the U.S. (He also studied at The Chinese University of Hong Kong.)

Löscher believes that adding diversity to Siemens’ workforce is crucial to its ability to grow in new geographic and sector markets. “We need to cre-ate great, diverse teams made up of people who believe in the company’s totality and have the right passion,” he explains. “At the end of the day, there must be chemistry.”

a u.s. pushSiemens is particularly interested in growth in the U.S., where it already employs more than 60,000 in some 100 manufacturing facilities. The company reports “significant orders,” such as a contract to supply Amtrak with 70 energy-efficient electric locomotives, which will create 250 green manufac-turing jobs at three plants. Siemens also is expand-ing an Illinois facility that makes wind turbines and an Iowa wind blade manufacturing plant, together generating some 1,100 jobs.

In explaining why Siemens is spending nearly $200 million to build a gas turbine factory in Charlotte, N.C., Löscher notes: “By manufacturing here, we get proximity to our largest market, highly skilled workers educated at some of the world’s best universities — with access to the best research facilities — and cutting-edge innovation that we can link directly to our manufacturing sites.” That plant, which expects to employ 1,000 people and spur 2,000 indirect jobs, is slated to export gas turbines to markets across the world.

Siemens added around 1,000 new U.S. jobs last fiscal year, taking advantage of a small resurgence in manufacturing and tax incentives. For example, the company, which is investing $2.9 million to expand a smart-grid project in Wendell, N.C., is set

s i e M e n s

JUST THE FACTS

HeadquartersMunich, Germany

Revenue$103.4 billion (fiscal 2010)

Market cap*$87.9 billion

Employees421,000

Listed sinceMarch 12, 2001

*As oF 10/17/2011

CeOR E POR T

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LÖsCHer

COUR

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SIE

MEN

S

E

62%71%

28%

3%

22%

8%

nysemagazine.com 21

despite fears of a sluggish economy, 17 percent more listed-company CEOs than last year expect to add to their payrolls — 62 percent versus 45 percent in 2010. Emerging CEOs were even more optimistic, with seven out of 10 adding jobs. Average increases are healthy: Heads of listed companies hope to boost their workforces by 18 percent and entrepreneurs may up theirs by 34 percent. look for most jobs to be in their home countries, especially in the U.S., Europe and China.

to receive up to $2.6 million in state tax incentives if it meets its goals of creating 139 new jobs.

Yet Siemens frequently finds itself unable to hire enough qualified workers — despite U.S. unemploy-ment rates topping 9 percent. Currently the com-pany is looking to fill more than 12,000 positions worldwide, including more than 3,000 in the U.S. Many of these jobs are for workers that vocational schools used to train when manufacturing employed a higher percentage of the U.S. workforce.

To help qualify would-be employees, Siemens launched an apprenticeship program modeled on its long-standing practice in Germany. The company pays high school seniors an hourly wage to learn a skill, then puts them through a two-year community college. When finished, they have an inside track to be hired by Siemens. Currently the company pro-vides this training to nearly 10,000 young people in Germany, Saudi Arabia, Russia and the U.S.

a powerFul advantageBeyond the U.S., Siemens has doubled its emerging-markets revenues since 2005, Löscher says, and continues to expand aggressively in markets such as China — although he admits that market is becom-ing more challenging as local engineering firms mature. “For many years, we had no serious trouble finding talent,” the CEO says, “but now we compete with Chinese companies seeking graduates as well.”

Yet he says Siemens’ reputation as a global powerhouse gives it an edge when it comes to hir-ing. “We build the world’s biggest gas turbine, the fastest CAT scan and some of the fastest passenger trains,” remarks Löscher. “That’s how the hearts of young engineers get opened.” — Sheridan Prasso

EMPLOyMENT ROLL CALLWe need to

create great, diverse teams. At the end of the day, there must be chemistry.”Peter Löscher CEO, SIEMENS

…with many new jobs slated for sales and IT. Emerging CEos are even more likely to add jobs in sales and marketing.

Despite economic challenges, CEOs expect to add to their workforces through 2012…

CHANGEs CEOs ExPECT TO MAKE TO THEiR WORKFORCE

PERCENTAGE OF CEOs WHO ExPECT TO Add JObs iN THE FOLLOWiNG CATEGORiEs

Engineering HR Marketing Manu- facturing

Finance General management

IT Sales

Adding to it

Keeping itthe same

Reducing it

Listed-company CEOs Emerging-company CEOs

67

50

3733292623

139

� see the NYSE magazine app for a map showing new job distribution.

Listed-company CEOs Emerging-company CEOs

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The Soul of InnovationDavid A. Flynn, Fusion-io’s CEO and founder, adds new efficiency to digital memory.

e’re moving from the information age to the media age,” states David A. Flynn, chairman, president and CEO of six-year-old Fusion-io Inc. (NYSE:

FIO). He points to connected devices like smart-phones and tablet computers, which have shifted the focus from building faster devices to building faster networks. “For example, consider what it takes for a program on your phone to recognize a song and tell you the title, or to do live face-recognition searches on a crowd of people in a security video over a network,” Flynn suggests.

When co-founding Fusion-io, Flynn observed that data centers delivering information to these con-nected devices needed to run more efficiently to meet future demand. So, armed with a BS in computer sci-ence from Brigham Young University and experience in software research and development, Flynn, 42, realized that researchers needed to rethink the basic design of current computers. “We had to eliminate complexity,” says Flynn. “By starting with a clean slate, we freed researchers to ignore the traditional design of computer systems and start afresh.”

ENTER WOZNIAKThat mindset led to a more straightforward mem-ory design using solid-state drives, which helped the startup land $115.5 million in venture capital and prompted Apple Inc. co-founder Steve Wozniak to call Fusion-io’s approach “revolutionary.” In fact, the usually reticent Wozniak was so impressed that he agreed to become the company’s chief scientist in 2008. “The technology marketplace has not seen such capacity for innovation and radical transfor-mation since the mainframe computer was replaced by the home computer,” Wozniak enthused when he announced that he would join the company.

Previously, solid-state drives had been treated like mechanical hard drives, which failed to take advan-tage of the memory chips’ speed. “It was like trying to suck an elephant through a straw,” says Flynn. So rather than simply replacing hard drives with solid-state memory, Fusion-io’s design treats solid-state drives as if they were part of direct memory. The ap-proach means eliminating bottlenecks in the servers and allowing the chips to operate at full speed. “We’re getting rid of the middleman here,” Flynn explains, boosting the performance of data centers by as much as 10 times without having to add more servers, according to Fusion-io and some independent tests.

JUST THE FACTS

HeadquartersSalt Lake City

Revenue$197.2 million (fiscal 2011)

Market cap*$2.2 billion

Employees430

Listed sinceJune 9, 2011

*AS OF 10/17/2011

By starting with a clean slate, we freed researchers to ignore the traditional design of computer systems and start afresh.” David A. Flynn CEO, FUSION-IO

CEOR E POR T

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withDAVID

A. FLYNN

COUR

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FUS

ION

-IO

(2)

W

Very satisfied

Not satisfied (NET)

Somewhat satisfied

LISTED CEOs EMERGING CEOs

VERY/SOMEWHAT SATISFIED (NET

60%40% 50%20%3 0%10%0% %3

87% 87%

nysemagazine.com 23

R&d departments are busy: CEOs of listed corporations are generally satisfied with their company’s level of innovation, and emerging-company CEOs are really happy. Nearly one out of three entrepreneurs and 10 percent of listed-company CEOs plan to up their R&d budgets through 2012. Both groups feel that communicating stories of success spurs innovation, but MBAs also embrace nontraditional catalysts such as hiring a global workforce and crowdsourcing. Non-U.S. CEOs are four times as likely to credit social media as a source of ideas, while U.S. CEOs are more apt to embrace acquisitions.

CATALySTS fOR IdEAS

As more people use more portable devices need-ing even faster access to information, demand from corporate enterprise customers is growing. “We now have over 2,000 clients,” says Flynn, “from Facebook to Wall Street.” Fusion-io reported fourth-quarter 2011 revenues of $71.7 million, up from just $10.9 million for the same period the previous year, and a net income of $5.8 million, compared with a net loss of $11.9 million in the same quarter in 2010.

memory For allFlynn credits an important decision made early on with putting Fusion-io on the fast track: The company would work with all current systems on the market. Because it is agnostic when it comes to different operating systems, says Flynn, Fusion-io’s products have been widely adopted by hardware makers such as IBM Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ). “This is why we have some of the leading operating systems

experts on staff,” says the CEO, explaining that the company’s 430 employees include experts in Linux, Oracle Solaris, Windows and Apple’s OS X.

Flynn says two competing trends will keep Fusion-io humming. In addition to the major shift to cloud computing and the accompanying vast memory storage that requires, he explains, a number of customers are taking back their own com-puter storage. They can do this, he says,

because Fusion-io’s memory systems require fewer servers and thus less overhead. “Essentially,” he ob-serves, “they are creating their own private clouds.”

The company continues to look for ways to squeeze even more performance out of its tech-nology, partly through acquisitions. Using part of the $222.7 million it raised through its June IPO, Fusion-io recently purchased IO Turbine Inc., a software company specializing in using flash memory in virtual memory designs.

Flynn expects Fusion-io’s breakthrough to cata-lyze innovation as improved data-center perfor-mance allows customers to create new services. And he expresses no doubt that other aspects of existing networks need improvement. “Now,” says Flynn, “with processors running at full speed without the memory drag, the speed of Internet connections becomes a bottleneck again.” — John R. Quain

Most are satisfied with their company’s level of innovation…Twice as many emerging-company CEOs are “very satisfied.”

…but the groups express differing views on how best to spur innovation.

Use of external consultants

Generating ideas through crowdsourcing or other social media

Providing employees withsabbaticals to explore new ideas

Providing employees with time to focus on furthering innovative ideas

Employing a diverse global workforce

Acquisitions

New employees

Communicating stories of innovation success within the organization

MOsT EFFECTivE WAYs TO sPUR iNNOvATiON...

Listed-company CEOsEmerging-company CEOsMBA students

22%44%

43%65%

13% 13%

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24 nysemagazine.com

Digital Change AgentHigh-profile media veteran Tom Evans remakes Bankrate for a connected world.

ou can’t fight change,” says Thomas R. Evans, CEO of Bankrate Inc. (NYSE: RATE). “You’ve got to find a way to embrace it.”

For Evans, 56, those words are something of a mantra. In 1998,

after 20 years in print publishing that included serving as president and publisher of U.S. News & World Report, Fast Company and The Atlantic, he became CEO of GeoCities, a pioneer in popular-izing personal Websites. (Evans eventually brought the company public in 1998, and a year later Yahoo! Inc. purchased it.)

Evans was surprised by how much he could apply the fundamentals of print journalism to the Web. He says the skills needed to create content, present it to an audience and match it to an adver-tiser are just as relevant online as they are in the print world — despite what he calls a bias in digital circles against traditional media veterans: “The attitude in the online world is ‘Don’t let any of the old guys in because they’ll ruin it.’” Instead, “I found the new business environment more simi-lar than different — the basics still apply,” he says.

When Evans joined Bankrate in 2004, the brand had roots going back 35 years. The company had built a reputation for delivering reliable, objec-tive mortgage and lending rates through national weekly newsletters and licensing of its content to outside users, such as broadcast and print news outlets. In a shrinking print publishing market with ever-increasing paper costs and declining ad revenues, Evans recognized that the company could reach a much bigger market online. Another advan-tage? “The delivery cost is almost zero.”

But to really make the push into the online world, Evans believed, Bankrate needed to become more consumer focused — without abandoning its core competency. Today, Bankrate’s roughly 360 employees reach 150 million unique visitors per year by amalgamating up-to-the-minute lending

and mortgage information from 4,800 financial institutions in 575 markets in 50 states. Further-more, Bankrate has added information on CD rates, savings accounts, credit cards, insurance, car loans and many other financial topics through a network of sites. To this raw data, the advertising-supported Bankrate adds tools such as glossaries and calcu-lators for refinancing. “We cover 300 different

B a n K r aT e

JUST THE FACTS

HeadquartersNorth Palm Beach, Fla.

Revenue$300 million (2010 pro forma)

Market cap*$1.7 billion

Employees360

Listed sinceJune 17, 2011

*As oF 10/17/2011

I found the new online business environment more similar than different from the print business.”Tom Evans CEO, BANKRAtE

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79% 91% 91%

29%13%

26%18%

16%26%

27%

34%

2%

9%

nysemagazine.com 25

products in 600 different markets and offer 125 different calculators,” Evans says.

The diversification has apparently worked, ac-cording to the company’s 2011 Q2 SEC filing: The $197.5 million total revenues that the company reported for the six months ended June 30 is 172 percent higher than its total during the same period last year. Bankrate’s June IPO raised $300 million. To further Bankrate’s online expansion, Evans says, he deploys these tactics:

• Diversify through acquisitions. Bankrate reports recent strategic purchases of $145 million for CreditCards.com Inc., which lets consumers shop for, compare and apply for credit cards online, and $205 million for NetQuote Inc., which provides information on insurance. The company also bought Nationwide Card Services Inc., which helps financial services firms market credit cards online to consumers and small businesses.

• Don’t just aggregate information — verify and customize it. “Information has to be credible,” Evans stresses. Bankrate independently vets the interest rates and other pricing data that banks and other financial institutions advertise to confirm the rates’ availability. Today’s well-informed consumer would quickly become disillusioned if Bankrate’s information proved faulty, Evans says. The ability to customize information to suit a particular visi-tor’s needs is a big advantage offered by the digital realm, he adds, noting that “everything is inherently local.” A consumer needs to see the best 30-year fixed rates in his area from local lenders.

• Follow digital trends selectively. Bankrate offers smartphone and tablet applications but has kept them simple for now, says Evans, knowing how and where consumers tend to access certain information and recognizing their privacy concerns. “If you’re get-ting a mortgage, you probably don’t want to do that walking down the street,” Evans explains. And while the company notifies consumers about new inter-est rates via its Facebook page, it has not invested in functionality that would, for instance, allow users to share their progress in meeting personal goals, the way a fitness site might. “People are relatively private about their finances,” he says. — John R. Quain

STAyINGCONNECTEdCEOs are becoming increasingly comfortable with the digital realm. Eight in 10 listed-company CEOs single out Websites as their most common source of business information — 89 percent of emerging-company CEOs and 83 percent of MBAs agree. Most executives supplement digital fact-finding with peer conversations and reading print publications, while emerging-company CEOs and MBA students are more likely to access business blogs, Twitter streams and TV. Hefty majorities of all groups say social media will affect the way companies do business in the future and also will play a major role in customer- relationship management, but few have digital strategies.

All three groups expect social media to significantly affect the way they will do business in the future… Emerging CEOs and MBAs are particularly sold on social media.

…yet few CEOs have developed a social media strategy.

are committed to social media use but have yet to implement a strategy

actively use social media and have

a strategy in place

actively use social media but are still

developing a strategy

are not using or exploring social media but may do so

in the future

have no interest in social media

today or in the future

PERCENTAGE WHO AGREE THAT sOCiAL MEdiA WiLL HAvE A MAJOR iMPACT ON HOW COMPANiEs dO bUsiNEss iN THE FUTURE

PERCENTAGE WHO...

LISTED CEOs MBAsEMERGING CEOs

Stronglyagree

Stronglyagree

Stronglyagree

Somewhat agree Somewhat agree Somewhat agree

Listed-company CEOs

Emerging-company CEOs

Disagree Disagree Disagree

38%

53%

31%

48%

43%

48%

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26 nysemagazine.com

Why Branding MattersThe founders of The Knot wedding site say creating a presence that consumers identify with is key to continued success.

ven before Carley Roney and David Liu launched Web portal The Knot in 1996, the wife-and-husband team believed that the brand must be the message. “Without a brand, people can take your business model and

beat you on every level,” says Roney, chief content officer at parent company XO Group Inc. (NYSE: XOXO). “But a brand that rings true is a huge advantage in keeping consumers loyal.”

Indeed, The Knot Wedding Network, which includes the Websites TheKnot.com and Wedding-Channel.com, has attracted nearly 2 million members. Along the way, XO Group has developed The Nest for newlyweds and The Bump for first-time parents. National and local publications, books, social and mobile applications, and television programs deliver the brands by whatever medium brides, new homeowners or expectant parents choose.

To better reflect the expanded role that its brands occupy in customers’ lives, The Knot changed its corporate name to XO Group in June when it trans-ferred its stock listing to the NYSE. This new corpo-rate umbrella, though not its own brand, says CEO Liu, makes it easier to expand with a name that is still unmistakably linked to the happy events of life.

beyond teChnologyLiu and Roney, who met as film students at New York University, credit their nontech backgrounds as the driving force throughout the company’s 15-year history. “At a lot of online businesses, the tech-nology is the most important thing and the brand is often the afterthought,” explains Liu.

To stand out in an already crowded field, Roney and Liu vowed to keep their site cool by address-ing real-life issues. “We wanted to provide wedding advice your best friend would give you as opposed to your mom or the prim etiquette lady,” says Roney.

In planning their own wedding in 1993, the pair had experienced dilemmas that come with a cross-cultural mar-riage, and they knew that other couples were grappling with similar issues and more. “Traditional wedding sites just weren’t addressing second marriages, divorced parents and kids from previous relationships, yet that stuff was happening in the real world,” Roney says.

The partners drew up a list of about 250 names. “The first one we came up with was The Knot,” re-calls Roney. “We kept returning to it because it was edgy and memorable — you know, tying the knot.”

Liu and Roney completely overhauled the concept of wedding publications with The Knot magazine. Rather than randomly placing ads of wedding gowns throughout the magazine, The Knot runs ads alphabetically, with each designer listing the gowns’ price range. “Brides typically buy wed-ding magazines for the gown ads, so why not make it as easy as possible for them?” Roney asks. “Listing prices meant that they weren’t going to fall in love with dresses they couldn’t afford.” Although she says advertisers were skeptical, “once brides began com-ing to their showrooms with pages ripped from our magazine, they knew it was working.”

“Consistency in message and execution is so important when building a brand,” adds Liu. For example, the partners vetoed a weight-loss product advertising deal. “Our Website and magazines have always been accepting of women’s different body types,” says Roney. “An ad like that is simply not con-sistent with what our customers expect.”

Still, a little flexibility in the business model doesn’t hurt. “Our original plan called for launching a new brand every six months,” says Liu, who credits the 10 years it took to build The Knot for the success-

X o g r o U P

JUST THE FACTS

HeadquartersNew York City

Revenue$112.9 million (2010)

Market cap*$259.1 million

Employees605

Listed sinceJune 28, 2011

*As oF 10/17/2011

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withDAvID LIU & CArLeY

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nysemagazine.com 27

ful launch of The Nest in 2005 and The Bump two years later. He says online forum comments on The Knot showed how intensely users wanted informa-tion about the next logical life stages: setting up a home and becoming parents. The branding of these offshoots had to clear the same hurdles as The Knot: to be edgy and slightly off-center. “People have an ‘aha’ moment when they hear The Knot, The Nest and The Bump,” says Roney. “They take a second to get, but you never forget them.”

The company recently launched Ijie.com (which translates to “love knot”) to provide Western inspi-ration and local advice for weddings, relationships and pregnancy for the Chinese consumer. “A genera-tion in China is seeking inspiration from Western brands and wants to reaffirm these very important events in their lives,” Liu says. The pair have also had discussions with investors in India, Europe and South America. After all, adds Roney, “falling in love, getting married and starting a family cuts through all cultures.” — Susan Caminiti

At a lot of online businesses, the technology is the most important thing and the brand is often the afterthought.”David Liu CEO, XO GROUp with

Carley Roney ChIEF CONtENt OFFICER

Nearly all CEOs surveyed view reputation management as part of their overall enterprise risk-management program. That said, most respondents from emerging companies, and more than a third of listed-company CEOs and MBA students, say trust in public businesses is declining. Respondents are split on whether CEOs do enough to protect their companies’ reputations, with six in 10 MBA students saying they don’t. CEOs aren’t overly satisfied with the returns on their brand investments, with just 26 percent of listed-company CEOs and 23 percent of emerging-company CEOs saying the brand’s ROI has met expectations.

LIVING UPTO yOUR NAME

The three groups think trust in publicly traded companies is decreasing…Emerging-company CEos are the most negative.

PERCENTAGE WHO sAY TRUsT is...

…yet most listed-company respondents think CEOs do enough to protect their companies’ reputations. Emerging-company CEos and MBAs don’t agree.

PERCENTAGE WHO THiNK THAT...

35%

20%8%

56%

35%

32%

63%

61%57%

43% 39%

37%

Increasing

Decreasing

Yes, CEOsdo enough

No, CEOs don’t do enough

LISTED CEOs MBAsEMERGING CEOs

LISTED CEOs MBAsEMERGING CEOs

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