This commentary originally appeared in Forbes www.forbes.com/2009/11/03/oprah-winfrey-success-leadership-managing-secrets.html
Last year, Oprah Winfrey earned $275 million--more than those three Wall Street rogues Ken Lewis, Dick Fuld and John Thain combined--yet no one is calling for her head. Her TV show and O, her magazine, remain wildly popular. She moves entire industries. Twitter's traffic surged 43% after she tweeted for the first time. A recommendation from her turns obscure authors and products into best-sellers.
On her way to becoming one of the most influential people in the world, Oprah has helped millions of people feel better about themselves and lead more fulfilling lives. Here are three core business reasons she has become one of the world's richest people.
She truly understands and relates to her core target market.
Oprah genuinely sympathizes with her audience's struggles and aspirations. She does not pretend to have led a fairy-tale celebrity's life; rather she has revealed that she was sexually abused when growing up and has been candid about her battles with her weight. She uses real, shared pain to get closer to her audience. As she conquers her demons, her audience feels they can conquer theirs.
They trust her. She is more than a talk show host. Too many people in charge of brands don't get the importance of understanding and relating to consumers. Companies launch advertising campaigns that consumers can't identify with, even as those consumers, looking to stretch their dollars farther than ever before, yearn to turn to companies they feel they can trust and connect to emotionally.
Skin care company Clarins got it all wrong in targeting Chinese men. It used ethnically diverse metrosexual models they couldn't relate to. The company failed to understand that Chinese men don't want to be seen as at all feminine or exotic. Nor do Chinese women want to see their men that way. Sales sputtered, while L'Oreal's Biotherm line prospered with Asian models who came across as the epitome of masculinity.
Another company that successfully relates to consumers in its marketing is Unilever.. Its Dove Campaign for Real Beauty employs as models everyday women with all sorts of body shapes and sizes, not the airbrushed waifs who grace the covers of fashion magazines like Vogue and Elle. People buy Dove's products because they identify with the familiar yet beautiful women who use the products in the ads. The five-year-old campaign has been one of the most successful of all time.
She knows that making the world a better place and earning money is not a zero-sum game.
Whether inviting experts like Dr. Mehmet Oz to give health care advice or giving suggestions on how to find happiness, Oprah does what she does to make people's lives better. That is true leadership. She clearly is unwilling to do anything for money alone. She takes a moral and long-term perspective--and that way, she makes even more money.
Far too many are driven by simple greed. Too many senior executives have enriched themselves at the expense of front-line workers and shareholders. Too many unscrupulous executives have engaged in financial chicanery like backdating stock options. Not only are Main Street and Congress up in arms, but large institutional investors like the California Public Employees' Retirement System have begun to use corporate responsibility as a key metric in investing. Last year CalPERS publicly called out five corporate underperformers, including Cheesecake Factory and La-Z-Boy, citing corporate governance failures. It is pushing to implement provisions to claw back the compensation of executives who engage in illicit activities.
Corporate boards need to be on alert that misbehavior will hurt their stock prices. CNBC's Jim Cramer publishes his Wall of Shame for disappointing CEOs, like United's Glenn Tilton, who made $17 million over the last five years, and more than $6 million in 2008 alone, while United's share price dropped around 40% and the pay and pension of its front-line workers was slashed.
Nobody thinks of Oprah as greedy.
She understands how to honestly leverage her brand.
With profits falling almost everywhere, businesses need to find new sources of growth. Oprah understands this well. Her work with Dr. Phil and Rachael Ray has resulted in successful spinoffs that hold true to and extend her core value of helping people.
For corporations, leveraging a brand can mean looking to new markets, as GM and Barbie have done in China (as I wrote in "Barbie Goes to China"), or it can mean branching out into new product lines. For instance, Giorgio Armani has expanded the scope of its business to include household accessories. Bulgari and Versace have moved beyond jewelry and clothing, respectively, into high-end hotels. Such expansions make sense, for they are being done so they dovetail with the brands' core emphasis on luxury, sophistication and exclusivity while opening up new streams of revenue.
Oprah has energized an entire industry by staying true to her ideals. She reminds us that business can be done ethically and profitably at the same time. Too many executives over the last few decades have acted immorally, scammed the system or even engaged in outright thievery, like Jeffrey Skilling at Enron. The most successful enterprises--individual and multinational alike--are the ones that create emotional bonds with their customers, stay true to their core and use their brands and ideals to lead.
Shaun Rein is the founder and managing director of the China Market Research Group, a strategic market intelligence firm. He writes for Forbes on leadership, marketing and China. For more from Shaun Rein, click here.