reputationXchange.com

   At Grand Central, I bought a copy of the latest Fortune  with the World’s Most Admired Companies survey in it. I was checking out the feature because I found it easier to look at the list in the magazine than online.  As I looked at the new design at Fortune (bravo! love the paper quality) and came across this article by Geoff Colvin who wrote about how Most Admired Companies value their employee cultures. He says that the “top dogs” are great examples of companies that do indeed treat their employees as their finest assets. A few insightful details about the winners and losers in the Great Recession:

• Most admired companies (industry champs or the top three in each industry) laid off fewer people in the past two years compared to less admired ones (10% vs 23%)
• Most admired companies were less likely to freeze pay or hiring compared to less admired ones
• Most admired companies were much more likely to invest in employer branding, more so than marketing in fact,  compared to less admired ones

As Colvin sums it up, Most Admired companies understand that people are their most valuable and most enduring asset and not an expense. I bet they correlate highly with Fortune’s Best Places to Work too.

As you may know if you follow this blog, Weber Shandwick took a deep look at where executives of the world’s most admired companies spoke in 2009 compared to earlier years. The analysis  (Five Star Conferences) showed that executives are ramping up their speaking engagements in an effort to get their messages out and narrate their company stories. At Weber Shandwick, we have a group dedicated to executive engagements that ultimately help boost and solidify company reputations. They are called our Global Strategic Media Group and they do fine work, including the analysis just mentioned! Since my days at Fortune, I have always been fascinated by executive conferences so it is a continuing interest of mine. Executive speaking is definitely one tool in the reputation tool box just like awards and scorecards, among other things.

We thought it would be equally interesting to see what executive communications professionals think about the executive conference scene and teamed with Vital Speeches and David Murray to query this segment. If you are an executive communications professional or executive speechwriter that positions CEOs and other C-level executives at top tier executive conferences, please take several minutes to answer this survey. We would greatly appreciate and will share the results once they are in!

“Integrated reporting is now the holy grail in corporate public disclosure,” says John Elkington, co-founder, SustainAbility. Well, the time has arrived for corporate reporting that integrates financial performance and non-financial information such as environmental, social and governance issues. Integrated reporting is the subject of Harvard Business School Senior Lecturer Robert Eccles’ new book, One Report: Integrated Reporting for a Sustainable Strategy (John Wiley, 2010). According to Professor Eccles, there are only a handful of companies in the world that practice integrated reporting. To learn more, check out their web site. The idea behind integrated reporting is much more than a static paper document or PDF. It’s a web-based approach that makes strategic use of Web 2.0 tools and technologies to enable users to do their own analyses. This may just be the corporate reporting standard of the future. Integrated reporting as described in Eccles’ new book offers several benefits….such as deepened engagement with stakeholders, improved corporate governance and communication of performance with “ONE” conversation. Just imagine, one conversation to share your reputation.

  Rankings are moving up in this world. I noticed the statement from Fortune in their recent announcement on the World’s Most Admired that they received their best response rate in history. Hmmmm.  After years of falling response rates, what’s the deal here? And this week my colleage told me that the entries for Ethical Corporation Awards were delayed by a few days because of the outsized volume of entries. Is this a trend? Are these rankings rising in importance because what’s better than having an independent third party saying you are #1? There is definitely a trend here worth watching.

*** IMPORTANT ANNOUNCEMENT: SHORTLIST DELAYED ***

As a result of the sheer volume of entries for the inaugural Ethical Corporation Awards, we have been forced to delay the announcement of our shortlist.

This announcement will instead take place in the afternoon of Monday 8th March.

So the Fortune World’s Most Admired Companies survey is out. Could there have been a more tumultuous year to measure reputations?

The reputation “stumble rate” is not good. Nearly one out of two (49%) of the world’s number-one most admired companies lost their crowns over the past year in their respective industries. To calculate the Most Admired Companies stumble rate, Weber Shandwick looks at the leader in each industry and matches it against the industry leader from earlier years. Unfortunately, we only have one year’s stumble rate because Fortune changed its most admired methodology one year ago by combining its two separate lists (America’s Most Admired and World’s Most Admired into one list, the World’s Most Admired). For our stumble rate, 2010 industry leaders are compared with 2009 industry leaders and if the industry leader is different, it is defined as a reputation “stumble.” Losing the industry crown is painful. The bragging rights of being named the #1 most admired company in one’s industry in the world is priceless. While reputation loss may now be inevitable, it still stings.
Here are the industries (55 this year) where the previous year’s #1 most admired company fell from its perch.
Airlines
Beverages
Computer Software
Computers
Delivery
Energy
Financial Data Services
Food & Drug Stores
Health Care: Medical Facilities
Homebuilders
Insurance – Life & Health
Medical & Other Precision Equipment
Mega Banks
Motor Vehicle Parts
Pharmaceuticals
Superregional Banks
Telecom
Tobacco
Trucking, Transportation & Logistics
Wholesalers: Diversified
Wholesalers – Health Care

In an article about the list, the writer says “turnover among Fortune’s top 50 All-Stars list this year was just 10%, roughly what it has been for most of the past decade. Seventeen companies have been on the All-Star list since its inception in 2001; more than half of this year’s top 50 have been on the list eight of the past 10 years. That rock-solid staying power is a testament to the lasting value these elite companies have created. And it shows how tough it is to make our All-Star list.” The All-Star list is what corporate raters say are the top 50 most admired from any industry. Interestingly, the majority of the top 50 in 2010’s list are consumer-facing companies such as a Walmart or Best Buy. In fact, less than one dozen companies on the top 50 are what I would call business-to-business. There has always been a bias towards more consumer-specific companies in the top 10, top 20 or top 50 regardless how it was determined. This bias could be because the greatest number of corporate voters are familiar with most consumer-facing companies compared to some of the business-specific companies that are lesser well known and perhaps more regional. A different perspective from Weber Shandwick’s stumble rate but an interesting one as well.

As I mentioned in my last post, I was eager to see the cover of this year’s Most Admired. Would CEOs be on the cover with tears in their eyes over the turbulent past year or would products be featured instead? Maybe Fortune considering featuring a CEO who suffered the most over the past 12-18  months or what about 2009 departed CEOs? I have to say I was surprised. The cover, as seen here, features military leaders! The cover feature is about how companies are employing a new type of leadership – the military. What message does this send if the Most Admired roster does not make it to the cover? Is the Most Admired becoming one of many rankings or is being most admired not as important as it used to be? I doubt the latter because the article also stated, “The financial crisis may finally be abating, but after a year of dramatic ups and downs, there’s little doubt that corporate reputation matters more than ever before. Perhaps it’s no surprise, then, that while entire industries adjust to wrenching changes as the economy starts to stabilize, a ranking of who’s admired and who’s not would have particular import.”

Perhaps no words or pictures could describe what a beating this year has been for many of the most admired.

Fortune’s World’s Most Admired Companies survey comes out tomorrow if I have my information right. Not soon enough. After a year like we just had, it will be sobering to see how the world’s largest companies have fared. Several months ago I wrote that there would be a new world order in the reputation space and I think it has arrived. A number of the world’s golden children will lose their perch atop the golden pyramid of fame and fortune. I suspect too that overall ratings scores will be deflated year over year.  It is hard to be overly enthusiastic about the showing we have seen this year, especially in the minds of  C-level executives doing the ratings. I also look forward to seeing what they choose for the cover. For many many years, we had CEOs grace the cover of Most Admired because they were once popular and received the kudos for a job well done. No longer. The past several years had products as the feature on the cover. Last year we saw Steve Jobs, CEO of Apple, a CEO in a class of his own. Wonder what we will see this year? The good news is that this year’s reputation kings and queens might serve as ground zero for the next few years to come. My general sense is that we are starting over with a reordering of reputation royalty. I look forward to seeing the changes among the most admired, my favorite yardstick of world business. Always something new to ponder.

I recently stumbled over a quote from David Axelrod, President Obama’s chief communications strategist. He said “We need to involve all the other members of the team.” He was referring to the uni-focus on Obama and the need to take some of the 24/7 news cycle spotlight off him by giving his team roles to play in the administration’s strategies. It was a smart statement because it applies to most CEOs as well. Reputation is often driven by the ability of the CEO to build a top bench strength. Not all but several of the top team in an organization need to play supporting roles and build the brand by what they do and say. The chief sustainability officer or chief financial officer, to name two,  can add needed gravitas and thought leadership to a company. Demonstrating that there are successors and that leadership ability is a prime ingredient of a company’s strength helps build reputations. It was interesting to hear Axelrod mention this factor and he makes a good point. It cannot be Obama all the time.

  I was recently in Phoenix, Arizona at a conference on building and protecting reputation. It was hosted by Henkel. My part was to talk about what CEOs should be talking about now. More on that later this coming week but wanted to blog about the talk from Henkel’s NA Consumer Goods president and CEO Brad Casper about working with corporate communications. It was good to hear a CEO talk so positively about the importance of his corporate communications team. Just by taking to time to talk to us at lunch time said boatloads.  Casper said that he believes that there are 6A’s in how a CEO and corporate communications function can work together to establish and build trust. The CEO mentioned that his philosophy was that not communicating was far riskier than communication. His 6 A’s are:

1. Anticipation (knowing what the organization needs to see and hear).  Casper talked about what he did once he agreed to take the job. He was an “outsider” CEO so he was unknown to employees who were dealing with a change in ownership.  He mentioned how the first person he asked to talk to was the head of corporate communications because that person would know best  what he needed to know, how to resonate with employees  and gain traction internally and externally. He was delighted when she showed up with a playbook in hand.
2. Access (making sure that he demonstrated that he was available and accessible personally). To develop that bond with employees, Casper along with corporate communications set up regular lunches with high potentials, monthly town meetings, and an online ABCs (Ask Brad Casper) on the intranet. He also started Breakfast with Brad and had lunch with new employees. Being accessible was one way to create that bond that builds CEO reputation and drives productivity and inspiration.
3. Awareness (to demonstrate that this was a new beginning since they had just been bought by consumer goods giant Henkel in Germany), the CEO and corporate communications decided to bring everyone together to participate on this journey. They rented out a nearby movie theatre within the first 100 days and had all employees attend to hear about the new strategy, hear about the future, create a vision, and help build a bridge between being what was once a U.S. company (Dial Corporation) and the multinational they were now.
4. Alignment (aligning the strategy with the core values and history of Henkel). Casper talked about the resonance of being part of a family. Several generations of the Henkel family had created this Fortune 500 company and this emotional narrative had to be intertwined into the NA Henkel fabric. He used this expression at our conference that stuck in my mind—that they would build their brand not as a company “but as a house.” That has a nice ring to it.
5. Affinity (creating a family atmosphere that is inclusive and engaged with the community). Working with corporate communications, the leadership team worked hard to celebrate innovation, community service and other ways of giving back.  Accidentally as they moved headquarters to a beautiful new building, instead of giving everyone the day off on a Friday as the movers packed up, they decided to give back to the community by having everyone volunteer their time in the community. This turned out to be one very smart way to build that camaraderie that helps bind employees to companies and remove doubt that business is all about the bottom line.
6. Accountability (the CEO is accountable as well as its employees for the company’s success).

Reputation is often said to be greater than the sum of its parts. However, making sure that all the parts work together and are communicated internally and externally builds longer-lasting reputations. CEO communicators can help make reputations stickier and advance a common purpose.

The Center for Marketing Research at the University of Massachusetts Dartmouth just released an interesting study of how Fortune 500 companies are using social media. The investigation was conducted by Nora Ganim Barnes and Eric Mattson. The examination expands on previous research they did in 2008.  There are some many interesting results which I want to share here.

1. 22% of 2009 Fortune 500 companies have public-facing corporate blogs (blogs are defined as company public-facing blogs from the primary corporation –no subsidiaries– that posted within the past 12 months). Another way to look at this finding, however,  is to note that 78% of Fortune 500 companies do NOT have public-facing blogs. Seems like a lot of companies are blog-less although the percentage is rising year over year (from 16% in 2008). Three of the top five Fortune 500 companies had one – WalMart, Chevron and GE.  The researchers also found that companies that have blogs work hard at blogging with frequent postings, RSS and other ways to engage visitors. Once they make the decision to blog, they do it. Companies with blogs came from different industries with the computer software/peripheral, office equipment industry having the most (not surprising) corporate blogs. This industry was followed in rank order by specialty retail, telecommunications, food production, services and drug stores, commercial banks, insurance, semiconductors, IT and motor vehicles.
2. The top 100 of the Fortune 500 companies are more likely to blog compared to those companies that fall later in the list such as 101-200, 201-300, 301-400 and 401-500. The largest companies are evidently leading the way.
3. A large 86% of companies with blogs link directly to a corporate Twitter account. This is three times more than was found in 2008. This demonstrates the rapid adoption of Twitter and social media once a company gets started in social media.  Just looking at how many Fortune 500 companies have corporate Twitter accounts altogether (whether they have a blog or not), the perecentage falls in at 35%. Again, that can be translated to mean that 65% of Fortune 500 companies do not have a corporate Twitter account. Weber Shandwick recently analyzed how Fortune 100 companies use Twitter and suggested that they might be in need of a Twittervention. Seems to be the case.
4. Interestingly, Fortune 500 companies are blogging at a slower pace than Inc. 500 companies (small businesses) – 22% vs. 45%, respectively.
5. Surprising to me was the finding that among those companies with a corporate Twitter account, the insurance industry had the highest concentration.
6. Luckily for those of us who are interested in how companies are using all types of social media, the researchers also looked at how Fortune 500 companies are using podcasts and video on their blog sites. They found that 19% of the 2009 Fortune 500 use podcasts and 31% use video. These are definite increases from 2008.

The authors conclude that there is a “continued steady adoption of blogs” and “explosive growth of Twitter” among the largest 500 companies in the U.S.  Since engagement with stakeholders is a key driver of reputation, the penetration of social media among our largest firms is moving in the right direction. However, there is plenty of room for more companies to join the social media bandwagon and hone their reputations by being more inclusive and engaging.

  As a reputation watcher who gets daily alerts about reputation, I recently noticed that there are fewer alerts about reputation and its ties to SEO (search engine optimization). It used to be that nearly every alert detailed some article or company on how to maximize your reputation by managing search engines better to help lift your reputation.  I do not know why there has been this decline but perhaps it is a widely known secret that many companies and brands have already mastered. Additionally, social media such as Facebook, MySpace and Twitter have rendered search engine optimization more complex and harder to control. I am not exactly sure but it has been on my mind. There were moments in time when I thought that reputation had been reduced to SEO tactics so I am much relieved that my favorite topic is broadening and not narrowing. My next observation is that “personal branding” has become a major theme in the reputation space.

Lately there has been alot of requests for more information on thought leadership. One of the questions I like to ask a company leadership is …what is their “moon shot?” Today I read something that made me think of another question to ask: What’s your oxygen? What is absolutely necessary for you to breathe and thrive in the years ahead?

I am wondering if there are just too many awards out there.  Several major ones were released this week. Are awards becoming commoditized because there are so many? Hard to say but they sure are “good and plenty.” (That’s an expression from years ago. You may not be familiar with it.)

Next week I am speaking at a conference on What CEOs are Talking About Now. More to come.