Archive for March, 2009

   Our research on online reputation management found that leaders worry a lot about what current and former employees might reveal online about their organizations. Not sure they thought about employees who are offered a job but have not exactly started. One such employee at Cisco may have lost his job in a matter of 140 characters. This poor fellow twittered about having received a job offer from Cisco and deciding between a “fatty paycheck” and commuting to a job he’d hate.  It is unclear if Cisco rescinded the job but we do know that Cisco contacted him pretty quickly and soon afterwards he set his Twitter account to private.  There is now a CiscoFatty.com site to keep this Internet tale alive. As an article on this nefarious event said, this fellow violated the cardinal rule of the Internet which is to never write anything that you wouldn’t want your mom or boss to see. Reputations have been ruined by less than 140 characters.

My favorite line in the article was this: “The Internet is not your BFF.”

 I could not help but notice in today’s The New York Times  that these individuals were all men. These banking chiefs all met with President Obama to discuss the economic recovery and offer their support.  Seeing this photo reminded me of the article I saved from the Financial Times on a survey on how more women in management correlated significantly with lower than average declines in share price.  The author and professor of management at France’s Ceram Business School Michael Ferrary wrote:  “Feminisation of management seems to protect against financial crisis.” He cited  reasoning that I have heard before that women are less risk averse, more consensus driven and value long- term over short-term perspectives. Apparently more women in management helps to balance out the risk-prone behavior of their male peers.  Although the research is confined to the French CAC 40 stock exchange, it does raise a fair question and makes me wonder. Perhaps as financial services companies became a less popular place to work with all the restrictions on compensation and government regulation, we’ll start to see more women around the microphone.

  Regards from Tokyo. I am speaking  later today at the National Press Center on our research on online reputation management that we conducted in cooperation with the Economist Intelligence Unit. Last night we celebrated the 50^th anniversary of the Weber Shandwick Tokyo  office at the magnificent National Museum of Modern Art.  

Our CEO Harris Diamond noted something in  his congratulations speech about understanding the economic crisis that we are all living through.  I thought it  was worth repeating on my blog. He said:  “We can take some comfort from a Japanese poet’s words of wisdom: ‘Since my house burned down / I now have a better view / of the rising moon.”’” The quote is thoughtful reminder that out of crisis rises opportunity. My fellow colleague Tomo said it was haiku. A good one at that.

[Note: Mizuta Masahide was a samurai in the Zeze domain of Ohmi Province. Masahide initially studied haiku first under Shohaku but later became a disciple of the famous poet Basho. In 1688 Masahide's house was burnt down, prompting him to write his most famous haiku Barn's burnt down... This haiku is said to have been highly praised by Basho.]

    As I hear and read more about AIG and the public’s outrage about executive bonuses, I thought back to an incident occurring over a decade ago and which I discussed in my recent book on reputation recovery. Although no crisis is ever the same, AT&T was the recipient of public fury in 1996. The telecom giant announced the loss of 40,000 jobs as part of its restructuring under CEO Robert Allen.  Like most job-elimination announcements back then and even not so long ago, Wall Street welcomed the news and the company’s market capitalization rose six billion dollars in two days. What AT&T did not realize was that this news would also be taken as an assault on the working class. As AT&T’s former Public Relations Officer Dick Martin explained in his terrific book Tough Calls, the layoff announcement came during Pat Buchanan’s U.S. presidential primary campaign.  Presidential hopeful Buchanan used the layoffs as a symbol of corporate greed and further fueled the public’s prevailing sense of economic uncertainty.  The media soon jumped on the bandwagon denouncing the profiteering of CEOs and decline of the middle class.  The New York Times began a multiple series on downsizing and BusinessWeek issued an entire special issue on economic anxiety.  The most memorable coverage sparked by the A&T announcement was Newsweek’s “Corporate Killers” cover with CEO photos looking like America’s Most Wanted Criminals.

Despite even larger company layoffs than AT&T’s, the entire country took the AT&T news personally and as though it was happening to them.  Even U.S. Secretary of Labor Robert Reich joined the fray: “Does a company have obligations and responsibilities beyond the bottom line?  Does a company owe anything to its workers, its workers’ families, the communities in which it does business?  Managers who balk at executing the judgments of the market may fear with some reason that they will quickly face their own day of reckoning.  And yet, I want to suggest to you that this restricted vision of stewardship may be ultimately disastrous for this country. And it may ultimately harm American business.”

Although AT&T leadership intended to generate positive news that it was taking care of business after its disastrous acquisition of NCR and well-documented runaway expenditures, the public was uneasy about the past recession and weakening employer-employee contract.  Further enflaming the situation, CEO Allen’s job layoff announcement was followed closely by news that he was granted $10 million in stock options.  The public’s rage was inflamed.  As Martin wrote about the convergence of circumstances: “Incredibly, none of us at AT&T had connected the two events, largely because they had actually occurred months apart.  The option grant had been made at the time of the company’s restructuring announcement, months before the size of any downsizing was known.  But their public release within days of each other was starkly insensitive.” Such notorious coverage and bad press may have been prevented if AT&T had better sense of public sentiment at the time of these dual announcements. 

However, as history has repeatedly shown, hindsight is always easier than foresight.

The Conference Board Reputation Risk Research Working Group issued a new report on Reputation Risk. They concluded from the working group and a survey among 148 large company risk management executives that risk management needs to be better integrated into the enterprise risk management (ERM) function. Only about one-half (49%) highly integrate the two.  The report provides insights into how some companies are measuring reputation risk and new tools that deliver on this need. Reputation Institute and Evolve24 are both cited. One of the findings that parallels ours is that social media is gaining traction in the corner suite but many executives are overlooking its risks.  According to the Conference Board report, only 34% of respondents stated that they extensively monitor social networking sites and an even fewer 10% actively participate. As I have said, the good news is that executives are no longer asking their assistants to print out their emails to read but they still have far to go in terms of understanding the new media and making it work for their companies in identifying opportunity and yes, early warning signs.

  Visiting Chicago and arrived at the airport yesterday. Since I had not slept well the night before, I was determined to find a Starbucks on arrival. As I deplaned, I looked around for the baggage handling and exit signs to find the taxi line to get to our Weber Shandwick office. I looked up at those airport signs when I left the plane – you know the ones with the suitcase identifying where baggage handling is along with gates and terminals — and among those icons at ceiling height was one for Starbucks. It was the green and white Starbucks logo. I thought that maybe I was seeing wrong since there was no icon for any other food outlet.  I scrunched my eyes to see the sign more clearly and followed it.  It was the Starbucks logo and I was soon standing in line for a Pike’s Place. I was delighted since caffeine was my drug of choice at that early hour. Thought it was interesting how Starbuck’s reputation could be so pervasive in our culture that it had its own airport sign for travelers. When I return later today, I am going to look for one for McDonalds.

Thought I would pass on a good article on defending your personal online reputation. It appeared in Portfolio this month — you know, the one with Bernie Madoff on the cover. Hard to get that picture out of your mind once you have seen it. The article, Slimed Online, by David Margolick provides an arresting story on cyber-bullying by anonymous assassins who went after two Yale law students. The frightening tale is about an online site called AutoAdmit, a web site visited by law students who in addition to real conversations also has visitors who seem to get their kicks out of tormenting (a mild word) women peers through no-name posting. There are many of these web sites and backstabbers out there so this is just one story about the harm it can do and how reputation-damagers can find themselves in the spotlight too if they don’t watch out. Several online reputation defense companies are mentioned to help you if you are in trouble and being smeared: Reputation Hawk, ReputationDefender and several others that work to bump up the good and bury the bad search or site mentions (eVisibility, Converseon, 360i). The two women are suing AutoAdmit to “unmask” the reputation bandits who have done so much personal harm. Ultimately what you learn is that the law does not provide much protection. Kudos toReputationDefender for taking this on for free.

As the economy sinks and more CEOs and employees lose their jobs, someone needs to ask where all the corporate role models have gone?  I think about the answer to this question often. Have all those most admired, most respected, most responsible, most innovative, most diverse, most wealth-creating, most accountable and most valued companies vanished or are they simply waiting for someone to rewrite the rules for reputation-building today? 

Reputation has become deeply entrenched in our global conversation. It was not always that way. Since 2000, reputation mentions have grown 88% in the top tier global media.  Reputation specialists are now in great supply. “Reputation expert” numbers over 25 million hits in search engines compared to 10 years ago when they could be counted on one hand.  Reputation rehab is growing more popular and populated these days. Ousted former Merrill Lynch CEO John Thain just entered treatment for handing out nearly $4 billion in bonuses to ex-colleagues and sprucing up his office for $1.2 million. Now defunct Lehman Bros. CEO Richard Fuld never passed the 12 step regimen without an apology and fraudster Bernie Madoff’s detox is beyond hope.  Royal Bank of Scotland’s former bosses were given a 10% discount for at least admitting that the takeover of ABN Amro was a “bad mistake.”

As business leaders hit new reputation lows, most pundits or reputation experts are finding it more difficult to name companies to “best of” reputation lists.  So what’s around the corner for reputation repairers looking to mend the good names of companies and CEOs?  Here are three suggestions for rebooting reputation over the next 12-to-18 months:

First, as companies continue to announce layoffs, reputations will be built and destroyed on how well job losses are communicated and how fairly the process is handled. In recent years, corporate responsibility had come to mean how workers in emerging markets are treated in the production of company goods and services. In the months ahead, reputations will be built on how transparent and fair leaders are in treating their employees and particularly now, in communicating workforce reductions.  As one recently departed and highly distraught employee posted on www.firedfornow.com:  “On a Wednesday I received an e-mail from my boss ordering me to fire one of my subordinates. I spoke to her on Friday morning – it was painful and horrible. On Friday afternoon my boss fired me! What an a**!!!!!!!!”  In defense, leaders might want to take note of Starbucks’ founder and CEO Howard Schultz’s straightforward employee memo on upcoming layoffs and store closings.

Second, reputations built on safety will rise in importance. Consumers, vendors, legislators and other stakeholders will want to know how safe a product is before buying, flying or eating it.  The public will want assurances from companies that they are taking the necessary precautions to safeguard their physical and psychological safety. Investors will want guarantees that that their money is out of harm’s way.  Talent will find ways to determine whether boards have secure risk management systems in place.  Citizens will not stand for government agencies that are lax in their inspections or are in cahoots with industry leaders.  As I see it, safety will replace innovation as one of the most important elements of a good reputation. Risk is out, security is in.

Lastly, companies that listen and engage employees and customers online will be tomorrow’s reputation kings and queens.  Our recent research on managing reputations online among global business leaders found that word-of-mouth is an essential reputation ingredient today, ahead of financial performance, talent and corporate responsibility. CEOs are woefully stuck at the Web 1.0 level and need to embrace Web 2.0 social media tools to spread their company’s merits far and wide. Companies that reach out to bloggers and posters with solutions to problems will prevail.  As Dell CEO Michael Dell said after his computers were famously maligned online, “I’d rather have that conversation in my living room than in somebody else’s.”  Giant retailer Best Buy’s bottom-up internal social networking site lets store employees have their own Facebook-like profiles, create wikis, initiate topics of conversation and discuss Best Buy policies.  Management does not always have to go beyond its own four walls to learn first-hand how it is doing and what needs to be fixed.

No doubt about it. Reputations will fluctuate radically in 2009 but rebound slowly in 2010. How to manage that rebound is just now becoming clearer.  Reputation experts like me have their work cut out for them.

My colleague Irene in The Hague where I visited last week asked me if I knew about this passage in the movie Devil Wears Prada where they mention a person named Leslie who apparently was going to help repair Miranda’s reputation. I did not know of this although I saw the movie. When she showed it to me, I laughed. It is rare to hear my name mentioned in a movie and even rarer for me to work with celebrity fashion editors.

Miranda Priestly: Stephen isn’t coming.
Andy Sachs (Anne Hathaway): Oh, okay. So, then I don’t need to fetch Stephen at the airport tomorrow?
Miranda Priestly: Well, if you speak to him and he decides to rethink the divorce, then yes. Fetch away. You’re very fetching, so go fetch. And then, when we get back to New York, we need to contact Leslie and see what she can do to minimize the press on all this. Another divorce, splashed across page 6. Just imagine what they’re going to write about me: “The Dragon Lady, career-obsessed. Snow Queen drives away another Mr. Priestley.” Rupert Murdoch should cut me a check for all the papers I sell for him. Anyway, I don’t really care what anybody writes about me.

Blizzard of cities. After I last wrote in Barcelona, traveled to Munich, the Hauge/Amsterdam, Brussels and Geneva. Finally back in New York. Barely had time to blog so catching up with my travels now. Each meeting raised different items about online reputation management: How do you manage when you are getting 2, 500 Tweets per day? Should CEOs blog? What do you do when a bad bad bad blogger posting is among the top five hits on Google? How do you manage online reputation management when senior management does not see the ROI?  Why are senior executives less worried about their professional reputations than their corporate reputations? Should CEOs Twitter? How do you convince your senior management that online reputation management is important to follow? What’s ahead three years from now?  Financial institutions have legal restrictions that prevent them from disclosing too much information, what choices are there? Interestingly, no one questioned the value of reputation online or offline. I guess they would not have attended our discussions if they did. But no one mentioned that their CEOs were disbelievers. What became clear is that there are no set in stone rules of engagement when it comes to online reputation management. Just like crises overall, the best prevention is preparation. 

In each meeting, I asked people how many people had sent an email to someone by mistake. Nearly everyone raised their hand. Confirms our finding that 87% of senior executives have sent an email to the wrong person or received one not intended for themselves. I also asked how many had social media profiles in sites such as Facebook. The majority raised their hands. Twitter was the dividing line where there were some haves and have-nots. 

Few things worth mentioning now that I am back in New York. Fortune came out with its World’s Most Admired Companies survey. They have consolidated the two versions – America’s Most Admired and World’s Most Admired — into one World’s Most Admired.  Senior editor Geoff Colvin’s article quoted me saying that “The leader still makes or breaks a company’s reputation – we should never forget that.”

Caught up on some reading about managing in a recession by managment guru and writer Jim Collins. He mentions a few important factors that keep some companies great and some….not so great or ungreat (not a word I know). Here are a few interesting thoughts to keep in mind as companies pursue the most admired mantle in these mean times:

• The more challenged you are, the more you have to have your values.
• If’s there’s a storm on the mountain, more important than the plan are the people you have with you.
• Turbulence is your friend.

When I came through Immigration last night (early this morning European time), the guy checking my passport said to me, “hey lady, tell your boss you need a rest.” I’m taking a nap.