Archive for May, 2009

  Not sure it means anything but we thought we’d take a look at whether there are more scorecards/rankings now vs. one year ago. We keep this large, complex and detailed database on which awards exist for companies seeking to be recognized as being the most responsible, best at diversity, most ethical, best leadership, best reputation, best training, etc.  The database looks at when applications are due, when they are announced, who fills out the surveys, how to apply, how popular the ranking  is, etc.  You get it.  The database, called Scoreboxx™, helps companies “credentialize” themselves and communicate how they lead the industry.  It is part of our reputation-building services.

Since we realized it would be next to impossible to determine if there has been a change in the number of scorecards year over year since many scorecards just disappear or just get added randomly, we took a look at response rates to some of the rankings in 2007 vs. 2008. Not a scientific analysis but interesting nevertheless.  Listed below is our brief analysis of some of them for what’s worth.

Some are up and some are down. Some are flat. Here is what Liz, my colleague, and I think. For those awards where recruiting or talent  are important, higher responses have been recorded year over year. More employers returned surveys for BusinessWeek’s Best Places to Launch a Career and Fortune’s Top 100 MBA Employers, more applications were received this year for DiversityInc Top 50 and more nominations came in for the World’s Most Ethical Companies.  It goes without saying that the lower number of respondents for BusinessWeek’s Most Innovative Companies means nothing since this has been a disruptive year for business and some executives were just holding your breath that they were not getting pink slips. And presumably many did.

What does seem interesting is that in a world where companies have stumbled catastrophically and reputational equity has been slipping away, the focus on talent, diversity and ethics might be a good sign of better things to come.

“Do CEOs Matter?” asked Harris Collingwood in The Atlantic. The article begins with a discussion about the anticipated return of Steve Jobs to Apple in June and the impact on Apple’s share price during the past year’s ups and downs regarding his health prospects. Steve Job’s mortality raises the timely question about the value of CEOs in today’s world. Do they matter at all? Collingwood refers to several academic studies and concludes that CEOs do not matter as much as we think and can have as large a negative effect on business performance as a positive one.

Since I have spent quite a while in the CEO reputation area and authored a book, CEO Capital,  on how CEOs build reputation to achieve business success, I have seen equal proportions of studies that downplay the CEO’s impact on financial performance as those that show a sizeable return on a company’s destiny. As the article rightly points out…not all industries are the same — the CEO effect is marginal in some industries where strong government regulation prevails. Does that say alot for all those TARP-supported companies we are now watching. All in all, I firmly believe that CEOs can play a profound role in a company’s future by making the right decisions that shape its long-term growth. We are certainly seeing our new president shape the reputation and future horizon of America Inc.

The article highlights a quote from GE’s CEO Jeff Immelt and apparently confirmed by his predecessor Jack Welch.  Immelt told a gathering sponsored by the Financial Times that in the 1990s, “anyone could have run GE and done well…Not only could anyone have run GE in the 1990s, [a] dog could have run GE. A German shepherd could have run GE.”  Somehow I don’t quite think that is the case but they must know. CEOs may have indeed mattered less in the 90s but there is no doubt in my mind that they matter more now as our world has turned more global, more complex, more imitable, and more transparent. We are being short-sighted if we do not think that the right leader can make a difference most of the time. Not everyone is Steve Jobs but I would not want to work in a world led by mediocre business leaders.

I caught up on some articles I was meaning to read over the long weekend. Here’s one worth noting when it comes to managing reputation online. Since we have extensively researched how executives manage their online reputations, I find everything that makes it easier to do so worthwhile reading. However, I wonder how anyone has the time to do all this and get their jobs done.

Robert Scoble in Fast Company says that “Reputations are created and destroyed online in the speed of 140 characters.”  He is obviously referring to Twitter and the common phrase today that reputation can be created (Susan Boyle) and destroyed overnight (Bernie Madoff). Scoble recommends seven tools available online, of course, for companies to monitor their reputations online. Thanks for the great list.

TweetDeck – the must have dashboard for the Twitter set (free) to determine what’s being said about you in the Twitter and other worlds

Scout Labs – the sentiment and tone in which your brand reputation is being spoken about online (not free)

BlogPulse – taking the pulse on your reputation using keywords and a easy to use charting (free from Nielsen Online)

Vanno – “It’s Digg for reputation.”  (free)

CoTweet – multiple users can tweet from one user name (free) and manage your company reputation

TNS Cymfony – heavy duty tool for drilling deep into your online reputation among stakeholders (not free) (also similar tool from BuzzMetrics)

    Recently reread GE Jeff Immelt’s Letter to Shareholders in its 2008 Annual Report.  A few comments.  I like how GE has a picture of its senior team in the introduction.  It is not the first time but it goes a long way in honoring the team.  I always find GE’s CEO Letters revealing.  The general theme is that GE along with the global economy and business in general have to be “reset” for the long-term and perhaps forever.  “The interaction between government and business will change forever.  In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”  Immelt calls it a reset world. The CEO is resetting the company to focus on three big themes – emerging market growth, clean energy and sustainable healthcare.

One of my favorite parts, of course, came when Immelt discusses GE’s reputation.  Immelt has often mentioned “reputation” in his CEO Shareholder Letters and clearly considers reputation a metric of success.  He said in an earlier CEO Letter (2002): “My own role on the GE Board is clear. I have two functions: lead the company as CEO with integrity, clarity and purpose, as measured by financial performance and reputation.”  This time he said, “Let’s face it: our Company’s reputation was tarnished because we weren’t the ‘safe and reliable’ growth company that is our aspiration. I accept responsibility for this. But, I think this environment presents an opportunity of a lifetime. We get a chance to reset the core of GE and focus on what we do best.”  

When I wrote my book on Reputation Recovery, I had a section on Resetting the Company Clock which came from a statement made by Nissan CEO Carlos Ghosn.  It is the role of the CEO to not only be the company’s reputation guardian but to reset the company clock when crisis strikes, winds shift or people do not recognize the urgency of the day.  The word reset is a good one.

Interestingly, Immelt notes that GE has instituted more scenario planning, presumably to see around corners and a new process to identify what he calls industry “naysayers” who might have something important to tell his unit heads. We call these people “badvocates” but either way, GE intends to listen more carefully than before.

In the last paragraph, Immelt says “GE will be a better company winning through this crisis.” I underlined the word winning.  In recent weeks, I have heard several CEOs use “winning.” Maybe something’s changing.

Since I joined the communications field, I have always been fascinated by the intellectually stimulating and wide variety of activities that comprise communications officers’ jobs. At first, I encountered “you are in the pr field?” when I told people that I left publishing for public relations. I used to oversee public relations as part of my previous job as Marketing & Communications Director at Fortune. Perhaps I have been luckier than most but the field suits me fine because of its expertise in shaping corporate and CEO reputations. Therefore it should come as no surprise that I am very interested in examining the reputation of the corporate communications professional today. As I saw presidential strategists’ David Axelrod and Robert Gibbs shape candidate Obama’s daily messages and actions, I knew that the CCO job might finally be recognized as critical in a 24/7 always open always on marketplace.

Last year we partnered with executive search firm Spencer Stuart on researching the changing role of the CCO (Corporate Communications Officer). Now we are in year two, a more challenging year. What did we learn about the CCO’s job, reputation and responsibilities?  In a time of unprecedented economic volatility, global CCOs have actually seen their “stock” rise over the past 12 months. Just what I predicted. In The Rising CCO, conducted with KRC Research, 58% of global Fortune 500 CCOs now report to the CEO, compared to 48% a year ago. That is a large increase. Not only do more CCOs call the CEO their boss, but 40% of CCOs consider the CEO to be their biggest ally in the organization. This leadership momentum coincides with an increase in CCO tenure: in 2008, CCOs’ average tenure was 65 months, compared to 54 months in 2007. By comparison, the average tenure of chief marketing officers is 28 months, according to research conducted separately by Spencer Stuart. The CCO is definitely on the rise and a greater asset than ever during these critical times.

We also found that experience in crisis communications and issues management is critical to a CCO’s success. It was not always the case when the marketplace was plentiful and everything seemed to be pointed upwards. According to CCOs surveyed, the need for crisis/issues management experience increased 45% since 2007. Additionally, and importantly, CCOs cite social media/blogging as the most frequently added function to their corporate communications departments in 2008, and they believe that social media/blogging will be their most important tool in 2009.

As corporate reputation—anticipated to be the number one communications priority in 2009—endures extreme stress and the Internet provides unanticipated opportunities and risks, skills often “owned” by the CCO are in greater demand: crisis and issues management, social media monitoring and online engagement, reputation management, and management of a complex portfolio of stakeholders such as employees, investors, nongovernmental organizations and trade media.

It goes without saying that CEOs and boards are under tremendous pressure to navigate through the stormy seas of the current economic tsunami. Like never before, CEOs are depending on CCOs for crisis and issues counsel to steady their company reputations and calm stakeholders.  

  A picture is worth a thousand words (or 765.8 billion yen, equivalent of $7.7 billion) in the past quarter. Toyota’s president Katsuaki Watanable is seen here deeply bowing in apology: “We were lacking in scope and speed in dealing with various problems and for that I am sorry.” This is CEO responsibility and accountabilty at its finest.

   Sometimes I wander through Letters to Shareholders from chairmen or CEOs. This might have become a habit when I first began following CEOs and brushing up on companies and their reputations. When I am asked about a company or its competitors, I like to download the CEO Letters and get a glimpse of what is on their leaders’ or founders’ minds. Sometimes a lot of personality and perceptiveness shows through, other times not. So I happened to be looking at the letter from Baron Benjamin de Rothschild of the LCF Rothschild Group and these words caught my eye in its closing:

“I take pride in picturing that, in the next generation, our Group will inevitably be presided over by women, for I have four daughters. Like my mother and like my wife, whose intelligence and support are invaluable to me, my daughters will know better than we do how to safeguard substance. Because women beget life, they find it too precious a thing to gamble with. If I may be allowed to paraphrase Alfred de Musset, they do not toy with love or money.”

As a woman and mother of daughters, I found them full of humanity and sentiment, especially in light of the economic downfall surrounding so many banking institutions. I am confident that the reputation of the Rothschild’s banking empire will be in good hands in the generation to come.

   Over the past few weeks, there have been several reputation rankings released. I am stunned by the proliferation of rankings on reputation. It is getting harder to keep track of whose ranking is whose and what’s behind the numbers. Whereas there used to only be one or two major reputation rankings, today there are scores. We (my team at Weber Shandwick) knows because we keep track of them every day in our database called Scoreboxx.  We must have over 700 primetime corporate rankings that companies can compete on and receive recognition.  These rankings fall into broad categories such as corporate responsibility, workplace, diversity, leadership, etc.  Years ago, a company only had to worry about Fortune’s Most Admired Companies survey. Now you have to be on the alert for lists that give you a thumbs up or thumbs down.

In the past few weeks, we have seen the release of Harris Interactive’s Reputation Quotient,  Reputation Institute’s  Pulse Survey and  Millward Brown’s  Global Brands (BrandZ).  All good and “reputable”  lists. However, they are all coming out at about the same time and comingling in people’s minds.  Years ago when I was at Fortune, we conducted a landmark survey about business readership of business magazines. A few years later, Forbes conducted their  own readership survey of business magazines with a twist that confused the marketplace. The two surveys were similar but because many people still confused Fortune and Forbes, Fortune’s competitive advantage was weakened.  

My reputation advocate friend Joy Sever is right when she says that all these lists are diluting one another because most people do not understand the differences between them and how the data are gathered.  She was right to also say that pretty soon it will all be about the reputation of the reputation rankings. It seems like that has already begun.

The most important way to measure reputation is to take these reputation rankings into account but focus primarily on your own customized research that drills down into your most important stakeholders’ perceptions and most critical reputation dimensions. By tracking your own company reputation vs. competitors over time, reputation-building has its best shot.