Archive for April, 2010
I am worried about the reputation of chocolate, one of the basic food groups as far as I am concerned. An article in the WSJ remarked on research that found that people who eat more chocolate are more likely to be depressed than those who eat less of it. The research came from the University of California and was led by associate preofessor of medicine Beatrice Golomb. Golomb commented that chocolate might have antidepressant effects that increase its usage. I knew that already and thought to myself, ask every woman you know!
My first reaction was that it would hurt chocolate’s reputation if it was linked to depression. This would be deadly. Would people not want to be seen buying chocolate or having it at their desks? What would happen to all those lovely chocolate bars in my neighborhood? And would Mother’s Day ever be the same, let alone Valentine’s Day? Would fine hotels stop giving us chocolate on our pillows at night? On second thought, maybe it is okay to admit that things are not perfect all the time and that the world could use is a bite of chocolate. On third thought, we should give chocolates out to our bickering congressional representatives as a way to mellow out their moods and get some bills passed. Clearly all one needs is cocoa. Maybe not.
Happily, I read to the end of the article because Golomb admitted that she is a chocolate lover and regularly tells people that chocolate is actually a vegetable. Good woman. I am now not going to obsess about chocolate’s reputation.
As a follower of reputation and builder (I like to think) of the importance of reputation in the world of business, I come across new sites on the topic all the time. A site called Reputation Repair Services caught my eye. If it were only this simple. This company promises it can help with finding you an Internet lawyer, cease and desist notices, copyright and trademark infringement notices and domain dispute lawyers. It can protect your reputation by improving search engine suggestions, create positive blogs, good reviews and more. [This company says that they have been around for many years and the alert below is from their site.]
There are various packages ranging from $500 per month and upwards. For $500/month, you get site evaluation, keyword research, five promotional pages and content that are optimized by the online company, full site optimization, inclusion in reciprocal linking systems and search engine submissions. You can move up from this minimum service fee (with an 8 month committment) to $750 per month service. The additional fee provides you with a shared techie “live” and at your service who is devoted to your reputation until the negative information no longer appears on page one of Google. And onward and upward.
I have no doubt that there are people who want negative information about themselves or their company deeply buried or removed from the Internet. I am not sure however that this takes care of the hard work of reputation building which almost always involves creating high quality products and services, engaging in corporate citizenship, ethical behavior, financial soundness, innovation and leadership development.
Oops. If you are also worried about your CEO’s reputation, they can help you too. Any CEO missteps can be wiped off the face of the earth. As Reputation Repair reminds us, “A CEO’s reputation is directly linked to the reputation of the company. The CEO is the face of the company and a leader who provides direction and inspiration.” These words sound familiar since I have written about this topic for years.
I often wonder if these online reputation repair and protection sites can help you build reputation faster by damaging your competitor’s reputation instead. If I wanted to do some harm, maybe I should just spread rumors about my toughest competitor and get that on page one of Google. Could I find someone to do that? I doubt that it is easy to find companies willing to compromise themselves but this has crossed my mind. Might be less expensive.
All this is to say that online reputation management is important but if this is all that is done to build enduring reputations, this is a short-lived proposition. True reputation management deserves more consideration, planning, depth and years of hard work.
Industry reputation is critical to companies today. It is many times more important than it used to be. Years ago, one company could have its reputation damaged and it did not tarnish the reputation of its peers. Today, one rotten apple affects the entire industry which is why we now hear so much about sectors when it comes to reputation – the financial sector, the pharmaceutical sector, the oil sector, the automotive sector, etc. The media frequently reports on various industry associations banding together to promote their reputations. Industry reputations rise and fall but whatever problems they may have, the reputation after shocks for industries seem to linger for a long time. Whereas individual companies can repair their reputation in due course, it often seems harder for industry reputations to do the same. Weber Shandwick asked this question of executives a few years ago in our Safeguarding Reputation research and found that executives the world over consider industry reputation much harder to manage than company reputation (57% vs. 39%).
Harris Interactive’s latest research on reputation among consumers asked about sector reputation. The greatest year over year reputation improvements were seen in the retail and the automotive industries. Of 13 industries studied, only the pharmaceutical industry declined from 2008 to 2009. The financial services sector which is often in the headlines increased which I found interesting. Perhaps the recovery is lifting perceptions of that industry and people believe that reform and stablility is finally on its way. Maybe they feel that there have been enough apologies and it is time to move on. Hard to know without asking.
|Positive Ratings 2008||Positive Ratings 2009||Change|
|2.Travel and Tourism||48||52||4|
|4. Consumer Products||43||49||6|
|13. Financial Services||11||16||5|
Annual RQ 2009 USA, April 2010
When it comes to overall corporate reputation, consumers are not as negative as they were one year ago, according to Harris Interactive’s research. In 2009, 81% said today’s reputation of corporate America was not good or terrible. This compares favorably to 2008 when 88% said so. Still the figures are damming. Harris Interactive reports that the increase in perceptions of good corporate reputations in the U.S. is the first increase in four years. We will take whatever we can get. Let the “good” times roll.
Just this week I posted on Harvard Business Review’s guest blog site my opinion on a new website called Unvarnished. It is a site where people can post anonymous reviews of people and companies. Here is the link to my posting. You will find my advice on how individuals can learn from companies on how to defend against reputation snipers.
We just released Chief Communications Officers: First 100 Days, an “e-book” reflecting advice from dozens of veteran corporate communications officers (CCOs) around the world on how best to navigate their first 100 days. This mini-book is a favorite of mine because early tenures are a topic that interest me greatly. My first book on a CEO’s early tenure, CEO Capital, describes many of the same challenges and advice on how to hit the ground running. For corporate communications officers, those first few weeks are critical because a crisis could arise at any moment and communications is always front and center these days. Therefore “onboarding” (a new HR term) needs to go smoothly because every day could be a red flag day.
Because we regularly survey corporate communications officers around the world, this e-book seemed like a natural extension of our insights on this rapidly rising and influential position. In our last survey, we learned that nearly 6 out of 10 CCOs (58%) in Fortune 500 companies now report to the CEO. This was a 10 percent increase from the year earlier. The e-book captures advice in CCOs’ own words on do’s and don’ts for those newly coming on board and what to avoid so as not to derail the best of plans.
When we asked CCOs what the three greatest challenges were, this one response seemed to sum it all up:
1. Reputation management in an era of deterioration of traditional media,
2. Increasing effectiveness of voices of outrage, and
3. Light speed evolution of social media.
If anyone has additional advice, please send it this way and enjoy the book. (If you need a pdf of the book, write to me at email@example.com).
A few things reputation-related that I wanted to blog about today.
Saw an article in Fortune about what Wall Street analysts think about the importance of CEOs. The survey from DDI found that analysts consider the CEO the only executive worth their time and attention. One of the quotes cited in the brief article went like this, “I don’t spend my time worrying about how companies are fostering their next generation.” Talk about short-termism. [Note: I tried to find the survey so I could cite properly and could not. Neither could I find on Fortune's site, possibly because it was a short piece.]
Also took a look at McKinsey Quarterly’s new global survey on sustainability. Definitely worth a read because the information is very rich and noteworthy for those of us interested in how reputation and sustainability work together. The findings that I found most compelling are:
- 72% say sustainability is “extremely” or “very important” for managing corporate reputation and brands
- 55% say that investment in sustainability helps build company reputation
- 36% believe that reputation-building is a top reason for addressing sustainability
No surprise to me was that NGO pressure was very low on the list as a reason for dealing with sustainability (3%). I used to think that the lack of attention paid to NGOs when this question gets asked demonstrated that executives were fooling themselves for not paying attention to NGOs and trying to engage them. But now I am starting to think that results like this reflect executives’ unwillingness to admit that NGOs have an effect on their sustainability initiatives. Hard to sort out because I do not see how NGOs could not be a primary reason for pushing companies to see their role in greater issues facing society.
Astonishing as well was that 62% of executives surveyed say their companies do not report sustainability metrics externally to investors or are unaware of how they are used. When reputation is so important today, why not? Why not combine financial and non-financial performance into one annual report as Professor Robert Eccles explains in his new book, One Report?
The report also looks at the differences between companies who consider sustainability a top three priority for their CEOs and are effective at managing it . The differences are quite considerable — more “proactive” companies publish sustainability sections on their Web sites, embed sustainability data in their communications with investors, participate in sustainability rankings, issue sustainability reports and communicate with socially responsible investors. My sense is that companies who are more proactive are also more profitable over the long-term.
There is no doubt that the past 18 months of recession have stalled some of the great sustainability initiatives that companies have embarked on to improve the world at large and build reputations. However, I have no doubt that these programs will come back full force with a vengeance in the long-term.
Harvard Business School’s recent Working Knowledge newsletter has a terrific Q&A with HBS history of business professor Richard Tedlow. It is about the big D word…Denial. The focus of the interview is how CEOs deal with reality and what happens when they do not see the writing on the wall. HOw did they miss shifts in their industry? Did someone forewarn them? How could they have missed the tell-tale signs of impending disaster if the company had been so successful? Rightfully so, Tedlow says that the problem with denial today is that the costs are so much higher. And that they are. Reputation stumbles and performance blow outs set your best people running for the exits, customers to jump ship and investors to flee.
There were two quotes that I particularly enjoyed reading in the interview. When asked how companies like A&P and Webvan could have fallen on such hard times, Tedlow paraphrased Tolstoy saying “every company in denial denies in its own way.” That is certainly true and rings loud when you think about Lehman Bros. and its CEO Richard Fuld. Then second quote came when Tedlow was asked how leaders can not see the early warning signs that provide hints that something is not right. Tedlow responds: “It is often middle managers who are best acquainted with new realities. As Andy Grove has noted, these are the people who are out on the front lines while top management is ensconced at the home office, cushioned from the daily reality of the rough-and-tumble of the marketplace. ‘Snow,” he [Grove] wrote in Only the Paranoid Survive, ‘melts first at the periphery.’ Problems, in other words, appear initially at the borders.” I have got to remember that the next time I get asked why it is important to monitor reputation online.
Tedlow has a new book coming out which proves to be very good. It is titled Denial: Why Business Leaders Fail to Look Facts in the Face–And What to Do About It. The book cover has a pair of rose-colored glasses. What else!
Barron’s released its list of best CEOs this past week. I thought one of the criteria for making the list was telling — identifying CEOs who kept their companies out of trouble. As we have reported before on this blog, nearly one out of two companies stumbled and lost their industry #1 status in the Fortune World’s Most Admired Companies report this year (Weber Shandwick’s Stumble Rate). No doubt about it, 2010 will be the year of Reputation Rebuild. I’m ready for it.
• It is easier now to track reputation and ROI with the Internet. However the field of social media is so new that it is very difficult to track back to a baseline.
• Marketers are now interested in reputation as they realize that the company behind the brand matters. CMOs are the new entry point into companies as they see the connection more vividly. Product marketing is not enough.
• Perception is nice to have but behavior is have to have. You need your customers to act – buy your products, give you the benefit of the doubt in time of crisis, recommend you to others, spread word-of-mouth.
• Social media is the new Petri dish.
• Reputation Institute’s Anthony Johndrow reported on a study among CMOs and CCOs. They found that 97% are interested in reputation, 89% are doing something in the space but only 33% are measuring its impact. Disturbing when companies spend so much on reputation in general.
• We should be referring to “social business” not “social media.”
• Integration between traditional and social is key.
• One of the reasons more companies become social is that competitors force their hands. When a competitor starts using Twitter, YouTube and Facebook, its rivals are propelled into this new world.
• Sometimes your critics can be your best advocates. An example was given of a relentless critic who also links to company articles mentioned on Twitter that promote the company’s point of view. So your online enemies can also get your word out if you just time it right.
Everyone agreed that reputation has become more complex, harder to manage and everyone’s job. In addition, the bar is now not as high or as low as it was just one year ago. Since so many companies are now using Twitter for engaging customers and neutralizing reputation damage, some of the early examples such as Dell and Comcast are just that – text book examples and expected today.