Archive for May, 2010

   An article in yesterday’s WSJ (need subscription) had a smart opening paragraph. It was an oped by Peter Hart and Dan McGinn, well-known pollsters and strategists, about the oil spill in the Gulf of Mexico and the impact on reputation. The play on the Andy Warhol quote is a true keeper. Here it is:

Pop artist Andy Warhol predicted in the 1960s that “in the future everyone will be world famous for 15 minutes.” Well, the future turned Warhol’s prediction on its head: 15 minutes of shame has replaced 15 minutes of fame.

This sentiment marks why I wrote my book on reputation recovery. Every company can expect their 15 minutes of shame today. It may be 15 minutes, 15 hours, 15 days, 15 weeks or 15 months. I did not want to start the holiday weekend here in the U.S. without mentioning that this is at the core of reputation management today and the need to be prepared.  Enjoy the weekend. I intend to.

  Author and columnist Thomas Friedman wrote today: “In this kind of world, leadership at every level of government and business matters more than ever. We have no margin of error anymore, no time for politics as usual or suboptimal legislation.”  Leadership matters is one of the cornerstones of great company reputations. There is no getting around it. The destiny of the CEO is inextricably linked to the company’s reputation. If you have ever worked with a CEO who was not the right fit for the company and who worried about themselves more than the company, you know the damage that the wrong CEO can do. It is almost better to work for a so-so or good, not great, CEO than the wrong one.

Also in today’s New York Times’ business section is some advice from the CEO of The Calvert Group, Barbara Krumsiek . She was asked for her best advice to executives starting out.  She said to ask each executive on your leadership team the following question,  “Tell me about your job, but now tell me about what you think you do here that is not in that job description that you think is really critical.”  Good starting out question but I actually like the second question better, “Tell me one thing that’s going on at Calvert that you think I don’t know that you think I should know.”

The best advice for CEO newcomers is that there is no such thing as a stupid question. One CEO told me that. You get about 3 or 4 months to ask those “stupid” questions.

Getting back to the importance of leadership, we don’t need Thomas Friedman or even me to relay this important news about what drives the global economy and business today — good leaders. Every day we get examples of the impact of good and bad leadership. Unfortunately there are so many examples of bad leadership decisions that we forget to notice the daily good deeds of many company CEOs.  Is too bad. The margin of error might actually be wider than we think.

When I visited Amsterdam, someone mentioned an incident of a sympathetic CEO.  A discussion arose about how CEOs could make a greater show of empathy for those affected by normal day-t0-day events such as delayed flights due to volcanic ash, safety incidents, food recalls, investment losses, etc.  When I first heard the word “sympathetic” in the same sentence as “CEO,” I liked the ring of it. However, I immediately thought about how infrequently this topic has come up in all my years of following, studying and working with CEOs.  Why is that?  I think we all know why.  Empathy is not not what makes great CEO reputations. Nice to have but not necessary perhaps.

Along the same lines, I was asked why CEOs do not apologize enough. I often get asked this question and frankly, I wonder if there are too many CEO apologies today.  My fear is that it is easy to apologize and the more there are, the more dilutive the effect might be.  The sense  in our Amsterdam meeting was that CEOs do not apologize enough when things go wrong.  I usually respond by saying, “Name me one CEO who apologized that was sued.”  I really can’t think of any right now although there must be one, don’t you think?

Those are my thoughts for the day. The sun is out and I am going out to play and be sympathetic.

  With all the coverage and discussion on oil spills, I keep thinking about a conversation I had a few years ago with the head of communications at an oil major in Europe. We were talking about crises that the industry had suffered and he mentioned that there was nothing like the “panda effect.” I told him I was not sure what he meant. Now I do. He said that in high risk industries such as oil, safety risks are just part of the job. Deaths are expected and they happen. But, he said, when animals or wildlife are harmed and the pictures are blasted across the media, the “panda effect” does its most serious damage.  Hard not to see his point as visual after visual pictures wildlife affected by the recent Gulf of Mexico oil spill. 

On a similar note, I was talking to someone just this past weekend about the oil spill and she mentioned birds she saw on TV covered in oil slick.  “I am an environmentalist and this really upsets me,” she said. I reminded her that 11 families lost their loved ones as well and somehow that single fact does not get the same attention and outrage from the public and media.  She looked at me somewhat sheepishly and I felt a bit guilty for making the point. But here was an example of the panda effect in action.

The panda effect on reputation is unavoidable but now more powerful than ever with the spread of news online.  Every day I am reminded of  this one fact.

  I often feel that all I hear is bad news about companies losing reputation. When I see or hear the news, it usually is about another dent in a company’s or CEO’s reputation. Of course, that is what news is about — wrongdoing. I understand that companies that are maintaining or lifting their reputations up are not particularly newsy unless something catastrophic had happened to them.

Yesterday I spent in the jury pool in Brooklyn where I live.  As I walked out, I thought to myself how nice it was to participate in a system that had seriously improved its reputation. Years ago, jury duty in Brooklyn (never been to other borough’s courts) was downright depressing. The seating was terrible, the lighting dim and the officers downright rude, grumpy and dismissive. Yesterday was completely different. The seats were comfortable and actually cushioned with distance between each one so that you were not sitting shoulder to shoulder on hard benches with total strangers like on the subway. There were flat screens with the news playing in several areas of the large room where we started our day. I did notice that Fox News was on in the morning but later MSNBC took over.  They balanced even that. There were banks of computers for people to check their emails for free and people were told they could take 10 minute breaks for smoking.  The wireless in the jury room allowed me to work most of the day which was extraordinary too. The court officer announcing how the day was going to go and what our rights were was very funny and made me want to listen to him. People were treated like customers, not potential criminals which is how it used to feel. Most notable, at the end, another very official court officer thanked everyone who was dismissed from jury duty and stood at the door to thank people on the way out.

The customer-friendly welcome was evident in every touchpoint during the day. I was very pleased that if I had to spend a day away from the office after traveling for two weeks, at least I could watch fine reputation-building in action. And, even more to my astonishment, Brooklyn residents are not called back for another eight years. After being called every three years, that’s another reason to live in Brooklyn.

 My journeys in Europe continued all week although I am now safely home and enjoying the first warm weather of the past two weeks. One thing that struck me in retrospect was that there was no market that did not talk about recession-weariness. Everyone mentioned how tough times had been with the global recession and might be getting worse as Greece faced its debt crisis, the EU bails out several members and the Euro was dropping. My presentation on The New Normal was perfectly timed.

• In Amsterdam I learned that some companies were rising to the challenge of the recession. Dutch airline Martinair had offered a similar program to Hyundai Assurance in the US where people who booked transatlantic flights could cancel their flight without cancellation fees if someone lost their job. It is called Boek Gerust Verzeking or worry-free booking insurance.  As well, the CEO of KLM, Peter Hartman, was applauded for going on YouTube to sympathize and apologize about the flight cancellations caused by the volcanic ash a few weeks earlier. A perfect example of CEOs resetting their reputations.  In addition, several people in our panel discussion mentioned the book The Truth about Ikea when we discussed this new  “tell all” and “see thru” world that has emerged. I also learned about an online site where you can “couch surf” or find a couch to crash on in another city so you can save some money. Smart alternative to paying for a hotel if your finances are strained. The Dutch also have a group buying site —  ichoosr.com – and their CEO had joined our panel to discuss the site’s success in this new age of austerity or what we were calling the New Normal.
• In Paris, at our luncheon discussion, one of the guests mentioned that they were moving their communications and marketing back to print since they were not convinced that the ROI online was working as well as they would have liked. Also had my first experience in Paris being interviewed in-person by bloggers. Turned out to be quite a lot of fun. This fits into my prediction that face-to-face communications will be back as a new channel for communicating.
• London was fascinating because I arrived the evening when the new coalition government was announced. The first day of the “new politics” or “plural politics” was brisk and spring –like, the perfect day for a new beginning. In our breakfast seminar, it was hard not to discuss what the new governance model in Great Britain meant but one idea I had was that the future would undoubtedly include more coalitions in business partnering over the next few years. Additionally, I thought that the outcome of the election was indicative of the new normal in that there were no winners and losers (except Gordon Brown) but something in-between. Not black or white, but just grey all the time.
• I could have sworn that Heathrow airport in London is scented. I could not believe my nose! There was a great scent in the air and although I can not find an article on why it smelled so therapeutic (aromatherapy), I think it might just be the air from the spa facilities inside. It is a great idea if it is true.
• Madrid had just heard their Prime Minister Zapatero talking about civil service workers’ salaries being frozen, pensions cut and other budget-minded recourses when I arrived. Like other cities, people instinctively knew that frugality was back with a vengeance. I had read in the paper before I arrived  that Zapatero had said it was the toughest speech he ever gave. I considered that quite humble although I doubt most Spaniards felt the same way upon hearing the news. In the world of reputation, leaders get all the credit when things go right and all the blame (and then some) when things go wrong. An interesting experience during my media interviews was that each journalist asked me what I thought the future of journalism was.  I think this happened everywhere I went when journalists took the floor. The reputation of journalism is sure taking a hit in this new digital world. I recall in Brussels how a journalist said that online was killing them off one by one. Is a global phenomenon and one I have a lot of sympathy for.

Now that I am back on solid ground for a few days and not spending my days and nights in airports and hotels, I can more easily get back to posting more regularly about reputation matters.  However, reputation is everywhere. Danny Rogers, the editor of PRWeek in London wisely pointed to the frequent mentions of the word “reputation” in media coverage. It was not always like that.  It is unavoidable these days.

I had a great time with my colleagues at Weber Shandwick and meeting clients and journalists, bloggers,  among others. Mind-expanding is good for the soul.

Before I forget.  As I travel to Weber Shandwick offices around the network in Europe, some things resound in my head. One constant is that I am always reminded how much I enjoy and respect the people I work with inside our network. As colleagues, they are immensely collegial, collaborative, client-first focused and committed. Reputations are built on these types of factors and it is good to be reminded how deep it goes. But returning to a few other things that caught my eye as I traveled last week and look ahead to this week…..

• My colleagues in Berlin told me that the day before I arrived, there had been a march protesting “work.” I found it fun to think about. Down with work! How would we pay our bills? I meant to follow up with this online but forgot because I had to work.

• In a taxi back to my hotel in Berlin, I saw a restaurant named White Trash Fast Food. Wonder what that was?  I think it is a place for music, food and tattoos.

• In some research our parent company IPG did on New Realities among consumers, one of the findings was that people were not suffering from data overload. In fact, US citizens and our German brethren (in a separate study) by Respondi said that they were energized by being their own researchers and not frustrated, overwhelmed and inundated as people think they are. In fact, people felt smarter and in greater control over their choices than ever before. One of my colleagues in Germany mentioned that there was a big debate in his country about information overload and that the abundance of data was making us dumber not smarter. I think not.

• In Brussels, I learned that the head of NATO is a frequent Twitterer. I also learned that the EU’s broadcast service….EbS…Europe by Satellite, provided such good up-to-date information that journalists were losing their edge in being able to report on EU news. I was told that EBS was so good that it broadcasted negative as well as positive information about itself. What’s a journalist to do?

• One well-known and large Fortune 100 company communications professional told us how the company had established an “amplification” room, not a war room, to deal with two years of criticism in order to get their story properly told.

• Another company at our lunch in Brussels had recently won approval from management to develop a word of mouth program that would allow for the negative with the positive. He talked about how hard he had worked at getting it to happen and how a pilot was about to begin that would telegraph the program in consumer language, not corporate speak. He was reading a book titled The Conversation Manager. One victory at a time.

• Our Milan office organized a superb event with the American Chamber of Commerce, a well-known journalist, one of our Milan office’s leaders and the US Consul General who spoke about the rising “green economy” in the U.S. I was there to talk about The New Normality that I mentioned in my last posting. The US Consul spoke highly of President Obama’s efforts and I have to say it felt so good to hear some pro-Obama talk after weeks of backbiting at home.

• I ran into someone in a large department store off the beaten path in Milan who had been at the event with the American Chamber of Commerce. It was Saturday morning around 11AM. Could the world be smaller? He had just bought sunglasses.

• I made it to Amsterdam despite the volcanic ash debacle. It was a long day.

• The Economist wrote an article where they mentioned “headline risk.” Since I often write about reputation risk, I think this is an increasing factor in reputation recovery….reducing headline mentions. At what point does headline risk start to dissipate? And what has to happen? One course of action is a CEO apology or CEO dismissal. That’s been proven to work but not always the best solution.

More later on the rest of my trip.  Will update you on Amsterdam, Paris, London and Madrid in due time.

  I am right now sitting in the Malpensa airport in Milan waiting for a flight to my next city on my two week visit to Europe to talk to clients and the media about the new normality — how life will change as the global economy slowly recovers (e.g., consumer is kingmaker, disruptive communications, online reputation snipers, just-in-time pr, communications advisors working side by side with CEOs, silence is not golden, naked reputations).  Before I left one week ago, the world seemed alot safer than it rapidly became with the news of the Times Square bomb, the Greek debt crisis, the stock market 1000 point plunge and our closest ally, Britain, facing a hung parliament (sounds like a hung jury to me).  Then Saturday night while dining on saffron risotto, I heard that Times Square was evacuated again. This was particularly unnerving because my daughter works in the area.  Here I thought the world was becoming more stabilized or more normal or less unsettling.  The Gods must be laughing. The Age of UNnormality is here for good.

Today my stress level was heightened by reports of volcanic ash making its way across Europe.  I figured that Milan would be fine, right?  How could Milan be affected by what was happening in Spain? I went online and saw that my flight was not cancelled.  However, flights from Malpensa were cancelled 2pm and I had already checked out. So I have been in the airport most of the day.

That would be bad enough but did not mention the really bad news which is why I spent so much time in the airport. I lost my blackberry a few days ago in Brussels and do not get a replacement til Monday night (hopefully).  The stress of managing flight cancellations and finding if I could get on another flight without a cell and low battery laptop rattled my nerves plenty. But all is okay now as I sit and write from deep inside the airport waiting for news about my delayed evening flight which is taking off….so far.  I wonder where the volcanic ash will be tomorrow as I depart for another city in the late afternoon.

I do not mean to complain because many people have suffered far worse but the news has been particularly unplesant! I just wish to remind people who think that the world has returned to normality, please think twice.

   Anglo Platinum produced its first fully integrated single volume annual report this year.  Here is the link. A friend of mine sent me this information because of my interest in “integrated reporting” where financial and non-financial information are unified into One Report. That is also the name of Harvard professor Robert Eccles new book, One Report, who is a leader in this area.  The discussion below was on an integrated reporting discussion site on LinkedIn that I could not access but that just might be me!  Perhaps I have to be invited to the discussion group.  I did try. The person to contact for more information is Stephen Bullock, Sustainable Development Manager at Anglo Platinum who is on LinkedIn.

I found the reasons behind Anglo Platinum’s integrated reporting very insightful and interesting, particularly this: ”Firstly we wanted to demonstrate how CSR has been integrated into how the business is operated and run and this was difficult to do by producing a separate SD report. It created the perception that SD/CSR was an after thought i.e. how we make our profits is different to how we spend them.”  The point of integratred reporting is well made in those two sentences.  See the input from Anglo Platinum below which appeared in the discussion area.

“This was a change from the two previous volumes with volume 1 in the past being the business report and volume 2 the sustainable development report. What were the drivers for integration? There were a few drivers that led us at Anglo Platinum to produce an integrated report. Firstly we wanted to demonstrate how CSR has been integrated into how the business is operated and run and this was difficult to do by producing a separate SD report. It created the perception that SD/CSR was an after thought i.e. how we make our profits is different to how we spend them. Secondly the new King Code on Corporate Governance in South Africa is encouraging integrated reporting; although the King Code does clearly state that integrated reporting does not mean one report. Thirdly there was the cost element. By producing one report we greatly reduced printing and posting costs associated with the distribution of our annual report to shareholders. What were the challenges? To the best of our knowledge no other resources company had at the time completed an integrated report and we were chartering new ground. We had to rely on examples and experience of integrated reporting from outside of the resources sector. Another big challenge we faced was to be able to ensure that our stakeholders who were used to getting certain information new exactly where to find it in the integrated report. This was overcome by producing an explanation behind our integrated report and a summary reference on page 1 to where stakeholders could find what information. In addition we did produce our “normal” SD report that is available in HTML and pdf format on the company’s website for those stakeholders who simply want to scrutinize the CSR information. Initially we had hoped to create one set of financial and non-financial statements in the same section of the report. However due to differences in financial and CSR assurance we were unable to do this satisfactorily and took the decision to include all SD/CSR related data in the company statistics section of the report. We will be working with our auditing firms this year to overcome this problem for 2010 and hopefully achieve true integration in 2010.”

Two weeks ago I went to the Harvard Club in Cambridge to accept an award on behalf of Weber Shandwick for the best corporate responsibility advisory firm in CR magazine’s ranking of our category. No doubt about it…it was an honor. CR rated public relations agencies and advertising/marketing firms and we topped the list. The meeting in Cambridge was to honor CR’s 100 Best Corporate Citizens and to gather people together to discuss corproate responsibility. This was before the Horizon oil spill which would have undoubtedly dominated the discussion. The meeting was terrific by the way.

What surprised me the most was that one of the issues that was given out in addition to the issue devoted to 100 Best Corporate Citizens was CR‘s Black List.

This made me wonder whether there will be a bumper crop of Black Lists in the next few years. Should we brace ourselves for Black Lists of the worst companies to work for, least ethical companies, worst companies for working mothers, worst MBA programs, most terrible IT companies to apply for, meanest CEOs, etc. Actually there have been many Worst CEO lists — according to Google there are nearly 900,000 hits for Worst CEOs.  No surprise. But the Black List sounded deadly to me and I cracked open the issue to learn why a publication would go this far. Below is what CR’s magazine’s editor Jay Whitehead had to say about why they published the list. He makes some good points (transparency builds credibility) and I was glad to see why they did not take this List so lightly. As noted, many of the companies were on the list because they did not disclose information on the factors that go into CR’s ranking. We will see what next year brings in terms of Black Lists but I can tell you one thing….Worst CEO lists will be here for eternity. As I always say (and I am sure someone else said it before me)….Just as CEOs get all the credit when things go right, they get all the blame when things go wrong.

“We have a confession. What we have not told you is that every year after we publish the “100 Best Corporate Citizens List,” someone reminds us that we also have an obligation to publish the bottom of the list. Up until now, we’ve ignored that reminder. But we cannot ignore it any more. The “Black List” is the result of recurring demands to see which companies are the most opaque among the Russell 1000.

In publishing the “Black List,” we do not take our responsibility lightly. Companies on the “Black List” represent the least-transparent companies in the Russell 1000, which is a tough place to be in the era of corporate responsibility and its ever-intensifying drive for transparency. We expect the companies on the “Black List” will be unhappy with us.  We offer them one piece of solace. All a “Black List” company has to do is make a few CR-related data points about itself publicly available. Report a couple data points to the Carbon Disclosure Project. Put your employee benefits policies online. Publish some human rights information. Get a formal climate change policy, and put it online. Some of the actions required are the public company hygiene equivalent of washing your hands after visiting the rest room. Yet all the “Black List” companies have made the decision to skip that basic step. 

While being a “100 Best Corporate Citizens List” company is a major accomplishment requiring considerable commitment and cost, indulging in just enough transparency to get your company out of the cellar is not that hard, nor that expensive. And one thing’s for certain: it’s less embarrassing than being on the “Black List.”

 The “Black List” methodology is exactly the same as what we use for the “100 Best Corporate Citizens List.” Our population of companies is still the Russell 1000. We used the same 349 data points in 7 categories. We used the same data provider, IW Financial. We contacted each of the companies by email to request that they provide any data they have to help us correct their files. We got no replies from the 30 companies that appear on the “Black List.”

 Where the “Black List” differs from the “Best” list is in the paucity of data. Where “100 Best” companies disclose hundreds of data points in Environment, Climate Change, Human Rights, Employee Relations, Finance, Governance and Philanthropy, “Black List” companies have disclosed virtually zero. In fact, all 30 of this year’s “Black List” companies tie for dead last in every category—with the exception of three-year total return, which varied a bit as you see on the Black List above. And the irony is that “Black List” companies significantly under-performed both the S&P 500 and the “100 Best Corporate Citizens List” companies in three-year total return.”