Archive for March, 2011

Great quote I got in my hotel in Shanghai.

“Success consists of going from failure to failure without loss of enthusiasm.”

                                                                                           Winston Churchill

I am traveling in Asia so have not had alot of time to write in my blog. 

I just read this interesting perspective on what eBay said their real accomplishment was: “…neither their clever technology nor the marketplace they created. Rather, it was to build trust between people who had never met.” That’s reputation building at its core — building reputation between people who’ve never bought or come close to the company’s products.

I have been traveling to different markets to discuss my article on Reputation Warfare. In one meeting, a corporate communciations officer told me that after a recent crisis, the previously shy CEO said he now realized he was the company’s PR chief. And to keep it coming. It often takes a crisis to turn chief executives into media hounds.

 I could not start this blog post without mentioning my deep sorrow for those lives lost in Japan due to the earthquake and tsunami.  The news is devastating and I am very sad for this amazing country. However, if there is a country with the ability to come together to move forward, Japan is the one with the finest reputation for preparedness and commitment to the community.

I wanted to share some research I read about in The Economist on the wisdom of debunking company myths and rumors online. If you are a regular reader of my work, you have heard me mention that I think it is a good idea to refute rumors about your company and its products if they become too prominent online and spiral out of control. However, researchers at Kellogg’s School of Management and Stanford Business School  found that it actually hurts to repeat rumors on a company web site.  They found that by highlighting the myths on company web sites (in order to explain why they are wrong), the rumors are actually propagated, not diminished. I think that there is always a risk to communicating about the negative but that companies need to join the conversation about hearsay that harms their company or their brands’ reputation. Being silent in some cases can cause even more damage because of the inaction and going on the record with the facts. Of course, the art to disclosure is knowing when to address myths and rumors and when enough is enough. That requires constant monitoring online to know when hearsay is spiraling out of control.

I do agree with the researchers, however, that when companies repeat myths and rumors that are circulating online, it increases the likelihood that search engines will pick them up and give the rumors greater  prominence in the search rankings. But as the article itself notes, the antidote to hearsay is making sure that there are good things also being said about your company to counter the negative ones. As the researchers say, the positive facts “nudges people to doubt nasty things they may hear about the company in question.” Therefore countering the rumors and complementing them with good information on what the company is doing or the brand is promising and delivering should work in your favor.

Ultimately, it is maintaining the right amount of the good stuff to counter the bad stuff. And knowing when it is the right time and right place to speak up and stop rumors in their tracks.

As reputation watchers, we are always watching the big barometers of reputation such as Fortune World’s Most Admired Companies and its sister, Fortune‘s Best Companies to Work For (BCTWF).  Below is an analysis and comparison of data points examined on the Fortune Best Companies to Work For list between the years 2006 and 2011. Even further below is some analysis on LGBT offerings, healthcare benefits, job and job sharing growth and other unusual benefits as factors in the 2011 winners of the workplace.

All Data 2006-2011

LGBT As a Factor

In the past decade, American companies have increasingly provided programs and initiatives to recognize the LGBT community in the workplace.  A large 95% of The Best Companies to Work For had LGBT-friendly policies and seven in 10 (70%) had LGBT-friendly benefits in 2008. In 2011, the number of Best Companies with LGBT-friendly benefits was an astounding 88% coupled with an almost perfect 99% of Best Companies with LGBT-friendly policies. While the Best Companies’ LGBT-friendly benefits have always lagged behind LGBT-friendly policies, each year the gap between the two has narrowed; in 2008 there was a difference of 25% which has since shrunk to a mere 11% in 2011. The LGBT community has become a widely-recognized group within the American workplace and the Best Companies have been quick to make headway in this area.

Health Benefits as a Factor

Major corporations at Davos this year came together for the World Economic Forum Workplace Wellness Alliance. The Alliance consists of 31 companies committed to advancing wellness in the workplace. Goals of the alliance include knowledge sharing and developing and promoting the use of standardized metrics to create a global standard of wellness, hopefully increasing worker productivity. Looking at health initiatives for Best Companies, after rising from 2006 to 2008, 100% paid healthcare was in decline from 2008-2010.  2011 saw the first uptick in two years moving from 13% to 14% of Best Companies but still not near the peak of 21% in 2008. While 100% paid health seems like a luxury not all companies can afford, a healthy work force can be a powerful tool that may make the investment worthwhile. On a similar note, only 59% of Best Companies offered subsidized gym memberships in 2008 compared to a whopping 78% in 2009. The number of Best Companies with subsidized gym memberships has fallen in the past two years, but far from pre-2009 levels (currently 71%). Best Companies are still trying to keep their workforce fit and healthy even in the wake of a recession which demonstrates that employee health is a staple of a great workplace.

Unusual Perks as a Factor

Recently, more employers have been offering not only physical health perks, but mental health programs as well for their employees. Health isn’t confined to gym and fitness centers. Companies like Zappos.com offer employees an on-site resident “life” and “goals coach” that advises employees on work/life balance and discovery of  higher meaning in their lives (sounds awesome, right?). Defense contractor SRC/SRCTec offers employee-led support groups that focus on alleviating the stress of caring for an aging parent. And starting with a yoga room at Ebay in 2008, the idea of peaceful exercising is re-emerging in 2011 with Intuit’s free Yoga, Pilates and Zumba (Latin-inspired dance fitness–first time I heard of this, oops) classes.

Job Growth & Job Sharing as a Factor

While perhaps a reflection of the economy, average job growth at the Best Companies ticked up slightly after falling to its all-time low of less than 1% in 2010. Traditionally, average job growth for Best Companies had hovered between 7% and 9% (between 2006-2009) before falling sharply in 2010. For the Best Companies, average voluntary turnover also moved in a similar direction. Voluntary turnover fell from almost 12% in 2009 to 7% in 2010 where it has remained flat through 2011. The past three years have proven to be difficult for the unemployed, perhaps pushing more workers to hold onto their positions.

Job sharing reached its zenith in 2007 with 71% of Best Companies offering such a program. The offering steadily declined for the next two years with a small surge in 2010, but ultimately falling to a five-year low of 56% in 2011. Job sharing may be on the decline lately as more Americans are pressed for income, looking for full-time employment as a suitable solution.

[Many thanks to Ross W for his help on this.]

I have not written about this interesting development in corporate crisis history but I am glad that I didn’t because I have been thinking about it for quite awhile and am thinking about it differently today. Last November, I read in The New York Times that BP is working on a feature length film that would cover the Gulf of Mexico oil spill. I did not know what to think of this at first. I was particularly interested because it fit well into the strategies I recommend in my article in Harvard Business Review on Reputation Warfare.  It fit right into my suggestion of “going rogue” and adopting unconventional ways of defending and resetting one’s reputation. As a BP spokesperson is quoted in the article:

“They are making a film of the spill primarily for an internal audience as an archive of a momentous event in the company’s history (not to mention those impacted by the tragedy and its aftermath),” Robert Wine, a spokesman for BP, said in an e-mail.

I tried to learn more about this film because I was so curious about how BP intends to use the documentary. At first, I thought it might just be a one-sided affair which is what the scant coverage online has said. However, over these past few months as I have been thinking about it more and more, I see it as an opportunity if it conforms with what I think.

As the spokesperson said, the film is intended as an internal filmfor internal audiences. If the film is used to document history and provide a lessons learned framework, this could be a vital way of not letting history repeat itself. Although there is plenty of information online about the oil spill disaster, a film that starts at the beginning and takes employees and management through all the rights and wrongs — a visual and dramatic rendering of  its roots causes and decision-making — it could be good.

In my book on reputation recovery, one of the stages of recovery is “Rewind.”  The opening story in the chapter is about the Columbia spacecraft explosion and how NASA seriously investigated the organizational causes of the accident because of the breakdown in leadership. The lessons learned from the shuttle tragedy were clear — organizations must carefully learn from the past because the cost of failing to do so far exceeds the cost of doing so.  This way of thinking might just apply to the reasons behind the BP film and could set an example for other companies facing internal communications challenges when recovering their reputations.  

The quote that sticks in my mind from thinking about the opportunity that this film provides to the future of BP is what one CEO wisely said when he led his company through a massive reputation recovery: “We had to settle with the past to prepare the future.”

A double whammy this week.

Just saw that a new corporate reputation survey by Prophet come out today and tomorrow Fortune’s World’s Most Admired Companies survey hits the airwaves. Prophet surveyed consumers in the U.S. and found that “attributes related to openness, ethics, and the kind of public dialog companies foster in response to marketplace events and circumstances were deemed most important.” Companies’ behavior in response to crisis and difficult times apparently makes a difference in perceptions.  How people deal with adversity matters in our perceptions of friends and colleagues, why not companies? I was not surprised reading this since a company’s character and values are most on display when companies are under assault or scrutiny. You learn alot about people and companies when they are in the spotlight or shadows.

I finally found a moment on the train to read McKinsey’s latest research on how well companies manage their government relations. In fact, today I was talking to someone about this so it was definitely top of mind. He made the point that reputation matters even more today because government has such a big role in business affairs and can affect economic outcomes.  There is one CEO I quote often who said that government affairs was his 7th line of business. Love that line.

The McKinsey survey was conducted among corporate executives around the world and this was my favorite part. When asked which stakeholders would have the greatest effect on corporate economic value over the next 3 to 5 years, 74% named customers. Makes sense. But second on the list came government/regulators at 53%.  This highly influential group ranked higher than employees (49%), investors (28%), suppliers (17%), media (measley 9%, ouch), NGOs (mere 3%, ouch) and organized labor (2%, definitely ouch).  When you look at industries such as health care, energy and financial, government/regulators are #1 for each….ahead of customers and all the rest when these executives are thinking out 3 to 5 years from now. Now that says something about where reputation will be headed too.