Archive for October, 2011

   I always learn something new when I go to the Council of PR Firms Critical Issues Forum. The 2011 event was this past week and Robert Gibbs spoke, the former White House Press Secretary for President Obama. He delivered a perfect keynote presentation — attuned to the audience, well-timed, thoughtful and chock full of good stories and insights.  In my view, he sure shored up his reputation. A few things caught my attention….

• Go where your customers are. Gibbs told the story of how he was told that President Obama had some down time in LA during a visit and how he suggested that the president visit the Jay Leno show. Of course, people thought he was crazy but he underscored the importance of going where your voters (customers) are.
• Use technology strategically. Gibbs decided to use Twitter when he realized he could get a jump on what journalists were thinking before, during and after press conferences.
• Social media reaches more. In the 2012 election, the social media team will be the largest one in the President’s re-election campaign. As he said, it strengthens and grows the brand and insulates it when things go bad. I wanted to tell him that “inoculate” is an even better term to use. Gibbs said to think of this coming year as the Twitter Election. 
• An event is 2 Tweets.  He said that brands must be disciplined today and since Twitter is how news gets made these days, 2 Tweets = event. Interesting concept, right?
• Tough times are just that, tough times. The BP/Gulf of Mexico oil spill was one of the toughest times in the White House. Gibbs said he can think of 100 things that they could have done better now. Hindsight.
• 2008 vs. 2012. Expect to see more story telling from “real” people in the re-election campaign. Stories from real people are powerful validators.
• Which is harder — selling products or politicians? Gibbs says politicians.
• Be careful what you put in writing. This fascinated me. He said that because everything in the White House is archived, people are careful about what they say because it could be totally misunderstood 12 years from now or some such time.  And because of the archiving, no one says anything all that interesting!
• Get out of the bubble. This is the same for CEOs. Find a way to get real and to be in touch with the average person. President Obama reads 10 letters a day from people who send him letters. He answers them and tries to figure out what can be done. But it keeps him in touch with reality which is sorely needed when living in the White House or DC. CEOs should get out of their offices and ride the subway or the bus when they can.
• Politics is “yelling for a living.” I thought that’s exactly right.  And a good note to end on.

One of the advantages of having worked at several companies is that you really get to understand how different cultures can be. In the newest strategy + business study — The Global Innovation 1000: Why Culture is Key, the researchers make the point that the most important ingredients in building an innovative environment is strategic alignment and a culture that supports innovation. They found after studying the world’s biggest spenders on R&D over seven years that “there is no statistically significant relationship between financial performance and innovation spending, in terms of either total R&D dollars or R&D as a percentage of revenues.” That’s a very revealing statistic. It is natural to assume that high R&D spenders would have the best bottom lines and most success. It just is not true.

Now that innovation spending is back on track after a poor economy, the authors conclude the following below. This is such a critical point for those wishing to understand innovation and what really is important in building a reputation for being a best place to work:

“Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture — it trumps strategy and leadership. This isn’t to say that strategy doesn’t matter, but rather that the particular strategy a company employs will succed only if it is supported by the appropriate cultural attributes.”

It always gets back to the people and the culture. The research is alot deeper than this but the quote above about culture trumping strategy and leadership just jumped out at me. I’d have to argue that the leadership provides the foundation for a culture that supports innovation and that leadership might matter even more than strategy but culture shapes success, and ultimately reputation.

   CEO training can be fraught with complications and wouldn’t it be a shame if you overlooked someone who could make a difference. Today I read about the new CEO of IBM, Virginia “Ginni” Rometty. Apparently CEO Sam Palmisano wanted to make sure that she had a worthy mentor in the year or so leading up to her possible naming as CEO. He asked the CEO of Frontier Communications, Maggie Wilderotter, to mentor her. They met several times over lunch.  According to the Wall Street Journal today, Ms. Wilderotter recommended that the possible CEO elect work more closely with Wall Street, the big banks and leading IBM customers she did not know as well as others. Apparently Wilderotter told Ms. Rometty that “Wall Street is a big part of the job when you are CEO.”

A CEO buddy system is a good idea for building a reputation to get the job. Now she will need help with her CEO reputation-building for her first 100 days. I have to admit, the ring of “her first 100 days” sounds good to me.

Sad day when you see the former head of McKinsey — Rajat Gupta – charged with insider trading that could lead to 11 years in prison. This happened yesterday during the Raj Rajaratnam Galleon trial. Here’s a quote-to-go for the day:

“You don’t get on the board of Goldman Sachs without having accomplished alot in your life and having a great reputation. But having a great reputation doesn’t give you a free pass to violate the law. Nobody is above the law, no matter how good their reputation is.” (Reed Brodsky, prosecutor)

Reed Hastings, CEO of Netflix, in response to recovering their reputation after several recent missteps:

“The focus is on bringing back our reputation and brand strength, but it won’t happen through grand gestures.”

  Not sure if you were sent this article about “green” rankings….based on another article in MITSloan Management Review by Auden Schendler and Michael Toffel (you have to sign in to get the article). It is definitely worth reading but the central premise is that many of the environmental ratings focus on the wrong criteria, namely failing to incorporate advocacy activities that influence environmental regulation. What the article says is that environmental ratings should also include whether a company’s political actions support or undermine climate action. From a reputational point of view, these sentences stood out:

Third party corporate responsibility ratings matter. They help consumers vote with their wallets, aid job seekers with employment decisions, affect employee morale, guide socially responsible investors and pension funds and generate good — or bad — PR for businesses. Research has shown that poorly rated firms respond by improving their performance.

We work with companies on rankings of all sorts. And these “green” ratings are very sought after. There is no perfect scorecard that I know about and yes, companies can game the system even when they don’t deserve the reputation burnishing. What else is new? But winning them is important to reputation-buidling of credentials in the environmental space. And for those companies that are not truly green today, these environmental scorecards push them to do better and that’s what counts in my book. I often tell companies to go ahead and apply for Best Place to Work awards because it gets the CEO involved and gets leadership focused on one day being among the chosen few. Even if you don’t win, you usually can get your scores to determine what you need to do better. The same goes for climate change. If you don’t win, that’s okay. Try again next year.

The article rightfully says that these rating systems should factor in other criteria such as political contributions, CEO advocacy and NGO relations. True. And they also rightfully say that these rating systems could benefit us all by spurring corporate activism “to solve one of the world’s most pressing problems.” True. But we should recognize how far we have come already. I remember when there was no such thing as ”green” ratings. As it’s been said, we’ve come a long way baby.

  I just recently saw the term “reputation laundering” in an article I was reading on the plane (which is where I seem to spend alot of time these days). I always like to mention new phrases that involve the word reputation. It is one of my favorite pursuits (which is pretty pathetic if you think too much about it). So I went to search for the term to find the article again and came across over six thousand mentions of the term.  The Guardian seemed most closely associated with the term because of their reporting on the practice in the UK, so they say.  What is it? It is the practice by institutions or individuals to disguise the source behind wrong-doing. Not a good thing. Just thought I’d call attention to the phrase in case anyone else found it interesting.

On another note, a colleague sent me an example of reputation response and recovery (thanks J). It an interesting interchange from the CEO of Deutsche Bank. Apparently Foodwatch approached Germany’s largest bank to warn them about the bank’s speculation in the agricultural market that they said was increasing hunger and poverty worldwide. Now what was different here is that the playbook changed. The CEO — Josef Ackermann — rarely responds to these types of criticisms.  At first, the bank rejected the accusations in Foodwatch’s report and petition. But in short order, the CEO responded in a letter to the head of Foodwatch by saying he shared their concern and would review the bank’s activities in the trading of agricultural commodities: “I share your sadness that so many people on our planet continue to live in poverty and must go hungry.” And Ackermann wrote in his letter:

“No business is worth risking the reputation of Deutsche Bank.”

  I was on a flight to the West Coast on Sunday when I witnessed a disagreement between a passenger and stewardess. I do not know what happened but it was clear that the passenger had complained about something and really disturbed the stewardess.  At one point, the stewardness made it clear she was not going to take the tirade directed at her and heard something about an arrest. Since the woman was a few seats ahead of me, I could not hear what the problem was. I did see that afterwards, the stewardess brought a handwritten note to the woman and heard her mention that it was from the pilot.  Surprisingly to me, the complaint had escalated to the cockpit.  The pilot’s note was not just a single lined entry but several sentences because I could see that it nearly filled the page. When we finally landed, three police people were at the gate to meet the passenger, her husband and the stewardess to interview them.

The whole incident made me uncomfortable but as I thought about it later, I realized that the pilot had actually taken the time to respond to the passenger’s complaint. And it made me think about how airlines really have their hands full with reputational issues and that leadership communications — from the pilot no less — can make a difference. It seemed like a smart, customer focused attempt to diffuse a situation that was going to go nowhere. Probably not a good use of the pilot’s time but perhaps the pilot’s note kept us from returning to JFK and disrupting all of our travels.

 This week we launched our excellent survey on what it takes to socialize a brand. It is among top marketing and communications executives in companies around the world. One of the drivers of world class social brands is being ever so careful about the assaults on a brand’s reputation.  We learned in the survey conducted with Forbes Insights that executives of world class social brand companies are 35% more likely than the average global company to report that their brand experienced an online crisis in the past year that affected its reputation. These social champions who have dealt with a recent online crisis are no stranger to the risks of the hyper-connected world — two-thirds (66%) report that they deal with negative online commentary on a daily basis (vs. 51% of total global companies). The latter point was good news to me although perhaps not so for companies. The reason I say that is because I often get asked about how often companies experience reputation crises and I quickly respond “daily.” Our research reveals that nearly two-thirds of socially aware companies are dealing with reputation threats and its just the tip of the iceberg. Just this week we saw Netflix and RIM in the news — some self-inflicted and some not.  If you want to read more about the blackberry crisis and my comments, go here. These types of online crises will only increase as the world gets smaller, more people go online and more are eager to share their opinion about brands.  Being vigilant is the job of everyone. Lets not fool ourselves — we all have to play cop.

Interesting news today from my very own Weber Shandwick. We are releasing a study today called Socializing Your Brand: A Brand’s Guide to Sociability that we did with Forbes Insights.  The survey was among nearly 2,000 marketing and communications executives with digital responsibility in 50 countries worldwide. As a reputation maven, I have to share the interesting insight about reputation.

According to the study, global brand executives believe that sociability is growing rapidly as a contributor to a brand’s overall reputation, from 52 percent today with a projected estimate of 65 percent three years from now.  Thus having a vibrant and thoughtful online presence is not for the weak-hearted brands. 52% is a substantial estimate which is only going to grow.

So for all those brands out there wishing to be world class, go get social. Check out the survey.