Archive for April, 2012
Just came across some research from ReputationInc that holds some very interesting information. Here are the main facts they discovered by examining the curriculums of the leading Executive MBA programs identified by the Financial Times. They were looking to see how reputation was incorporated into the course work.
• 1 in 5 leading EMBA programs teach none of the 10 core reputation disciplines
• Just one of the 50 leading EMBAs has ‘Reputation’ as a core module
• Communications & relationship building skills are taught in less than 20% of programs
• Government & policy relations is covered by fewer than 1 in 5 EMBA program
• Governance and ethics is the most popular reputation discipline being taught to business leaders today (no surprise there)
ReputationInc cites McKinsey research that found that one-half of global CEOs say managing external affairs is one of their top-three priorities. Yet one fifth of the world’s top 50 global Executive MBA programs do not offer any training in the core disciplines of reputation management. They report that the missing disciplines include CSR, stakeholder engagement, government relations, communications, and reputation management strategy.
More worrying still, just two of the top 50 business schools surveyed offer a dedicated reputation
module and 80% offer no training on either public affairs or external communications – the two core “hands-on” skills executives need to build reputation. “The results reveal a frightening gap between the reputation skills business leaders must possess in 2012 and the cursory attention they get in the traditional executive MBA.”
The programs with the highest ranked scores for including reputation are Henley Business School, Essec/Mannheim, and the University of Texas at Austin: McCombs.
I wholeheartedly agree with this statement: “On this evidence, companies and shareholders should be concerned that Executive MBA programmes risk creating ineffective business leaders who leave academia without the skills to actively manage the precious asset of corporate reputation,” said John Mahony, CEO, ReputationInc. “Reputation management skills are vital for today’s CEO who sets the tone and mood for a corporation and must lead from the front in communicating the purpose of the brand and its value to society. Many managers are not born ready to meet this challenge and will benefit from coaching and confidence building in reputation, something today’s Executive MBA courses fail to adequately provide.”
I agree wholeheartedly. Goldman Sachs’ CEO Lloyd Blankfein on public opinion and reputation of Goldman Sachs:
“I think the average American probably had no contact and had never heard of Goldman Sachs before three years ago. Shame on us in a way for not anticipating how important that would be. We’re an institutional business with no consumers. It turns out, another name for consumers are citizens and taxpayers. They became important for reasons that are obvious. They always should have been important, but it wasn’t part of our audience as we thought about it. Now we will have to develop those muscles a little better than we have. Shame on us.”
Just read an article in The Economist (which I love) that questions the business of reputation management. The columnist attended a recent meeting in London held by the Reputation Institute (RI) on their new RepTrak results for British companies.
The writer rightfully acknowledges that we are living in a “reputation economy” where institutions and individuals literally trade on the currency of reputation and this type of exchange makes “intuitive sense” in a society where Facebook is worth more than many Fortune 100 companies. Reputation Economy is the term used by RI and its professionals, led by Charles Fombrun, and continue to provide valuable, far-reaching insights to companies around the world. The writer, however, raises several interesting objections to the effectiveness of the reputation management industry as it stands today.
First, he/she (have no clue) objects to the idea that many different factors as disparate as product quality and corporate citizenship are all rolled up into one understanding of what reputation means. That may be true, but I am not sure why that is bad in such a complex and fragmented world where every individual becomes an interest group. For us reputologists (I just made that up), the factors contributing to corporate reputation vary depending on the company’s history, industry and situation they are facing. For example, in the financial industry, unlike say the automotive industry, it is often difficult to distinguish one company from another by focusing only on their products and services. Their reputations are far more likely to be built on sheer trust in the perceived integrity of their leadership and governance.
The columnist’s second objection to reputation management today is the assumption that companies with positive reputations will find it easier to attract customers and withstand crises. As evidence of the supposed weakness of this assumption, the columnist cites many companies with strong bottom lines despite terrible reputations: e.g., tobacco companies (harmful product), Ryanair (poor service) and Daily Mail (mean spirit). Yes, there are always companies that will make gobs of money despite wrong-doing and poor service. Nevertheless, these companies have and will continue to have a hard time attracting and retaining the best talent. But in this online world where advocates and fans matter more than ever, it will be harder to keep that bottom line as stable as it once was.
But the greatest objection to the reputation industry, according to the columnist, is and I quote… “its central conceit: that the way to deal with potential threats to your reputation is to work harder at managing your reputation.” He/she continues with… “The opposite is more likely: the best strategy may be to think less about managing your reputation and concentrate more on producing the best products and services you can.” Here I agree at least in part with the columnist’s thinking. The best way to build reputation is to “have a customer” as Peter Drucker always said. Without customers, there is no business to have a reputation worth building. The reputation industry, however, does not urge industries to ignore producing the best products and services in favor of managing reputation. To the contrary, building the best products and services is part and parcel of a good reputation. Also, however, today’s society is much more complicated and often it behooves a corporation to do more than just having great products and services. Apple, for example, may have the best products but if it does not give a damn about how it treats employees or contributes to society, it will face problems that if allowed to accumulate may well threaten its bottom line. We see that now with regard to questions about their handling of factories in China.
I think that the columnist should rename the article to Why companies should worry MORE about their reputations or else.
The Power of Reputation. Chris Komisarjevsky’s new book, The Power of Reputation: Strengthen the Asset that Will Make or Break Your Career, is a must-read for anyone interested in understanding how to steer their reputation into a career worth having.
Chris provides practical, easy-to-apply advice, techniques, tips and best practices on how to build that reputation you always wished you had but maybe never planned with very much care. He covers all the many elements that make up an enduring personal and professional reputation (they are the same, you know) such as values, character, behavior, trust and communications.
I regard myself as an insider when it comes to Chris’ new book. Chris was CEO of Burson-Marsteller when he hired me and throughout my time there, encouraged me to build the bank of reputation research we launched as a firm. He also served as a role model for how CEOs should lead their organizations and build a best place to work.
There are so many great examples that I remember from his leadership and I got to experience up-close how the character of the person at the top sets the tone for the entire organization. There is no denying the inextricable link between the two. Perhaps for that reason, I was particularly drawn to the chapter on Values. Chris provides a list of values that can guide your career path. It seems that everyone should be given that list as an exercise when they start a new job so they can be regularly reminded to follow it. The Power of Reputation also provides terrific real-life examples and anecdotes from a wide variety of CEOs who have been faced with reputational issues and had to decide what was most important to the organization and its members.
Overall, if you are looking to better understand what you stand for, what your company should stand for, and how to build trust and an enduring career, this is a great book to read.
P&G is announcing its new corporate campaign that is a “global serenade to mothers.” It is covered in an article today. The reason this is big news to me (and I am not an Olympian’s mother) is that it is part of the P&G initiative to focus on the corporate brand behind the products they sell. Our research on The Company behind the Brand: In Reputation We Trust is all about the increasing interdependence between corporate and product brand reputation. As the global CMO says, “P&G is in the business of helping moms.” Or he could have said that P&G is in the business of building its corporate brand reputation. The new campaign is focused on the moms of athletes, particularly Olympians. Right on. As we learned in our recent survey, 87% of executives report that the corporate brand is as important as the product brand. And consumers also agree — 70% of consumers in markets around the world say that they avoid buying products if they do not like the company behind the brand. We are releasing some more information shortly from the study on the link between CEO and reputation as well as the impact of leadership communications so check here soon.
Although I made a wholehearted attempt not to work on Sunday, I could not pass up musing on an article I read on Walmart’s new partnership with the Environmental Defense Fund and a few stats on reputation recovery. Thought I could post it today. When companies ask how long it takes to recover and restore reputation, I usually say four years, give or take. Back in 2005, Walmart’s then CEO Lee Scott decided to behave differently and reclaim its reputation. It had a lot of work to do, certainly in the public’s mind. One of the ways Scott decided to do that was by reducing its environmental footprint. Fast forward to 2012 (seven years later). In the article, it says that, “About a quarter of Americans now have a favorable impression of Wal-Mart, about double the percentage that did in 2007 (the earliest available figure for Wal-Mart), according to the YouGov BrandIndex, which measures consumers’ impressions of companies and products.” I think that it has been a steady build from 2005 and seven years later, Walmart is seeing the fruits of its reputation labor.
[I am not sure why The New York Times refers to Walmart as Wal-Mart but it does. I checked the website and Walmart changed its name to Walmart, no dash and small M, a while ago. ]
Thought I would check out Pinterest and see if anyone was posting on reputation or CEO reputation. Why am I not surprised that the pickings are slim. Pinterest is not exactly the place where people want to pin interesting items and favorite photos or sayings on reputational matters or CEO quotes. But I had to take a look. For “reputation,” there are a bunch of quotes and the same infographic over and over. Seems to be a favorite. It is about how to manage your personal e-reputation and its from a reputation management agency in Geneva. Good for them.
As for CEO reputation, there are two items pinned of photos of people. But mostly a non-pinterest event. Thought I’d see a little more but no.
Infographics seems to be popular on pinterest. They add visual splendor. I have a pinterest account but never started it. I might just do that today. Might be fun. We will see.
Prophet, a brand consultancy, released its recent reputation survey today. The survey was conducted among over 5,000 consumers in the U.S. Among the most important drivers of reputation rankings were:
- Is a company whose products and services make a difference in my life
- Is a company that inspires me
- Gives me peace of mind
- Is for people like me
Clearly, the above highlights that consumers are thinking of reputations in terms of emotionally-driven factors and ones that resonate with their personal lives. Not a surprise considering how difficult the past few years have been economically speaking. Companies need to think about communicating less in terms of functional performance and more in terms of what they stand for. We’ve noticed this shift ourselves and it continues to be more dramatic each year. It falls in line with the findings from BAV (Brand Asset Valuator) that I have mentioned on this blog before where they found that generosity and kindness have risen profoundly in terms of key reputation drivers among consumer populations. The world is going soft! Maybe that is all you can depend on these days.
Another finding is that consumers are twice as likely to purchase, pay a premium for and recommend products from companies with the best reputations versus those that are less liked. Reputation pays! They also report that companies with the best reputations “convert customers from considering a company’s products/services 90% of the time.” This conversion figure is lower at companies with less than stellar reputations — 60%.
Another result that confirms again that reputation and brand reputation are aligning at a greater speed than ever imagined is mentioned in their report: “Prophet’s reputation study found that reputation and brand have overlapping drivers that make both critical for creating impact throughout the purchase funnel. While a company’s brand often plays a crucial role in making customers aware of a company, and is important for driving long-term loyalty, reputation is critical for ultimately driving consideration and purchase.”
The survey looked at 150 reputations so take a look. Winners and losers for all.
A week or so ago, I started a new Twitter account on social media for CEOs — @social4ceos . As you know, I’m interested in how CEOs are adopting social media at all stages of their tenure — in the first 100 days, year one, year two and so on. At Weber Shandwick, we did an audit on Fortune 500 CEOs and their participation in social media… Socializing Your CEO and we are working towards the sequel.
Just wanted to let you know that I will be providing information a la Twitter on the topic of Social CEOs to help steer CEOs and their executives towards the social side of the wired hemisphere.
Just read this article in Forbes about Amazon’s Jeff Bezos’ number one leadership secret. I’ve followed him for years and enjoy reading about how Amazon has grown from a bookseller to an everything store online. I had already been thinking about about the importance of employees and customers for new CEOs when I read that Bezos’ number one leadership secret is that the customer is always right. There is this example described in the article that when Bezos calls meetings, he leaves an empty seat at the conference table for what he calls the customer’s seat. A potent reminder to bring the customer’s point of view to the table. The article hints at the fact that Bezos has built his hugely successful business bent on “coddling his 164 million customers, not his 56,000 employees.” This has me wondering that in this age of the Internet and social media galore, if customers are now more important than employees, maybe because of sheer size? The pendulum seems to be swinging again anyway. It used to be that all business activities were primarily all about customers, then all about employees and now… it’s all about equal parts’ employees and customers but with customers gaining the upper hand again. The Internet has created a sense of urgency about how satisfied your customers are. Probably because they spread word of mouth more quickly and seem to have more power than employees. They can advocate or criticize your business approach or customer service online for all to see. They have more power because they have so many choices from which to buy from. The answer for new CEOs, however, appears to be focusing on employees with a healthy dose of understanding what your customers want and quickly scaling to reach them online to confirm what employees are telling you. Something to think about over the next few weeks. Whose more important — employees or customers for new CEOs and CEOs who’ve been in office for some time?