Archive for February, 2013

I have been quoting Geoff Colvin from Fortune for years. He has a great way of saying what is important in reputations. Today, the Most Admired Companies survey is out and I quote him:

“So a critical question for business leaders now is how to manage in that environment — specifically, what must be managed for change, and what must be managed for continuity, if we’re to be admired in 30 years? The answer seems clear. Products, services, and strategies must be managed for change, faster all the time. Their life expectancies are shrinking. Brand and culture must be managed for continuity. Look at the three old-timers on today’s list…They possess arguably the strongest brands on earth, and all have titanium-strength cultures.”

He is so right….strong brands and culture and of course, leadership (goes without saying) make for the best reputations.

I love this list!

Boston Consulting Group issued a new report about debunking the myths of the first 100 days. It is worth reading if you are a new CEO. Several facts are worth sharing here however and I already dropped some into my presentation on steps CEOs should take in their First 100 Days. Since I wrote a book on the various stages of CEO tenure and how CEOs build reputation from day one to the very last hour, I try to update it as often as I can to keep up. CEOs have to keep up too because their first 100 days provides them with less time than ever before to get it right.

In one sidebar, the article describes how the CEO job has changed due to the growing complexity facing the modern day CEO. BSG found that organizational complicatedness (their word) has risen by a factor of 35 compared to 1955 (when the Fortune 500 was first created!). Many of these changes we already feel but BCG attaches facts and figures to these changes which are good to have.

Far more complex world for CEOs

•       Number of performance requirements is 6X more than in 1955. Then, CEOs were measured against 4 to 7 KPIs vs. the typical 25 to 40 KPIs now.

Far more scrutiny for CEOs

•       Many more stakeholders are now watching every step that new CEOs take These include activist shareholders, board members, regulators, lobbyists, online pundits, NGOs, consumers, media.

Far more dispirited workforce

•       New CEOs are starting when falling employee engagement levels have dropped as much as 14%.

•       Among U.S. employees, job satisfaction plummeted about 60% in 1990 to less than 43% in 2010.

I truly believe that the disengagement of the workforce is one of the biggest challenges facing CEOs. And what CEOs do in those first 100 days can make or break their tenure’s success. This is why I believe it is time for new CEOs to get a bit more social, like online!~

I am starting to wonder if thought leadership is morphing into an entirely new terminology in this digital age — content provider. Lately it seems that people who consider themselves thought leaders, like myself perhaps, are now being confused with content providers. This latter term seems to carry even greater cache because it falls into the digital realm. I was recently mentioning this dichotomy to a friend at Forbes who writes a column on thought leadership and we came to the conclusion that anyone can be deemed a content provider but not everyone can be called a thought leader. Most people on Twitter or Facebook provide content of sorts but it is not always unique or new or truly awe-inspiring. Many times it is a rehash of what is in the news. Here is my definition of thought leadership from my first book.

“Thought leadership encompasses the development of new ideas – ideas that keep a company at the forefront of change. It can transcend sectors and geographic borders. What is perhaps most significant about thought leadership is that it distinguishes and differentiates a company from its competitors. Thought leadership often breaks with business or industry convention, astonishes if not startles. Thought leadership reflects on the company and builds reputation.”

 There seems to be a continuum where simple chatter is at one pole of the continuum and true thought leadership at the other end. I would not pretend to know who would be those “genius” thought leaders but Malcolm Gladwell came to mind easily and he might be placed somewhere in the middle of original and genius. Those true thought leaders come up with thoughts that are so groundbreaking that everyone goes AHHHHHH.

chatter—>content provider—>thought leader—>original—>genius

It is hard to say what this all adds up to but the reputation of thought leadership as well as content provider needs better definition. Just providing content (even if it is more than what is contained in a press release) is different than providing new thinking that leads people to think twice or act differently or even possibly change lives. Something to ponder.

I was taking a look at the new Harris Poll RQ study that was released this week. Reputations of U.S. companies are always important to review in order to see how companies or sectors are improving while others are declining. The survey has some reptuational nuggets worth sharing here.

This year, 16% of the U.S. public said that the reputation of corporate America was improving, an increase of 7% over one year earlier. That is positive news despite the fact that 49% of consumers say it is declining. That is not a surprise because trust in business has reached its lowest depths over the past few years of economic decline. But it is a good sign that reputations are making somewhat of a comeback.

But what really has left me thinking twice is not the finding that Amazon.com is the most highly reputable company in America this year, a notch above Apple. What has me in a state of awesome disbelief is that Amazon earned nearly 100% positive ratings on all measures related to Trust and that among Americans who have discussed Amazon with their family and friends, nearly 100% of these conversations were positive about the online retailer. I have rarely, if ever, seen a company ever get that close to 100%. I’ve been conducting research for a long long time and this is an amazing feat. 100% satisfaction! A rarity.

The Harris Poll also found that more than 60% of consumers say that they now “proactively try to learn more about how a company conducts itself”  before they consider buying that company’s products and services. Again, the world of reputation is seriously changing when people care this much about a company’s treatment of employees, customers and communities. Values are increasingly playing a greater role in reputational perceptions and this market force is only going to continue. Mark my words.

An article in the New York Times on purpose-marketing echos my firm belief that the company behind the brand matters more than ever. In fact, Stuart Elliott says it himself: “Purpose marketing is becoming popular on Madison Avenue because of the growing number of shoppers who say that what a company stands for makes a difference in what they do and do not buy.” These socially conscious buyers are avid researchers and they know whether the companies behind the products they are considering treat their employees well, have high quality products and are well-led. The article is about Panera’s new advertising campaign that is based on the company’s core values — “Live consciously. Eat deliciously.” Has a nice ring to it.

Take a quick look at our research on the company behind the brand for hard evidence that corporate and product reputations are blending.  Perhaps I should coin a new phrase called reputation-marketing to join the marketing folks who now call reputation-building campaigns with a conscience purpose-marketing. Just about a year ago, I wrote a proposal for some new business and dubbed it reputation with a purpose. Has a nice ring to it too!

Reputation is often high on agendas these days.  Years ago, it was not usually number one but among the top three to five items that kept boards and CEOs up at night. This week someone sent me an issue of Operational Risk and Regulation and I quickly breezed through the table of contents online when I noticed that they had an article describing a risk survey among operational risk managers. This is not usually the typical stakeholder group I get asked about so I took a look at the various types of risks that were keeping them up at night or at least, stressed out during the day. Reputational damage was at the top of their top 10 list for 2013.  When I turned to the fuller description on reputational damage, the first sentence was quite boldly stated. “A good reputation has never been easier to lose — though this may not be a problem for much of the financial sector, as it doesn’t have one.” I understand where the author is going with this statement but the financial sector does have a reputation, just not a particularly good one. A company or sector can have a good or bad reputation and in some cases, somewhere in between. Most every sector, person and organization has a reputation. And just as a company can lose reputation over night or in seconds, so can it begin the process of redeeming itself by beginning the process of being straightforward, transparent and communicative. The financial sector, like many others, has certainly been battered but it does not mean that it is not crawling back and trying to restore its credibility. If anything, the financial crisis of the past few years has taught the financial sector to be more humble and that might just be a good place to start.

Ordnance Survey, in association with Operational Risk & Regulation

Reputation mandate. The new CEO of Barclays made it clear to employees at the beginning of the year what it would now take to repair the bank’s reputation and equally clear about what they did not want. The new CEO pointedly said in his memo to 140,000 employees that things were going to be different now and employees should know that…”The rules have changed. You won’t feel comfortable at Barclays and, to be frank, we won’t feel comfortable with you as colleagues.” Anthony Jenkins took over from CEO Robert Diamond who resigned when news broke out about Libor manipulation or rate-rigging.

Jenkins believes that the prior regime put short-term profits ahead of values.  Now that he was in charge, people have to commit to their reputation restoration program or hand in their IDs. Their program is called the TRANSFORM program and is based on living their values to restore Barclay’s reputation, not just to restore their bottom line. As part of their rebuild, all employees viewed a film of the bank’s history (“Made by Barclays”). Their new values and purpose, developed by their senior leadership group and Executive Committee along with many others, were also unveiled. Their Purpose is to help people achieve their ambitions “in the right way.” Their five values are Respect, Integrity, Service, Excellence and Stewardship. As this new program rolls out, people will be measured and rewarded according to these values. Sounds good. Ambitious. Doable. Will be watching.