Corporate Communications Officers

Thoughtful interview in strategy + business with the former CEO of Campbell Soup, Doug Conant. His internal focus on the Campbell culture was refreshing. He realized soon after joining and surveying employee engagement that one out of every three employees was looking for a job. As he said, nearly 6,000 of the 20,000 employees at Campbell’s were dissatisfied. He knew what needed to be done with results like that. Here are two quotes that illuminate his thinking: “I also knew that you can only win in the marketplace if you win in the workplace first.” Also, “You can’t talk your way out of something you behaved your way into. You have to behave your way out of it.” He is dead right. Employee satisfaction has to be taken seriously if a company wants to succeed and build the best reputation that it can. When I was recently in Brazil, the head communications person at one of the largest banks in all of Latin America told us that they strategically decided to put employees first in their line of stakeholders.

I also wholeheartedly agree with Conant that leadership has to own its behavior. Words are critical today, especially when you have employees all over the globe, but if actions do not match the words of leadership, your employees will be the first to know and tell others that this is a company that does not walk the talk. Interestingly, Conant instinctively knew that to get the front-line engagement he needed to turn the company around, he would need it from his top people. So he set his sights on getting them “wildly engaged” in the work.

Conant has written a book titled Touchpoints. The basic idea is that every contact is a chance to make that tangible, meaningful connection with others. It is about that quality interaction that can advance the business and enhance satisfaction. Conant talks about the 10 to 20 handwritten notes he sent out as CEO every day – 30,000 over a 10 year tenure. I know about those notes. I got one. They made the connection and to this day, I have not stopped talking about my shock receiving his handwritten thank you note for spending time with me discussing CEO reputation.

Years ago when I wrote my book on reputation recovery, I told how disgraced Tyco International waited until they had proved themselves before launching a new advertising campaign. I wrote:

“When it was time to formally declare that the recovery process was officially in place, new CEO Breen initiated two noteworthy advertising campaigns. The first introduced Tyco’s brand-new 13-person leadership team that replaced the entire previous executive team. The advertising targeted to Wall Street, legislators, and employees featured the following statement accompanied by individual executive’s signatures: ‘‘We signed on because we believe Tyco has a bright future. We signed below to show you we mean it.’’ The signatures underscored the point that these executives had personally signed up for the mission. The campaign underscored how Tyco’s new leadership team was standing shoulder to shoulder behind Tyco’s improving reputation. The 13-person team portrait also communicated that new leadership was focused on the team, not the individual. According to Jim Harman, Tyco International’s vice president of advertising and branding, ‘‘The message behind this campaign was that Tyco had hired senior managers with the highest level of integrity from diverse manufacturing companies.’’

The advertising served as a reminder to influential stakeholders that Tyco was well on its way to rebuilding the reputation it lost.

AIG has now joined these ranks. If you recall, AIG was the recipient of the largest government bailout during the recent economic crisis and was on the short end of the stick when it came to public outrage. Since the new CEO, Robert Benmosche took over in 2009, AIG rebuilt its business and began paying back its loans to the US government. No one believed they would do it. And yet just yesterday, the government sold off what was left of AIG securities for a surprisingly big profit of nearly $18 billion in profit. Although they launched this new YouTube campaign about their comeback several weeks ago with the tag line, “Thank you, America. We’re proud to be keeping our promise to stand by you,” their timing is right and I dare say they hit the right notes in the campaign.

 A recent study just came out saying that CEOs think that marketers are losing sight of their jobs. In the survey from Fournaise Marketing Group, 70% of the CEOs surveyed said that marketers and communicators are disconnected from business results and are living “too much in their creative and social media bubble.” There did not appear to be a separation between marketing and communicators so I imagine that CEOs consider them one and the same.  Although CEOs consider the marketing metrics of the day (Likes and Twitter followers) interesting, they do not consider them critical to advancing the business. The metrics CEOs were most interested in were market share, sell-in, sell-out and linking communications spending to gross profit and other tangible returns. As the CEO of Fournaise says, “They will have to transform themselves into true business-driven ROI marketers or forever remain in what 65% of CEOs told us they call ‘marketing la-la land.’” Quite the indictment.

This report on CEOs was in direct contrast to what we learned in our survey with Spencer Stuart on what is on the minds of CCOs (chief communications officers) around the world who believe that their senior management wants them to improve reputation and get their social media operations up to par. This made me wonder whether CEOs do not fully understand the impact that social media can have on their businesses and therefore consider it less than mission-critical today. Or whether marketing communications professionals were missing the boat altogether and picking up on the wrong signals. Like most things, I tend to think it is somewhere in-between. CEOs need to understand how the ground under their feet is shifting when any individual can harm a company’s reputation and bottom line and marketing communicators need not only beef up their business acumen but better explain the ROI on social media.  The two studies provide a study in contrast, to say the least.

Caught up on some reading this week. Lucky me.

One study comes from Echo Research and Reputation Dividend. They found that corporate reputations contribute to a total of $3.2 TRILLION to market cap in the S&P 500. Big number.

Reputation Institute released a new global survey report among corporate reputation officers (CROs), Navigating the Reputation Economy. The respondents are those senior officers who identify themselves as the senior-most person responsible for “setting their company’s corporate reputation, marketing, corporate communications/public affairs and business strategy.” One of their most important findings mirrors what we learned in our study on the company behind the brand. RI found that 80% of CROs say people’s willingness to recommend their company as a place to work or as an investment is driven by the perceptions of the company overall. Same for direct purchases — 38% say that purchase decisions are driven by the company behind the product or brand rather than what is actually for sale.

What is most particularly illuminating about the RI study is their depiction of where companies fall on the reputation management continumm. They describe a five-phase journey that companies go through from phase 1 (exploring reputation) to phase 5 (integrating reputation into  business planning and company strategy). Phases 2 (customization of measurement and management) and 3 (business planning integration) come before phase 4 (cross functional implementation and accountability).  Not surprisingly, only 13% of companies fall into the Advanced Phase among the 318 companies in the study.  Most companies fall into phases 2 and 3 (69%). Eighteen percent fall into the phase 1 exploration phase. My experience agrees with this assessment. Most companies are in the phase 2 and 3 phase. Few really fall into the most advanced stage.

The distinctions between Early Phase and Advanced Phase companies could not be clearer, according to RI’s results . Advance Phase companies are 2-3 times more likely to:
1.    Understand reputation across stakeholders and markets
2.    Understand specific business impact of reputation
3.    Have an internal council or steering committee to champion action
4.    Have senior executives accountable for corporate reputation KPIs
5.    Have reputation integrated into long-term enterprise vision, goals, and priorities

The favorite communications channels for reputation management are the company website, the annual report, stakeholder events and CSR reports. Advanced phase companies are more intense in their usage of nearly all the channels. However, as we have seen in elsewhere and in fact our own research, social media is the one channel where early phase and advanced phase companies are nearly the same. My sense is that this is because social media is still fairly new and experimental in the eyes of CROs and everyone is using it in the same way without being sure about what works and what does not work. All they know is that they have to do it!

I wanted to return to the subject of CCOs. I just spoke via SKYPE to a group of communications professionals in Nigeria about the importance of CEO communications and corporate reputation. As I was preparing, I started thinking again about how useful the information we at Weber Shandwick gleamed from The Rising CCO IV was. This is the study we do annually with Spencer Stuart. One of the factors I mentioned in my talk this morning was how CCOs have to battle perceptions about the industry they are in along with their own company reputation.  When we asked CCOs worldwide what consumer attitudes were impacting their jobs the most over the past two years, their responses can be seen in the chart below. Industry reputation led the list. I have to admit being somewhat surprised. When we compiled this list for the survey, I was thinking that the economy and privacy had to be the biggest issues of the day when it comes to public opinion. The fact that privacy was so low raises the question about whether social media gets us all hyped up about privacy problems or whether CCOs have their heads in the sand when it comes to this particular issue. Not sure. What I do know is that industry reputation needs managing today and just adds another layer to the complexity of the CCO position.  And perhaps this is also why CCOs said that the top quality for success today is crisis management.  Not only do they have to manage their own company’s reputation and that of their CEO’s but they have to look at everything with an industry lens as well.  A crisis that happens to a competitor impacts everyone in the industry.  Today, reputations are painted with a very broad brush. Just in the past week or so, we have seen how the reputation of the financial sector is back squarely in the spotlight.

  Talking about industry reputation, you should take a look at Reputation Institute’s recent global RepTrak results about the ups and downs of industry reputation. Most industries have an average reputation with only three standing out – consumer products, food-manufacturing and beverage.  At the other end, the bottom, we see financial-bank, financial-diversified, chemicals, telecommunications, utilities, and way on the bottom tobacco.  Pharmaceuticals saw a slight increase over 2011.

Industry associations have a hard challenge ahead of them.  22 of the 25 industries were average or below. Being average is not good enough either in this catch 22 world.

Every year, we at Weber Shandwick work with executive recruiter Spencer Stuart to survey worldwide CCOs (chief communciations officers) about the challenges and opportunities facing them. The survey is called The Rising CCO.  It is a subject that I have always been very interested in.  My interest does not stem solely from being in the public relations industry but in the complexity of the communications position today. How a company communications in good times and bad speaks volumes about the management, its values and its attention to the public trust. This year, as in other years, we asked about the impact of social media on CCO positions, what senior managment expects from them, how their effectiveness if measured, the number of board meetings they attend, the qualities needed to be successful, crisis management and a host of others. Here’s one fact for today that has to do with reputation. I will continue to discuss some others that are reputation-related.

We learned from CCOs that improving corporate reputation tops the list of senior management’s expectations for corporate communications this year, as reported by approximately two-thirds of global CCOs (65%).  This focus on reputation was followed by obtaining positive media coverage (60%) and increased support of brand reputation/marketing (56%). This prominence for reputation is not surprising  given  that reputational crisis is practically a fact of life for large companies globally – nearly three-quarters of CCOs (71%) experienced a crisis threatening their reputation in the past two years. I was not surprised either by how important positive media coverage is although I know how difficult that is to secure enough of what will please a CEO. Quantity and quality always matter at the top.

More to come on other interesting feedback from the study.

Reputation Institute came out this week with their RepTrak Pulse survey for the US. It measures the reputation of 150 largest US public companies among consumers.  In addition to the usual who’s up and who’s down, RI reveals some interesting stats that confirm our research results on Companies Behind the Brand. I was delighted. As RI says in its press release, “Since 2009, U.S. companies have been competing in a new Reputation Economy, where WHO THEY ARE matters even more than WHAT THEY PRODUCE, according to general public sentiment. Framing this in the context of critical consumer behaviors, including purchase consideration, loyalty and recommendation–company or “enterprise” perceptions explain 60% of these behaviors, with product perceptions only accounting for 40%.” This is a big shift which we agree with.

In addition, RI asked Chief Reputation Officers (CEO, CMO and CCO) several questions and learned that 51% name the CEO as the person with the responsibility to set reputation strategy.

Fascinating results.

A Wall Street reputation study among marketing and communications executives at financial services firms was released this week.  When asked to rate themselves, only 34% gave themselves an above average grade while 9% gave themselves a grade of  ”perfect.”  Wonder who those 9% are? The remainder — 57% – gave themselves average or below.  The survey by Makovsky and Company had some intriguing results:

• 53% said that Occupy Wall Street impacted their business
• 71% said that Occupy Wall Street will last beyond the upcoming election
• 38% were surprised by Occupy Wall Street (time to be better prepared)
• 74% believe that increased regulation of the industry will help to improve financial service firms’ reputations and rebuild trust with customers
• 81% are worried about negative perceptions that exist about executive compensation
• somewhat more than 40% believe that social media has a positive impact on their company’s reputation; over half only perceive a neutral effect (fair enough)

So what’s a company in the financial sector to do? According to the findings, executives believe that management leadership, quality products and service, and a focus on reputation management will help restore reputation.

The killer finding is that 96% of executives agree that the industry brought the problems on themselves. You don’t get too much higher than 96%. That’s a outright acknowledgement.

Of course, today I saw an article saying that college students are still dying to get into the financial services industry. Many are waiting to hear news of summer internships and they are eager to make their way to the the cavernous alleys of Wall Street. So be it. However, I do think that this is the time for financial services firms to hunker down and repair their reputations for the long-term. I vote “yes.”

Job descriptions for leaders today have to begin including public relations expertise. Just looking at this week’s headlines convinced me that CEOs have to be PR crisis experts to be qualified for the job. I was thinking about this when I read the oped in The New York Times from an investment bank’s employee and hearing the news about the Afghan killings by a U.S. military person. I also just read an indictment by a former Google employee about the oversized focus on advertising since Larry Page took the reins at the search giant.  Whereas we used to enumerate the operational excellence of CEOs-to-be, today we should seriously consider whether they are crisis-seasoned enough. Bank CEOs, presidents and Internet champion CEOs have little time to respond when their organizations or countries are making breaking news. I hold my breath waiting for them to respond. Every word is dissected and critiqued. Not easy.

Years ago, I worked on a research project about how pr-savvy board members were. We looked at how many board members  in the Fortune 500 had “any” communications experience. Sad to say, there were few. I used to wonder how these board discussions went when no one in the room knew how to deal with detractors. Now I realize that not only do boards need some practiced PR professionals among their board members but CEOs too need to also be PR- tested. Of course, corporate communications officers are there to work alongside CEOs experiencing a crisis but CEOs themselves need to be good at communicating their positions and steadying the troops (so to speak). Tone is sometimes everything.

Here are remarks from the highest offices of the US government in response to the Afghan rampage. Wonder what you think?

“And obviously what happened this weekend was absolutely tragic and heartbreaking. But when you look at what hundreds of thousands of our military personnel have achieved under enormous strain, you can’t help but be proud generally.” — President Obama

“This terrible incident does not change our steadfast dedication to protecting the Afghan people and to doing everything we can to build a strong and stable Afghanistan.” — Secretary of State Hillary Clinton  

“Our thoughts and prayers are with the families and their entire community.” — Deputy American ambassador to Afghanistan, James Cunningham.