There are many ways to rebuild reputation but one way that companies might consider when recovering from a crisis is developing a Compliments page where employees and non-employees can anonymously thank those front line or other employees for doing their jobs well and conscientiously. I spoke to a company a short while ago as they were dealing with a reputation crisis and suggested that they start a Compliments page where community members could thank those front line people they encounter frequently for doing a honest day’s work. It could help. Of course, the site would attract uncivil types but there must be a way to delete them if they stray too far from the site’s purpose and goals.
Some universities have being doing this for a while. It started at Queen’s University in Ontario because the founders wanted to find a way to counteract bullying. University of Pennsylvania has a Compliments Facebook page as does Penn State. On the U of P site, people thank others for returning their lost wallet, for the sense of accomplishment they feel after doing nonprofit work, to a capella group for their beautiful sound and send support to a fellow classmate struggling with pain. The U of P Compliments page has the goal of “learning to do good and spread good.” Penn State’s site says that it is a social project to spread happiness.
Compliments pages are a wonderful idea considering that incivility that can sometimes surround and engulf us. In Weber Shandwick’s Civility in America 2013 study, we found that 70 percent of Americans believe incivility has reached crisis proportions. With Americans encountering incivility more than twice a day on average (2.4 times per day), and 43 percent expecting to experience incivility in the next 24 hours, dealing with incivility has become a way of life for many. Maybe it is time to turn this tide of negativity.
Compliment sites can be contagious and make people feel good despite their company’s blemished reputation. It could give an employee that extra boost they need to be productive and positive when they find everything uncertain. Hearing a compliment might keep an employee loyal to his or her company and make them feel they are doing their part in getting their company’s reputation back on its feet. Companies might consider trying this and seeing what happens. Reputations get repaired in the oddest ways.
None of us want to ever underestimate the importance of corporate culture and the impact of employee satisfaction on performance. It is not just window dressing. A study by Professor Alex Edmans at London Business School found that when a company makes it onto the Fortune 100 Best Companies to Work For list, it generates 3.5% higher stock returns per year compared to its peers. To be exact, it found that companies listed in the “100 Best Companies to Work For in America” generated 2.3% to 3.8% higher stock returns per year than their peers from 1984 through 2011. Management journal, strategy + business says this about this effect of employee satisfaction,”There is money to be made from employee satisfaction. Let’s all get rich and happy, but not necessarily in that order.” I might have to argue with that but anyhow…here are the facts from the research. A great stat for demonstrating that it pays to build a terrific culture:
The results clearly point out that job satisfaction is beneficial for firm value and ultimately, reputation.
Read about it here.
I often get asked how entrenched CSR/corporate social responsibility is in America. Afterall, CSR activities and behavior are an important driver of reputation. From my travels, I used to think that CSR was more deeply embedded in European company thinking but over the past few years, I’ve come to think that CSR has taken a greater hold in U.S. companies. Therefore I was particularly interested in hearing how CFOs regard the importance of CSR, the ones who have to sign the checks for embarking on this critical reputation-building initiative. With CSR, once companies start the process, there is no turning back. We gladly saw during the financial collapse of the past few years, that companies did not abandon their CSR efforts. They may not have grown their efforts but they certainly held steady. This speaks to the power of the commitment from the top, including CFOs.
A survey by Duke University’s Fuqua School of Business and CFO Magazine Global Business among senior finance executives across six continents recently reported that U.S. CFOs regard the importance of CSR to a lesser extent than their global peers. Nearly half rate CSR/sustainability (51%) as important in their business strategies compared to their counterparts in Europe (63%), Asia (67%), LatAm (76%) and Africa (83%). When asked why they engage in CSR activities, the top reasons according to the sample of U.S. chief financial officers are:
- It’s the right thing to do (66%)
- To improve external reputation, brand or image (61%)
- To improve internal good will, employee morale, employee hiring/retention (49%)
- In response to legal/regulatory requirements 27%)
- To improve cost efficiencies (14%)
- It increases customer demand (13%)
- Helps drive innovation (11%)
- To improve the bottom line (10%)
Interestingly, doing well by doing good and corporate reputation are at the top. CFOs in the U.S. are surely getting CSR religion. They are finally seeing that helping the world is the right thing to do and improves company reputation and also helps drive the best talent your way. I was a bit surprised that CFOs did not realize the growing relationship between what customers are now demanding from companies in the way of sustainable behavior and their own CSR initiatives. As we have repeatedly pointed out at Weber Shandwick, the link between customer expectations of responsible companies and their willingness to buy those companies’ products and services is stronger than ever. I am confident, however, that the interdependence between corporate responsibility and customer purchase decision-making will only grow in the years ahead.
The ongoing Duke University research provides good fodder for realizing that U.S. CFOs have a ways to go in realizing the importance of CSR and how it positively improves the bottom line. That’s where the BIG divide exists.
I found this interesting example of how reputation can be managed simply by building a strong and prideful culture for employees. It is a lesson to us all. The article was written by the editor of American Banker and reveals her interesting perspective:
“In terms of how employee experience influences media coverage, I offer the example of two prominent retail brands that I used to cover for a major metro newspaper. One had a disgruntled employee base that was great for leaks that led to juicy stories. From the other, I never got anything aside from the official company line. Even when the second company hit a rough patch, no one called the local paper to complain. Here, a healthy culture offset the impact of an unhealthy stock price: these employees were rallying around their CEO. They cared about their brand and were motivated to contribute to its revival.”
Employees in the second company rallied behind the company and kept its reputational equity stable. They were not roaming the Internet spreading discontent and doubt and catching the eye of some journalist covering the beat. This is how it should work.
A few weeks ago, I read the new Gallup report, The State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders. It is really worth a read because it holds incredibly valuable and meaningful information on employee engagement. One of the findings that leapt out at me was this — only 41% of employees felt that they know what their company stands for and what makes its brand different from its competitors’ brands. No surprise that 60% of executives say they know what their company stands for compared with only 40% of managers who can say the same. The startling fact is that only slightly more than one-third of “other employees” – those nonexecutives and nonmanagers – report that they can explain what their sets their company apart. If you flip this on its head, this finding is telling us that nearly two-thirds of lower level employees are unable and incapable of telling their friends, neighbors and family members – and even worse, customers – what the company’s greater goals and strategies for success are. Just imagine how difficult it is to come to work every day and not have that touch point to drive engagement and meaningfulness. When you next realize that most of these unprepared employees are likely dealing with customers, the urge is to sound the alarm bell. It is practically impossible for an employee to be a positive brand ambassador or brand advocate if he or she cannot articulate why a consumer should choose the company’s product or service over another and furthermore, why they themselves should even go the extra mile to make a difference to the customer. It is also practically impossible to expect your company to have an enduring reputation if it does not have employees who are engaged enough to know why they are there.
Gallup wisely recommends that all new employees should be trained so that they can recite the company’s brand promise and positioning within their first 30 days. I would recommend that management communicate communicate communicate until every employee understands their company’s higher purpose from day one. It needs to be drilled into the employee experience ad nauseum.
The news story about the CEO held hostage in China by employees has me thinking about the potential next new uprising — employees. We’ve seen leaderless revolutions spring up everywhere around the world recently but we have not really seen employees take matters into their own hands like this. Of course we have labor unions that strike and protest but they usually have contracts with employers and have set rules for negotiations. Employee preceptions are such an important driver of reputation that any mishandling or media attention (offline and online) related to dissatisfaction can seriously damage a company’s reputation.
Going back to the hostage American CEO, Chip Starnes, of the specialty medical supply company based in Florida — he was held hostage in his office for several days because employees were worried he would not pay severance as the company laid off some workers to move their functions to India where labor is less expensive. The CEO bought the factory 10 years ago so this was not a new relationship although it is hard to tell what the relationship between employer and employee actually was. As hostage, Starnes spent some time being kept awake and hungry, all under less than ideal conditions. Starnes sent an alarming cellphone video of the situation to his brother showing employees gathered around an executive-like chair in the middle of a hand-drawn circle on the pavement outside his office cell. Once compensation for employees was properly negotiated, he was set free although he has not left China as employees await a check clearing for their employment packages.
On one hand, the CEO and his company’s reputation for doing business in China was damaged (perhaps not damaged but certainly placed in doubt) but I’d add that the reputation of the business environment in China was also placed in harm’s way. And all of this was inflicted by employees who rose up and took matters in their own hands. We’ve seen other employee-instigated anger at employers such as confidential leaks, badmouthing online and boycotts but rarely something this drastic. Employee as activist could unfortunately be the next reputation-damaging trend.
Had a terrific visit to Weber Shandwick Toronto this week. My colleagues hosted a breakfast to discuss the new rules of engagement for employee engagement and reputation and I shared the platform with my colleague Kate. We met some terrific clients and had some very good questions afterwards, always a plus. Reputation and employee engagement are very much intertwined which made the two angles so easily compatible. We also met with some clients and had meaningful discussions about leadership, character and reputation. Afterwards I headed up to Muskoka for a conference among hydro distributors to talk about safeguarding reputation. Terrific conference put on by The MEARIE Group and to prepare, I learned alot about the challenges facing electricity distributors in Ontario. Of course, it was hard not to mention how Mayor Rob Ford of Toronto was negatively impacting the city’s reputation. On the day of the conference, the Mayor of Montreal resigned after being arrested.
At the breakfast meeting, I learned something that I aim to keep for posterity. Most probably, I will add it to our compendium on how to recover from a crisis. We have a master deck on how companies recover and build even better reputations and for me, it’s my team’s Bible. We catalogue all the recovery strategies we can because it always comes in helpful for the next client. But sometimes people have a way of saying something that just lights up your brain waves because it is so insightful and speaks so directly to a company’s character. This Canadian company had a crisis some years ago and one year later to the day, they ran full page ads reminding people of what happened and what they had done since the fateful event. The head of comms said to us while we were chatting at the breakfast that they ran the ad because…” ”We will be the first to remember, not the first to forget.” The company wholeheartedly owned the crisis and was not going to forget. Sage advice.
Just read Gallup’s new State of the American Workplace study which is about employee engagement. Several findings jumped out at me in terms of reputation. Gallup found that approximately 30% of employees are engaged while the remainder (70%) is actively disengaged or just not engaged. When you think about getting your employees to “live the brand or reputation,” companies are limited as to what they can do when the majority of their workforce is basically not present. Another revealing finding focused on how well employees really understand their brand’s being. Only 41% felt that they know what their company stands for and what makes it different from competitors. Thus, 59% are fairly clueless despite all the communications directed at them on vision, mission and values. Fairly disturbing when you think about how harnessing that knowledge could boost reputation. And imagine what happens when an employee who does not understand what the company is about collides with a customer. Not a good picture. Not good for reputation-building. The solution is for leaders to do a better job of making sense of what employees are doing from 9 to 5.
Who would have thought? Being a social CEO impacts company reputation! Well it’s true. There are true business results when CEOs participate in social media. We just launched our new Social CEO study this morning – The Social CEO: Executives Tell All, a survey of 600+ executives in 10 global markets with KRC Research about what they think about CEOs engaging online. Months ago we surveyed the landscape and saw that there really was little information about what executives inside organizations actually thought about their CEOs going social. We wanted to get a birds-eye view on how it actually makes executives (managers and up) feel to have a social CEO — does it make you feel good? nervous? embarrassed? ahead of the competition? inspired? We also were interested in uncovering how CEO sociability impacted the bottom line if at all.
Here’s a few findings to get you interested in downloading the report and infographic:
- The majority of global executives (76%) believe it is a GOOD IDEA for CEOs to actively participate in social media. The demand is there and it is not just in the United States.
- Executives recognize a multitude of returns when CEOs are social, including improved company reputation (78% say so) and employee engagement (75%). Clearly, CEO sociability is a competitive advantage and will only grow more so.
- CEO’s social media presence makes executives feel inspired (52%), technologically-advanced (46%) and proud (41%). Very few are nervous or embarrassed (6%). Nearly one in three (30%) find it amusing.
One of the more interesting tidbits was that executives are curious about what their CEOs are doing online. The majority (73%) search to see what their CEOs are saying in social media. CEOs are being watched carefully and social media now provides the opportunity to do so.
Most importantly, the time for social CEOs has come. The barriers are coming down and there is no one way to be social. Senior executives from around the globe envision big leaps in CEO sociability in their respective industries, projecting a 50% growth rate over the course of the next five years. Executives in financial services and business services expect the highest rate of CEO sociability growth over the next five years. As increasingly more companies, boards and leaders recognize that CEO sociability helps drive reputation, the more we will see CEOs stepping into social waters. The report discusses how CEOs can be social internally as well as externally. This is not just a social media game. CEO sociability can be driven from within. The point is that CEOs need to engage and using social means is their lifeline to starting a conversation with a broad portfolio of stakeholders.
More to come in my next post.
A former colleague sent me an engaging article from Gawker about CEOs and hubris. The first half of the article was actually about powerful CEOs sock exposure when their legs were crossed on stage. But the article hit the nail on the head when it comes to CEOs. “A Wall Street CEO primarily serves as the human embodiment of the firm—the competent, reassuring face that the many-tentacled monster projects to the world. As Nassim Nicholas Taleb once said, ‘A C.E.O.’s incentive is not to learn, because he’s not paid on real value. He’s paid on cosmetic value.’ This is not to say that these wildly successful men are dumb; it is simply to say that their job is not about muddling in the details, or tinkering with the gears of the machine. The CEO’s job, in public, is to frame the perception of what his company does, to cast the company’s activities in the proper terms, so that it sits in the public’s mind in an acceptable way.”
I thought that this quote and the part that I bolded sums up well the role of the public CEO — positioning the reputation of the company to its many publics in the most effective way. Of course, I could go on about how important the narrative is and how it should be distributed to maximum effect. But it does go to the central core of the CEO’s external job today. Internally, the CEO’s job is vastly different — modeling the values of the company, inspiring and motivating employees, building a top team, and communicating its mission and purpose. Creating meaning for the workforce and making sense of it all. A massive job.