Not a surprise. Today I read that maybe we need more CEOs like the new CEO of Citicorp who has a very low public profile. He is practically nameless according to the article. Barely noticed in the trendiest restaurant where banking moguls hang out for lunch. I probably could have predicted this. The headline reads, “Quiet Boss at Citigroup Setting Tone for Wall Street.” And as predictable, those CEOs who are in the news for good and bad reasons are being shunned for having a public profile when I am sure they’d prefer to under everyone’s radar screens too. The next time around we will be hearing that this low, quiet profile that Citigroup’s CEO now has is what got him into trouble when times get stickier. It seems like it is either too much or too little visibility and nowhere in between when it comes to CEO visibility and presence. Let’s see what the new year brings on this topic of neverending interest when it comes to CEOs. I think the common saying is, “Damned if you do, damned if you don’t”, which according to Wikipedia is described as having “two equally repulsive choices, neither of which results in a positive outcome.” I think that is exactly it — pros and cons and little in between to having any public profile for your company.
I have been thinking lately about how the world of reputation has been changing or not. One of my constant thoughts is about how companies now seem in greater control of their own reputation narratives. Whereas we used to be so dependent on the media to report a company’s coming and goings, companies now seem to be in the driver’s seat of storytelling. This was confirmed to me the other day when I came across it from a different perspective. In an interview with former Wall Street Journal Deputy Editor and Executive Editor Alan Murray and now president of the Pew Research Center (an organization I dearly value), he said: “In the 2012 race for the White House, journalists played a decreasing role in what voters heard about the presidential candidates. Only about a quarter of the statements in the media about the character and record of Barack Obama and Mitt Romney came directly from journalists, while about half come from political partisans. In the 2000 election, half the statements came from journalists and only about one-third from partisans.” Of course, 2000 was before the Internet took off, Facebook appeared and Twitter surfaced.
Yet, the same can be said about companies’ character and record today. I bet that about half of the information we hear about companies’ comings and goings comes from stories we find online, stories our friends and family share with us and search engines that filter information by popularity or some sort of algorithm I cannot explain. And I’d bet that only one-quarter or less of a company’s story or reputation-telling comes from in-depth reporting from the media. This newfound advantage gives companies a greater opportunity than ever before to build or re-build their reputations. And because CEOs can use their websites, video or social media without having to win the media’s seal of approval, leaders have a home court advantage that is unassailable.
In some sense you could say that this is the Golden Age of Corporate Storytelling. However, the question I keep asking myself is how many stories does it take to build a positive reputation and bury the negative? What does it take for a company story to break through the clutter of facts, rumors, innuendos and misinformation online and offline? How do you hold stakeholders’ attention when they are so increasingly distracted? If everything matters today, what one thing should a company do well to build its reputation? Where do we start and where do we end?
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.
Many clients ask what is the potential impact of a crisis. How long will it last? When will the scrutiny die down? How does it compare to other scandals or crises? How much will it impact my reputation? When should we start the recovery process? The New York Times’ insanely smart Nate Silver who writes the FiveThirtyEight blog had an interesting post yesterday on which political scandal — the IRS targeting of conservative groups or the Benghazi attack in Libya — would be longer-lasting and possibly impact the next election cycle. Silver chooses the former (the IRS scandal) and explains so in his article. More importantly for my interests and for those that follow me was Silver’s five questions that he developed on whether a scandal “has legs.” He credits Bill James’ Keltner list for the initial questions. To determine whether reputational injury will be enduring, these questions are a good place for companies, leaders and others to start:
1. Can the potential scandal be described with one sentence, but not easily refuted with one sentence? Using the 140 character Twitter test is one good way to see if the scandal has legs. Can you say it in 140 characters. Or try it with as few as 16 words which if you recall is all it took to sink former President Bush in 2003 when he said in his State of the Union Address, “The British Government has learned that Saddam Hussein recently sought significant quantitites of uranium from Africa.” Silver’s argument that if it cannot be easily refuted in a similarly short string of words, you have a problem on your hands. I might add that it could be even less than one sentence…it could be a video or photo today.
2. Does the scandal cut against a core element of the candidate’s brand? The word candidate could be substituted for company or CEO. In this case, a company that proclaims transparency but is caught doing damage to the environment behind the scenes or engaging in financial manipulation is going to lose its credibility 1-2-3. Think about Enron and their much heralded reputation for innovation at the time. It turns out that their innovativeness was in their financial shenanigans, not in reinventing business processes that led to success. Even though Enron was long recognized by Fortune as one of the most admired and innovative companies in the world, the scandal essentially decimated that impression. In fact, it took its leaders from pinstripes to prison strips.
3. Does the scandal reinforce a core negative perception about the candidate? Or company/CEO in this case. As Silver says, “A scandal can be equally dangerous if, rather than undermining a candidate’s strengths, it reminds voters of what they like least about him.” I think that Congressman Anthony Weiner’s late night racy Twitter sexting reminded people of his unlikeability and brashness. Perceptions that confirm what you already thought of a person or company are hard to shake loose. Another example would be BP’s then CEO, Tony Haywood, who at the time said that he wanted his life back while oil was spilling into the Gulf of Mexico. Unfortunately, the general perception was that BP did not care about the damage being done to the environment by the oil spill and the CEO’s statement only reinforced that negative reputation.
4. Can the scandal be employed readily by the opposition without their looking hypocritical, risking retribution or giving life to a damaging counter-claim? Most competitors in business do not take advantage when their peers are knocked down by scanal. Companies today easily recognize that a scandal for one company affects all and impacts the entire industry. The question for company reputation is “Can this scandal spread to peers and further damage the industry sector that might already be struggling?” Not a perfect example I fear but an example that comes to mind might be the quality issues that emerged years ago in China when lead paint was supposedly found in children’s toys. That perception continues to linger for products manufactured out of China today. I was recently in a children’s store when a customer asked the cashier where a T-shirt was made because she only bought children’s clothing made in the USA.
5. Is the potential scandal occurring amid an otherwise slow news cyle? This is a good question to ask when a potential reputation disaster emerges. There are countless examples of company reputation debacles that get drowned out by other news that draw the media’s attention. I always think about how some recalls get scant coverage when bigger business stories are erupting. Or how some stories are not uncovered until the cycle is very slow and investigative reporting resumes. Silver mentions how the crude measure of a Google search shows that today, American’s appetite for political news stories is at an eight year low. So President Obama and the Democrats might just avert the sting from the IRS scandal because it’s not the tantalizing subject for readers as it might have been eight or nine months ago. Perhaps when the Dow is reaching 15,000, some stories just fade away.
Last week I came across something that stopped me in my tracks. Actually I was going nowhere because I was on the subway but it struck me (and I shuddered) that I had a moment of insight into a news story that had tremendous implications for companies and their abilities to create lasting reputations. The Pulitzers were announced last week and The New York Times won four. What was so startling to me was that two of the highly prestigious and acclaimed Pulitizers (50%) were for indepth, investigative reporting on the overseas behavior of two different companies. One was a series of reports on alleged corruption at one company and another Pulitzer was won on the costs of human capital in a company’s manufacturing products abroad.
Here is why this is so important — leading companies, the best we have to offer, must safeguard their reputations at all times and not let up for one minute because the spotlight on them is only growing brighter. And just because business operates differently in other cultures or regions, if the behavior does not align with the company’s values or is morally correct, it’s reputation-damaging and wrong no matter where on earth it happens. Earning the right to operate is given to companies through governments or regulators but the license to operate is still very much dependent on the perceptions of communities and consuming public around them and online. How a company behaves matters today and consumers buy based on how companies treat their employees, vendors, customers, communities and others everywhere. Our recent research on the company behind the brand shows that in spades.
These Pulitizers are an early warning sign to companies to carefully consider their behavior on all counts if they want their reputations to be shatterless.
I could tell that it must have been the one year anniversary of the Costa Concordia because I started hearing about the shipliner crash in the past few days. Reputations keep rolling along throughout the year but especially hit home one year later. Whereas they might be fleeting memories at first, they all come together on the year one anniversary to make us take notice. Today I started hearing more about the memorial service for survivors and families of those who lost their 32 dear ones in Giglio, Italy and it started to stick more than two days ago. There were 846,000 mentions on Google when I searched for Costa Concordia anniversary today.
For reputation, one year anniversaries are part of the reputation process. It is almost like it fits into the five stages of grief. The one year anniversay is a day of reflection and return to the reputation demise that caused the loss in the first place. All the pictures of the cruise ship on its side off the shores of the little Tuscan city are back in view. Debates over raising the ship and removing it are back in the news. Anniversaries are important because they remind us that reputations should not restored overnight. The bigger the loss (especially when lives are lost), the longer reputation takes to repair. That should be law.
I especially remember the Costa Concordia because we were launching our survey on how corporate and brand reputations have become nearly indivisible. The parent company of the cruise liner pushed media requests over to the Costa Concordia CEO — the brand leader — in an effort to disentangle the corporate reputation from the brand reputation. Due to the ease of information flow and the Internet’s reach, much of the media coverage mentioned the parent company in the coverage which only proved that corporate and brand reputations have definitely converged. Because the entire incident happened just as we launched the survey, it is forever lodged in my mind.
Talking about reputation, tomorrow’s Oprah Winfrey interview with cyclist Lance Armstrong will be another one for the record books. I am not sure how Lance’s confession that he used drugs to help him win the Tour de France several times will go over. My sense is that an apology might not curb his rapid reputation decline and Lance’s reputation might not just keep rolling along but might face a hard stop for awhile. No telling where it will be, however, in three or four years. I will be interested to tune in and watch.
I was recently interviewed in the Tennessean about how a hospital in Nashville, Saint Thomas Hospital, was handling the crisis related to the fungal meningitis outbreak. The question posed to me by the reporter was how this public health disaster caused by a New England compounding company would ultimately impact the hospital’s reputation. Like many people, I have been following the crisis but did not know much about how Saint Thomas Hospital specifically was dealing with the contamination and its aftermath. Of the nearly 17, 500 vials, 2,000 were sent to the St. Thomas Outpatient Neurosurgery Center. The Clinic is on the St. Thomas campus but not wholely affiliated with the hospital. Apparently the high number of people coming to the hospital’s emergency room is where the problems with the compounded steriod drug injected into people for back pain first came to light.
After the reporter contacted me, I immediately went to Google to learn more about how the hopsital was dealing with the crisis and found this interview with the CEO of St. Thomas Hospital, Dawn Rudolph. I was very impressed with the steps she took to lead the hospital through the crisis and it was apparent to me that she had taken her crisis preparation seriously and had good judgement. It is worth reading how she and her communications department prepared talking points for medical staff, worked with the Centers for Disease Control and Prevention and Tennessee Emergency Management Association, coordinated with the clinic to determine who would do what and let people do their jobs while she fiercely observed what was happening. Some of her actions that are worth noting when you want to recover your reputation post-crisis:
1. Stay out of the way of those who have a job to do such as the clinical care teams
2. Surround yourself with good people
3. Anticipate challenges
4. Make yourself available. Clear your calendar.
5. Plan for the short-term. Ask Rudolph’s question, “What am I missing?” and take answers from everyone.
6. Be prepared for misinformation that circulates in the media or online. (The crisis was incorrectly tied to a viral meningitis scare in the area)
7. Give your team talking points for them to explain what is happening to their families.
8. Watch your team carefully. The psychological effects can be tough to swallow.
9. Pointing fingers and trying to explain who is at fault is not going to be well understood when people’s lives are in danger. (The hospital and clinic are different entities but Rudolph did not spend her time making the distinctions for people who were worried about the health of their family members. Very civil and very impressive.)
The best part of the interview was what she said about what she wishes she had done, “I would have immediately grabbed an administrative person and had them pull a chronological list of what had occurred that day relating to the crisis. We did that in spots, but things evolve fast. I would have said, ‘you’re designated to be the record keeper and check in several times a day with team leads,’ because it was so multidimensional.’”
I wanted to mention an example of a new movie about fracking with Matt Damon that is soon to be released, Promised Land. The reason I want to post about it is that I predicted a few years back that this would become a trend in the reputation landscape and it has. I also like to use my blog as an archive on all things reputation. Lately I have found that when I have a presentation or speech coming up, I can find good examples to use to make my case. So this blog comes in handy in many ways.
Promised Land is about a natural gas company salesman, Matt Damon, in rural Pennsylvania and his plan to lease natural gas drilling rights there. The movie, to be released at the end of December, is already raising concerns in the energy industry (according to this article) and they are reportedly distributing research, information about fracking on social media and preparing brochures about fracking to educate the public. It is not clear if the movie takes a stand on fracking but sides seem to be lining up.
All of this is on my mind because of the article I wrote on Reputation Warfare for HBR and how companies can imitate adversaries’ reputational assaults and need not remain defenseless.
I wanted to keep this blog as a bookmark for how reputation strategies are changing over time as companies increasingly take on their opponents. My, how the world of business is changing.
I have had China on my mind lately. Weber Shandwick just announced the launch of a new specialty called Emergent China. It advises China-based multinationals and their CEOs on strategic expansion into global markets, including North America, Latin America, Europe, Africa and the Middle East. So I have been more attentive than usual to how Chinese companies build their reputations outside China.
Ironically, as I was reading my Wall Street Journal this morning, I saw a paid advertisement taken from China Daily with the headline, “COSCO Enjoys Success.” The sub-head was “Chinese shipping titan earns respect and gratitude in U.S.” I read the China Daily article about the robust and successful development of COSCO shipping operations in the U.S.
Then I turned to the Marketplace Section of the WSJ and saw a fairly negative article about Cosco’s poorly timed expansion that was damaging its financial standing and its dominance.
Although my assumption is that Cosco tried to cushion the fallout from its reporting tomorrow on the first half’s earnings, the timing was unfortunate and not a good working reputation-building strategy. Reputation for emerging Chinese companies needs to be managed for the long-run and a better understanding of how the U.S. media works seems to be in order. I can’t help but think that better relations with journalists would have helped Cosco with getting a heads up that this criticism was about to appear. I could be very wrong but the two articles (one paid, one not) just screamed for REPUTATION MANAGEMENT.
I give them the benefit of the doubt because they seem fairly savvy. I had noticed two years ago that Cosco was using its Awards and Recognition effectively on their web site. When I was visiting China to talk about reputation, I used their site to show how Chinese companies were using these rankings wisely. So let’s see what happens as more Chinese companies make waves in the U.S. and communicate their positioning and initiatives.
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.