online reputation management
It has been a crazy few weeks — traveling to Berlin, San Francisco and Istanbul. But I am back in the USA. So here are a few observations about things I’ve read and learned that I wanted to share:
1. Deloitte Touche Tohmatsu just issued a new report on reputation risk. Reputation risk was the top strategic risk among 300 global C-suite executives surveyed. The survey found 40% of respondents listed reputation as their top risk concern today, with their business model second at 32% and economic trends/competition third at 27%. In 2010, reputation risk was at 26% so we can see that it has moved to the very top of the C-suite agenda. Henry Ristuccia, global leader of governance, risk and compliance at Deloitte had this to say (love this quote): “Reputation risk is going to always be the meta of all risks…how you manage the underlying factors that could affect the organization’s reputation or brand…how resilient are the people, the culture?” The meta of all risks!
2. In Istanbul, I spoke about Reputation Warfare, the theme of my Harvard Business Review article. The occasion was the 2nd International Reputation Management Conference at Kadir Has University. It was very impressive because there are not many reputation management conferences in this world (Reputation Institute holds one annually) and here I was in Istanbul. Very forward-looking of the university. The summer protests in Turkey at Gezi Park was an interesting backdrop to my discussion on using social media as an opportunity to defend one’s reputation in addition to the risk. Additionally, there was discussion about how the protests had affected the reputation of the country. Tourism took a hit in July but from the looks of it, it was pretty healthy this week. I am going to keep a watch out for how Turkey repairs its reputation and what types of reputation recovery strategies are employed. All very interesting and doable. I also experienced some of the Turkish hospitality that they are so well-known for.
3. Just this past week, I read two articles on how Goldman Sachs and JPMorgan are repairing their reputations. All in one week. Clearly this is a topic that has grown exponentially and particularly in the financial sector. The Economist article on Goldman Sachs was fascinating because it described the scenario setting that is being used to train vice presidents to better understand their responsibilities to the firm when faced with ambiguous and complex challenges to doing business today. The case study is preceded by a film that is described this way: “…an emotive documentary on the history of Goldman Sachs, filled with interviews of luminaries and former executives, each hammering home the virtues that supposedly make the firm distinctive—teamwork, personal accountability and the legendary exhortation by Gus Levy, a former leader of the firm, to be ‘long-term greedy’, by which he meant it should forgo short-term profits if they came at the expense of client relationships.” I mentioned in a previous post how Goldman Sachs is super-engaging in training which included their CEO from the start. In addition, incentives have been revampedd and tied more to collaboration and teamwork. The WSJ article on JPMorgan’s CEO Jamie Dimon focuses on how he is converying “business as usual” as he faces an imminent federal lawsuit, another revealing reputation recovery strategy. He has been touring midsize cities such as Cleveland, Oklahoma City and St. Louis meeting with local businesses and community leaders that are supported by JPMorgan’s philantrophy. According to the article, Dimon’s message are fine-tuned, upbeat and focused on the customer.
Fake commentary. This weekend I received constant fake commentary to my blog — every minute. I deleted over 1000 or more in the end. I just could not believe that anyone cares enough to assault my blog like that but apparently wordpress has been having these robo-attacks which affects its users. Very annoying.
On the subject of fakery and forging online reviews, this morning I read about the proliferation of fake reviews online. It is estimated that by 2014, nearly 10 to 15% of social media reviews will be fake. The problem with this is obvious to all — reputations are won and lost by such phony reviews. How many times have you turned away from a product because a review was scathing or negative? And how often has that bad review made you think less of the company behind the brand or anything else that company sells? This causes reputation doubt.
Some of our research at Weber Shandwick has found that online reviews were becoming nearly as important as professional reviews. For example,by more than a margin, consumers pay attention to consumer reviews over professional reviews for consumer electronics products (77% to 23%). They read 11 online reviews on average before purchasing products. Online reviews surely affect the bottom line. New York’s Attorney General Eric Schneiderman, who is leading a crackdown on companies in the business of creating false online reviews, gives good reasons as to why this is more than an annoyance: ”Harvard Business School found that increasing a restaurant’s review score by one star on Yelp.com could boost business up to 8 percent. Cornell researchers found an extra star on Travelocity or TripAdvisor could translate into an 11 percent increase in a room rate.” So there you go. Fake reviews destroy reputations and profitabilty.
Many of these firms hire people in other countries who get paid $1 up to $10 to write one negative review. Luckily, our attorney general in New York is trying to get rid of them and is giving out large fines to keep them from continuing this bad behavior. Reputations deserve better than this.
Years ago I met Michael Fertik, CEO of reputation.com. He emailed me as CEO of reputationdefender.com as he was building his business and probably figured I was worth meeting. I was delighted to meet this young Internet entrepreneur because we shared the same passion for reputation management and particularly for the evolving state of online reputation management. Now Michael is a reputation rock star and I enjoy watching how his start up has grown into a full-fledged service for individuals and businesses. Additionally, Michael’s stance on privacy issues and the need for privacy vaults where we store our own personal data is critically important for our futures. He’s worth keeping on your radar.
All of this is by way of saying that I was interviewed for reputation.com and I thought it was worth sharing with you here.
I was recently thinking about this interview because of my comments on the amount of attention being paid to the customer and how I sometimes think that the importance of the customer is being neglected by the focus on all the new bells and whistles and whizbang of the Internet. The channels are indeed exciting but the ultimate aim is to attract a customer and build a unsurpassable customer experience. This was highlighted to me in a recent Forrester study on the rise of the Chief Customer Officer. We actually need these senior officers more than ever to hone in on every company’s center of gravity — the customer. These CCOs need to create end-to-end accountability for customer experiences, design customer experiences that transform how a company operates and delivers value to its customers and shift the culture to a customer-centric one. Reputation loss will be less severe if the customer is at the heart of the organization and at the CEO’s side.
I wonder if you have heard about the new reputation model that Microsoft is using with its Xbox, the video game. It is actually called Reputation and it alerts you to whether you’re planing with a jerk or cheat. This is their way of keeping out the trouble-makers. It uses a community powered algorithm that alerts the player to whom they are playing with. Pretty clever. Here is an interview I found online with Xbox LIVE program manager Michael Dunn:
The new model will take all of the feedback from a player’s online flow, put it in the system with a crazy algorithm we created and validated with an MSR PhD to make sure things are fair for everyone. Ultimately, your reputation score will determine which category you are assigned – “Green = Good Player,” “Yellow = Needs Improvement” or “Red = Avoid Me.” Looking at someone’s gamer card you’ll be able to quickly see their reputation. And, your reputation score is ultimately up to you. The more hours you play online without being a jerk, the better your reputation will be; similar to the more hours you drive without an accident, the better your driving record and insurance rates will be. Most players will have good reputations and be seen as a “Good Player.” The algorithm is looking to identify players that are repeatedly disruptive on Xbox Live. We’ll identify those players with a lower reputation score and in the worse cases they will earn the “Avoid Me” reputation. Before a player ends up with the “Avoid Me” reputation level we will have sent many different alerts to the “Needs Improvement” player reminding them how their social gaming conduct is affecting lots of other gamers.
Just imagine if we could do this with social media in general. As I mentioned in a previous post, we just finished our fourth annual survey on Civility in America and found that incivility online is becoming more of a hazard than years ago. But just imagine if your reputation was called out and you could avoid all those uncivil people who are bent on maligning your reputation or making your day miserable. Now the tables are turned. If only we could take this algorithm to the Internet in general and all those “Avoid Me” people would be scratched out of our online lives.
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.
I spoke on a panel one week ago organized by the Association of Corporate Counsel (ACC) in Connecticut. The topic was “Can They Really Say That About Me?” I was joined by terrific panelists….John Hines of Clark Hill (Online Reputation: Legal Perspective), Polly Wood of Reputation.com (Protecting Your Online Reputation), Dr. Pamela Newman of Aon‘s Newman Team (Insuring Reputation) and Stephen Schultze of the Princeton Center for Information Technology Policy (Policy Perspective on Reputation). We all had a terrific time learning from one another since we all approached reputation from different angles. I approached reputation from a company point of view, John from a legal point of view, Polly from an individual point of view, Pamela from an insurance perspective and Stephen from a policy angle. John Hines organized the event and we are hoping to take the show on the road to Chicago.
Stephen brought up a question that has been lingering in my mind since the session ended. He asked whether society was perpetuating a “reputation gap.” He posed the idea that there is a divide between those that can police their reputation and those that cannot. It costs money, time, resources and know-how to protect your reputation, build positive mentions to push down the negative, open new domains and populate social media to create good first impressions. The “have nots” do not have the same access to information and Internet savvy to protect their reputations, balance the positive with the negative or hire an online reputation management specialist to help better situate their reputations. Just yesterday I wrote on this blog that nearly $1.6 billion was spent in 2012 managing reputations online. With figures like this, Stephen Schultze has to be right asking whether there is a reputation gap. The answer is clearly “yes.” Perhaps some of these online reputation management companies should provide services pro bono for some of the unfortunate who are maligned online and do not know where to turn to for support.
As for me being in the reputation business myself, I do make it my business to help people whose reputations have been tarnished by explaining what they can do and where they might seek help. So I hope that I am doing my bit to narrow the reputation gap.
A quick note for a Saturday. In this article, I read that small and medium sized business spent nearly $1.6 billion in 2012 managing their reputations online. This figure is expected to reach more than $2.9 billion in 2017. I imagine that if you added in large sized businesses, you’d be closer to $4 billion. (Just estimating) in 2012. This confirms that there is an entirely robust online reputation management industry that has just gotten started. And the reasons behind this new cottage industry are strong when you take into consideration that nearly 94% of people do not move beyond the first page of Google or Bing to get what they were looking for. Last I had heard, the number was closer to 89% but it certainly is creeping up. I bet it hits 100% in no time.
As I mentioned, I am traveling in Asia to talk about social CEOs and generally spread the good word about our thought leadership and Weber Shandwick. It is so terribly interesting to present our research and learn what people have to say and listen to the kinds of questions they ask. Today in Shanghai someone asked me what type of emotional commitment a CEO has to make to become a social CEO. What a great question! It definitely takes an emotional commitment. Not only does a CEO have to commit time and resources but there is a genuine personal commitment as that goes hand in hand with being social. You are putting yourself on the line as well as your ego. It also takes courage. In our new upcoming research which we have not released yet, executives are quite aware that being a social CEO takes courage. It is not for the faint-hearted. However, one CEO reminded me that the CEO job is all about risk anyhow. True.
In addition, at a presentation yesterday in Beijing, someone mentioned that even if you cannot get your CEO to be social (meaning using social media in some shape or form), CEOs need to commit to “the intrinsic value of sociability.” He rightly said that sociability (whether online or not) should not be ignored in this business environment. It can make a significant difference. Smart advice.
I had a particularly interesting and rewarding week. It started in Minneapolis where my colleague and I spoke at a YPO/WPO event on managing a reputational/pr crisis and how to use social media to keep one’s reputation from getting tarnished. The audience of over 100 CEOs and presidents wanted advice on managing a crisis in this hyper-connected, turbulent and “gotcha” world. The person who was to introduce us was abit late because he was handling a crisis…which I thought was perfect timing! I hope I made the point that reputation management is a contact sport today.
While preparing for my talk, I was searching for something to say about how socio-political-local issues are more important than ever in managing reputation. I was barely in the state when I quickly learned about the upcoming vote on the Marriage Amendment. Companies are being asked to vote yeah or nay on gay marriage and from what I can tell, it is having a resounding impact on perceptions of business reputations in the state. This event is an extraordinary example of how business reputations are being shaped by their political citizenship. In case you are curious as to how some CEOs are taking a stand, read this entry on the General Mills blog, Taste. Here is an excerpt written by the head of global diversity and inclusion as to his company’s CEO, Ken Powell, who addressed employees:
“As readers of this may or may not know, Minnesota voters will be asked to decide on a proposed constitutional amendment in November. If passed, this amendment would define marriage in our home state’s constitution as being between one man and one woman, effectively banning same-sex marriage in Minnesota. If defeated, Minnesota voters would send a strong message about our state’s view of the importance of inclusiveness and diversity.
Ken spoke only a few minutes – but his words spoke volumes.
He voiced our company’s opposition to the proposed marriage amendment, an initiative that makes our state less inclusive and reduces our company’s ability to attract and retain talent.
While, General Mills doesn’t normally take positions on ballot measures, this is a business issue that impacts our employees.
I am proud to see our company join the ranks of local and national employers speaking out for inclusion. We do not believe the proposed constitutional amendment is in the best interests of our employees or our state economy – and as a Minnesota-based company we oppose it.”
Also pretty impressive is that the company left all the comments from those in favor and those opposed to the marriage amendment on the blog on their corporate site. They are all heart-wrenching and some unbearably uncivil.
I was talking to a few colleagues and came to the conclusion that companies are now mirroring civil society. Many of the issues facing the nation or even the world at large are now the business of business — education, bullying, civil rights, etc. The public square and corporate corridor are becoming increasingly similar.
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.