reputation recovery

There is an unusual campaign afoot to adjust the reputation of Japan. It is called The Cool Japan Promotion Strategy Programme and is housed at the Ministry of Economy, Trade and Industry – METI.  The campaign is to make Japan’s reputation more creative by highlighting its fashion, music, food and animation. The concept has accelerated due to the horrific earthquake’s aftermath and the need to rebuild reputation quickly in as many ways as possible.  The basic concept is to export the cultural creativity of Japan similar to what is done with cars. Such an occurrence happened in Singapore in October where a pop up store devoted to Harajuku Street Style – Japan’s edgy fashion district--appeared featuring small lines of Japanese fashion.  Harajuki is the train station in Tokyo where many fashion stores, boutiques and used clothing outlets can be found for young people who hang out dressed as anime or manga characters.  These fashion-ables break all the rules, mix and match, and have an anything goes mindset.  Must be working since I found a line of clothes at Target when I searched. The Japanese reputation for fashion and culture is expanding as wished.

Reed Hastings, CEO of Netflix, in response to recovering their reputation after several recent missteps:

"The focus is on bringing back our reputation and brand strength, but it won't happen through grand gestures."

 

  The trading scandal at UBS brings to mind the long journey that companies undertake to recover and restore reputations. UBS is now back at square one as they deal with the recently revealed $2.3 billion rogue trading. This reputation disaster brought me back to the days of the Societe Generale SA rogue-trading incident three years ago. If you recall, Jerome Kerviel managed to lose $7.2 billion on his derivatives scheme. The reputation drag on SocGen's reputation today and on UBS tomorrow is quite real. The SocGen scandal has not entirely faded in the past three years. In fact, everytime one reads about what happened last week at UBS, the SocGen scandal gets replayed. This is unfortunate for those who go down the path of reputation recovery like SocGen. SocGen's recovery program was quite extensive when you look at it from a three year vantage point -- they dismissed Kerviel's bosses, demanded that the bank move slower as new security systems were put into place and launched an internal controls program called "Fighting Back."  In addition, other measures were set forth such as spending on new IT security, starting a newly independent accounting group, beginning a SAFE (Security and Anti-Fraud Expertise) program to oversee financial operations and training 7,800 employees about fraud. Ultimately the CEO and chairman stepped down one year later.  All these remedies for recovering reputation came from an article in yesterday's WSJ and I was glad to be able to list these steps for other companies contemplating what to do when faced with sky rocket type scandals. Yesterday morning started off with an email to me from Netflix's CEO Reed Hastings. I immediately went to the Netflix's CEO apology on the blog.   What confused me however was the tone of the video. Although I am a loyal customer and fierce advocate of what Netflix has done for delivering movies to my home, I thought that the video apology was abit too cheery (outdoors in sunny California. albeit a parking lot) and efficient.  Maybe too rehearsed is the right word. I did not get the sense that this was a very repentent CEO who had seen his stock value decline 52% since the change in pricing occurred. But what really threw me was that he did not share the stage alone. In the video, CEO Reed Hastings had the new head of the DVD spinoff, Qwikster, Andy Rendich, joining him.  I always say that CEOs get all the credit when things go right but all the blame when things go wrong. Why did Hastings deflect some of that blame on this poor soul. I cannot remember the last time (if ever) I witnessed a CEO apology tied to the announcement of a new spinoff. I sincerely doubt that was a good launch plan for Qwikster. My sense is that there's more apologizing to come. This poor guy Andy looked like he too was somehow responsible for the communciations debacle. Despite these ramblings, the article on the Netflix problem in today's New York Times made me smile. The authors wrote, "But in the short term, the risk to corporate reputations is palpable."  It is not often that I even see the words "corporate reputation" in a top tier publication. Usually it is referred to as brand health or brand reputation or positioning.  It is fairly rare to see corporate reputation used as a commonly understood concept.  My two cents is that short term feels like long term these days when you are in the spotlight. As someone said to me, it's like a nuclear assault whether it is 6 days, 6 weeks or 6 months. Ultimately, Netflix will be forgiven but like the SocGen example above, reputation damage takes its toll and lingers longer than most CEOs care to imagine.

Last night I could not help but wonder how the huge decline in the Dow of 500+ points was a reflection on the perceived reputation of the U.S. government as well as the country itself. I was not at all surprised to see a poll today that expressed basically the same thing. Here is what I knew to be true as I turned in last night: almost three-quarters of the American public believe that the congressional debate over the debt ceiling agreement has harmed the worldwide image of the United States . And a whopping 82% say that the debate was all about political advantage, not what is best for the country. The reputation of the US has been severely bruised in the eyes of its own citizens and certainly around the world. We have plenty of reputation repair to do if distrust of government becomes the new normal. Whereas most companies and their leaders recognize that reputation is essential to their success today, our dueling political parties have yet to truly acknowledge how all the rancor and incivility is a vote from the daily majority about their behavior and decision-making. For more on civility in America, please click here for Weber Shandwick's recent poll. As I looked into people's somber faces last night as I subwayed home, I could not stop thinking about how the American public had given the reputation of the US a solid "thumbs down" on confidence in this country's future. You don't even need a poll to tell you what we already learned from the Dow. Reputation rules whether it's related to a company, a brand, an individual, an organization or a country. We cannot afford more reputation erosion on our country's reputation. In addition to a bipartisan committee on how to reduce the debt, I think that we should be calling for a task force on restoring our reputation for the long-term.  As more people tune out of government, as we learned in our survey, the harder it will be to build back America's reputation for getting things done.

  A few comments on things that caught my eye while I took some time off this past week. 1. Today's New York Times has an opinion piece by well-known pollster Stanley Greenberg on the state of affairs in Washington DC. As he is describing the problem with Democrats, he says, "They can recite their good plans as a mantra and raise their voices as if they had not been heard, but voters will not listen to them if government is disreputable."  The same goes for corporate reputation. If a company is considered disreputable by consumers, its voters so to speak, no one will listen to them, recommend them or buy their products. Disreputable can be a killer app. 2. Discouraging to see that the world's top 10 best-selling business books, as noted on Amazon over the past three months, are all authored by men with the exception of Suze Orman. Makes me worry more about the reputation of female business book authors and worry less about the reputation of male business book authors. As an author of two business books on reputation, I found this factoid disturbing although not surprising.  When I looked at the best sellers on business and investing for the past month in the US alone, New York Times' business writer Gretchen Morgenson's book Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon was among the top 10 with the other 9 authors not surprisingly being men. So maybe it's the 10% rule for female business writers. I guess we'll take what we can get. 3. Data deluge. An article on data overload made me wince since I think about it a lot, especially all the information I try to process every day (even on vacation) with regard to "reputation."  I keep asking myself how a company can build its reputation when there is so much data and everyone feels overwhelmed by all the additional work they've taken on as the recession slowly creeps along? What can a company do to set itself apart and convey to stakeholders that there is something new to be heard? How long does it take for reputations to turn over, to go from bad to good, good to great and great to the best? These are questions that I am keeping on my list of topics to explore. If you have an inkling, let me know. I do know one or two things -- what you say about your corporate reputation must be simple, memorable, transmissable and distinctive. And I guess I could add relevant. And maybe "social." 4. If you have not read The Checklist Manifesto written by Atul Gawande, it is worth reading. (I realize he is a male business book author!) I am now a bigger believer in Checklists than I was before. One of the best take-aways was the importance of  preventing communications failures when dealing with complexity. In fact, it is so important that it has to be added to the critical steps of a checklist. In recent months, I have learned more about how hospitals operate and the importance of introducing oneself. At first, I thought this "Hello, I am ___") was a curious thing because in business, we hand over business cards and explain what we do all the time. But in extremely complex, life-altering situations such as flying a plane, operating on a patient or building a building that stays up,  it makes a tremendous difference to establish communications by introducing oneself by name and title and acknowledging the other members of the team. As Gawande says, it is important to "ensure stupid stuff isn't missed (antibiotics, allergies, the wrong patient) and a few communications checks to ensure people work as a team to recognize the many other potential traps and subtleties." Since so much of business today is built on specialties and not just general know-how, business reputations can come down to something as simple as communications and introductions and getting everyone on the same page. Definitely worth my time.

CEO Richard Branson of Virgin Atlantic on Reputation Recovery below. Definitely a reputation quote to keep. Branson was asked here about reputation in response to the phone-hacking scandal:

"Your reputation is all you have in life – your personal reputation and the reputation of your brand. And if you do anything that damages that reputation, you can destroy your company," Richard Branson said. "...and it's going to be very difficult for that brand to ever recover."

"Misbehaving in front of others can ruin your reputation even if you are a fish, according to an international study that has shown for the first time an audience can influence levels of cooperation in non-human animals. Scientists from The University of Queensland (UQ), University of Cambridge, and the University of Neuchatel have found that cleaner fish that remove parasites from larger ‘client' fish – providing a type of cleaning service – are less likely to bite their client if they have an audience of other fish (eavesdropping bystanders). These cleaner fish sometimes get greedy and bite clients rather than sticking to parasites. This bad behaviour brings mealtimes to an abrupt end as the disgruntled larger fish swims off. The study, which was published in Current Biology today, showed that other large reef fish that observe this behavior avoid the cleaner fish that have a reputation for biting. Study co-author, UQ's Dr Lexa Grutter, said the group's research has demonstrated for the first time that having an audience can influence levels of cooperation in a non-human animal. “Having an audience makes cleaner fish work to improve their reputation by behaving more cooperatively,” Dr Grutter said. “The fish in the audience – what we call ‘eavesdropping bystanders' - used image scoring to decide which cleaner fish to avoid.” Future research will investigate whether cleaner fish care about their reputation more if the bystanders are more valuable clients. The paper ‘Cleaner wrasses Labroides dimidiatus are more cooperative in the presence of an audience' is available online. The bluestreak cleaner wrasse (Labroides dimidiatus) is one of several species of cleaner wrasse found on coral reefs in much of the Pacific Ocean and the Indian Ocean, as well as many seas, including the Red Sea and those around Southeast Asia. Like other cleaner wrasses, it eats parasites and dead tissue off the surface of larger fish in a mutualistic relationship that provides food and protection from predation for the wrasse, and considerable health benefits for the other fish."

  It seems that Checklists are all the rage. Everyone seems to mention the Checklist Manifesto by Atul Gawande which I now have on my vacation reading list.  Along these lines, Michael Useem, Wharton management professor, has written The Leader's Checklist which is out now. I think I will have to read that too because it is a subject that I follow regularly and I've always liked his work.  Useem provides the 15 mission critical principles that help leaders navigate the stormy waters of crisis and personal success. In an interview with Useem, he talks about the need for a checklist to avoid "unforced errors." I was not sure what that meant so I looked it up and quickly found that "unforced error" is a sports term (which is why I had not heard it).

Forced Error- A forced error is when your opponent hits a really good shot (powerful groundstroke, angled volley, drop shot, lob, etc), that you have to run, stretch, dive or scramble to get. Once you get there you are unable to put it back into the court or you hit the net. Technically, you made a mistake but since the your opponents hit a superior shot, they "forced" that error. Basically, if you hit a shot on the run and it doesn't go in, it's a forced error. Unforced Error- An unforced error is a mistake that you make due to simply hitting the ball incorrectly (shanks, mishits) or using improper positioning, lack of precision or just bad luck (such as hitting the let cord and having it drop back on your side). In other words, if you are playing a neutral rally and your shot goes out of bounds or hits the net, that is an unforced error.

The point is that Useem is telling leaders to keep a checklist so that they don't make a mistake such as forgetting to remind employees about following ethical guidelines or how to treat a customer everytime they walk into a room.  When it comes to a Reputation Checklist, we actually have one -- 99 Tips to Safekeeping Reputation. Although there are 99 of them, they are all worth reading and takes about four minutes. Take a read. I keep mine on my bulletin board behind my desktop at work as a reminder that reputation needs to be managed daily, if not hourly.

    Twitterologies. Is there such a word? I doubt it.  The CEO of Vodacom, Pieter Uys, apologized for outages via Twitter (@uyspj). Despite the inconvenience to Vodacom subscribers, the CEO is getting good marks for his simple apology. While it was happening, Uys was tweeting to customers about what he could do for them and kept in continuous contact. He tweeted the following:

"I do care for every one of our customers. What happened today was not acceptable. I'll work hard to make you smile again." "Words can't express how sorry I am about today's problem. Flat out working at making sure all is 100%. Pieter." "At the network switch with the engineers. All looks OK now. If you still have a problem, please switch phone off and on."

Fairly simple way to tell your customers you care. And that you are there. Helps to keep your company reputation intact.

 Lately I have been wondering if there is such a thing as reputation forgiveness. As I read the news over the past few weeks regarding Warren Buffett's misstep with David Sokol and I think about the one year anniversary of the horrific oil spill in the Gulf of Mexico, I got to thinking that just as reputation recovery takes several years to happen, reputation forgiveness might be something to consider. Should Buffett's lifetime of good reputation outweigh his recent bruising? Is there a Pass Go and Collect $200 card that business and political leaders should be able to play. Of course, mere mortals like myself don't get those types of passes.  There are some acts of reputation forgiveness, all to different degrees and all depending on the "crime."  Former President Bill Clinton has indoubtedly received some measure of reputation forgiveness since the Monica Lewinsky debacle. Elliot Spitzer is now an anchor on CNN.  Michael Milliken and Martha Stewart have received doses of forgiveness (both having spent in jail which perhaps fast tracks forgiveness, not sure). The list is too long to even consider. Something worth thinking about.