reputation redemption

  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.

  Reputation building is walking in the front door of The White House.  A recent New Yorker article on the Navy SEAL mission to capture and obliterate Osama Bin Laden is captivating and spell-binding, to say the least.  But now there is some discussion that the The White House okayed the dramatic recounting to make them look audacious, brave and effectively taking care of the nation’s big hurt (9-11).

Then I learned that there is a movie under foot with apparently deep access from The White House. Oscar-winners’ Kathryn Bigelow and Mark Boal of “Hurt Locker” fame are producing the big-time screen version of the killing of Bin Laden.  Due in theaters October 12, 2012.  Isn’t that near election day? Duh.

The White House is taking reputation-building seriously. A good thing. Everything seems pretty shaky right now. No doubt about it, there is going to be an all out assault and reputation redemption campaign for our beleaguered president.

 

“I am not proud of my actions and have made a visit to the Vancouver Police Department, over the weekend to turn myself in.”

The Vancouver riots have highlighted how we are all discoverable and all our actions are forever on display online.  Many people who participated in the riots over the Stanley Cup loss to the Boston Bruins have begun to publicly apologize, particularly after being caught on tape or in photos and posted online. They are painfully trying to recover their reputations for participating in the disturbing looting and bad bahavior that grabbed headlines all over the world. Here is a newscast  from CBC that caught my eye because it was identified under the title Reputation Recovery, the theme of my second book.

The quote at the start of this blog is from a young woman who apologizes for her actions. She continues, “The pants are being returned.  I have made mistakes and I have learned from them.  The aftermath has been a tough ordeal and I let my emotions get in the way of my original apology.  But I take full responsibility for my actions and understand that it is nobody else’s fault but mine.  I am truly sorry for my actions and am ready to accept the consequences, including the public backlash.”

We are all public. Not much more to say.  Hard way to learn one of life’s latest lessons. Hopefully, the rioters will repair their reputations and care for them like never before.

  I have to take a break from work and post something. I think my mind is going to explode. So I thought I would post about something fun and different that has to do with improving your city reputation. And also about reputation retaliation.  Apologies for being a few weeks behind.

Newsweek wrote a story profiling the top 10 dying American cities [I should add that Newsweek says it appeared pursuant to a content-sharing agreement with a site called Main Street, and that the magazine didn't produce it]. Grand Rapids, Michigan was included in the list of slow deaths which certainly does not do anything good for its reputation, attracting new residents or new businesses to the area.  Hasn’t Michigan had enough grief? So instead of taking the criticism lying down, 1,000 residents of Grand Rapids raised about $40,000 and  fought back. And fought back they did.  Check out this video.  It is delicious to see how cities can redeem their reputation.  Nearly 4 million people have watched the music video, referred to as one big block party,  that lip dubs the classic song American Pie. It is a great diversion and a smart strategy. And falls into my advice about going rogue when it comes to reputation warfare.

This made me think about the article I read awhile back about Detroit needing a statue to repair its reputation and efforts to raise funds for a Robocop statue. I loved the idea but I think it was squashed. (See picture at the start of this blog)

 I remember distinctly a few years ago when the first few movies/documentaries came out about the pharmaceutical and tobacco industries.  My first reaction was that there was going to be an entirely new film genre in due time – the business class. I think I was right.  Years ago, it would have been preposterous to think that people would pay to go to the movies to watch a story about some CEO or executive behaving poorly.  What could be more boring!  Now it seems that a whole slew of movies are coming out about bad CEOs and executives or politicians (they seem to be all mixed up together today in people’s minds).  Hard not to agree that this is  where all the drama is these days. Unfortunately, the reputation of big business and their chieftains are at an all time low. Weber Shandwick’s research found out several months ago that only 14% of Americans think positively of CEOs. So now we get to watch the bloodletting on the silver screen. And the reputation of CEOs don’t get even a chance to redeem themselves a little.

This all came to mind while reading an article today in The New York Times about several documentaries now showing at the Toronto International Film Festival and soon to coming to the U.S.   They do not paint a pretty picture of business. The title of the article said it all — “Documentaries Zero In on Wall street, and They Show No Mercy.”  The films are Client 9 about Eliot Spitzer, Inside Job about Wall Street’s role in the financial collapse and Casino Jack about Jack Abramoff, the former business person and lobbyist now finishing up his prison sentence in a half-way house for defrauding Indians. This is not to mention Michael Douglas coming back as Gordeon Gekko in Wall Street directed by Oliver Stone. He too arrives on the scene from prison to advise a young trader.

Ironically, I had a conversation earlier today about how to rebuild trust in the CEO position. After learning more about these movie debuts, it seems that CEO rehabilitation has a long way to go among the general public and filmmakers.

In an interview with the CEO of Google, Eric Schmidt opines on the future of search. He makes an interesting predicition in the wide-ranging interview. Schmidt says: “…apparently seriously, that every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites.”

This notion of name-change raises interesting questions about reputation if we can disown our youthful indiscretions and misguided ways from the past.  If reputation can be altered or amended at the magic age of 18 or 21, how authentic can reputation really be? I wonder if the younger people he is talking about are now more careful about their actions, relationships and words because they know deep down that we are all indexed somewhere. To give younger people a digital eraser as they enter adulthood might just keep them (not all) from properly shaping their moral character and understanding that there are consequences to what they do.

Of course, I would very much like to think that everyone gets one free pass sometime in life and could opt to wipe out one past error or misstep but I think that given the choice, it would be agony to pick just one! Also, there seems to be an entire business devoted to burying those misdeeds so not sure changing one’s name is necessary.

  I often feel that all I hear is bad news about companies losing reputation. When I see or hear the news, it usually is about another dent in a company’s or CEO’s reputation. Of course, that is what news is about — wrongdoing. I understand that companies that are maintaining or lifting their reputations up are not particularly newsy unless something catastrophic had happened to them.

Yesterday I spent in the jury pool in Brooklyn where I live.  As I walked out, I thought to myself how nice it was to participate in a system that had seriously improved its reputation. Years ago, jury duty in Brooklyn (never been to other borough’s courts) was downright depressing. The seating was terrible, the lighting dim and the officers downright rude, grumpy and dismissive. Yesterday was completely different. The seats were comfortable and actually cushioned with distance between each one so that you were not sitting shoulder to shoulder on hard benches with total strangers like on the subway. There were flat screens with the news playing in several areas of the large room where we started our day. I did notice that Fox News was on in the morning but later MSNBC took over.  They balanced even that. There were banks of computers for people to check their emails for free and people were told they could take 10 minute breaks for smoking.  The wireless in the jury room allowed me to work most of the day which was extraordinary too. The court officer announcing how the day was going to go and what our rights were was very funny and made me want to listen to him. People were treated like customers, not potential criminals which is how it used to feel. Most notable, at the end, another very official court officer thanked everyone who was dismissed from jury duty and stood at the door to thank people on the way out.

The customer-friendly welcome was evident in every touchpoint during the day. I was very pleased that if I had to spend a day away from the office after traveling for two weeks, at least I could watch fine reputation-building in action. And, even more to my astonishment, Brooklyn residents are not called back for another eight years. After being called every three years, that’s another reason to live in Brooklyn.

Some reputations rebound. Today’s New York Times describes how Starbucks’ reputation is bouncing back. One of the drivers of that recovery came from its CEO ceding control to employees. In Seattle, employees held brainstorms that surfaced ideas to turn the ailing company around once CEO Howard Schultz told them to just do it! — break the rules and figure it out for yourselves. You have permission. Schultz gave the okay but employees took it on. As the article says, founder Schultz was determined to give its coffee chain “ a dose of the urgency, nimbleness and risk-taking of a start-up company.” Employees took on the risk of failing and the hunger to win. Not easy to do in a tough economic environment like this. What happened? A new Starbucks-owned coffeehouse arose that doesn’t resemble the typical mass produced furniture Starbucks look. Instead it heralds back to the coffeehouses of yore with its own local flavor and style.  I like the big communal table with sockets in the center. The coffeehouse described in the article is 15th Avenue Coffee and Tea and sells microbrew beers, espressos, cheese and baguettes.  A turnaround takes more than baguettes but is clearly in the works.

Good to hear that Schultz is listening to employees and customers who are helping to oil the turnaround gears. As we know, turnarounds take some time so we’ll be hearing more as time goes by.

 Today at Weber Shandwick we just issued a new reputation offering that I particularly like. As safeguarding company and brand reputation continues to rise to the top of executive agendas, 99 Tips to Safekeeping Reputation provides a simple visual roadmap to navigating crises and restoring reputations. We think it will come in handy for anyone interested in reputation. Enjoy and let me know what you think or would like to see added in our next version. I am thinking of doing this annually.

Wanted to make sure to let everyone know who reads my blog that I am moderating a series of seminars on reputation protection in the Internet Age. There are three planned with Akin Gump Strauss Hauer & Feld, K2Global and Schillings are taking place in New York (September 23), Washington DC (September 24) and London (September 29). These law firms and risk consulting firms including us at Weber Shandwick will add an interesting perspective on reputation defamation and restoration today in the changing world of reputations online. Please check it out. Registration is free and I would love to see you.