Reputation Warfare

P&G is announcing its new corporate campaign that is a "global serenade to mothers." It is covered in an article today. The reason this is big news to me (and I am not an Olympian's mother) is that it is part of the P&G initiative to focus on the corporate brand behind the products they sell. Our research on The Company behind the Brand: In Reputation We Trust is all about the increasing interdependence between corporate and product brand reputation. As the global CMO says, "P&G is in the business of helping moms." Or he could have said that P&G is in the business of building its corporate brand reputation. The new campaign is focused on the moms of athletes, particularly Olympians. Right on. As we learned in our recent survey, 87% of executives report that the corporate brand is as important as the product brand. And consumers also agree -- 70% of consumers in markets around the world say that they avoid buying products if they do not like the company behind the brand. We are releasing some more information shortly from the study on the link between CEO and reputation as well as the impact of leadership communications so check here soon.

In a piece I wrote for The HuffingtonPost for 2012, I forecasted that reputation blackmail would show its hand this year. Lo and behold, a front page article in yesterday's paper headlined "Hackers-For-Hire Are Easy to Find."  The article had to do with two feuding brothers from Kuwaiti who were suing one another over business they held. One of the billionaire brothers found someone to hack into his brother's account and post online all his brother's personal emails including finances, legal affairs, pharmacy bills and everything else that you can imagine gets sent and received from one's personal account. The cost: $400. Hackers to hire are that cheap and apparently easy to find. One of the reasons there has not been much on this topic where reputations can be easily lost is that people do not want to report this type of reputation blackmail and generate even more attention. In this instance, the one brother hired Invisible Hacking Group located in China and here is how it works:

"It requested the target person's email address, the names of friends or colleagues, and examples of topics that interest them. The hackers would then send an email to the target that sounded as if it came from an acquaintance, but which actually installed malicious software on the target's computer. The software would let the hackers capture the target's email password."

You get the picture. Reputation blackmail presents a very scary scenario. Not only is privacy damaged but reputations which take a long time to rebuild get decimated.  Reputation protection can only go so far. Risk management and reputation warfare gets more complicated by the day.

Whatever the merits on both sides, I wanted to point out here that what I thought was happening in the reputation warfare field is actually coming to pass.  Increasingly more companies are fighting back when they believe their reputations are at stake. Perhaps companies recognize that public opinion might be on their side as the general public loses trust in institutions. But without a doubt, companies are not necessarily turning the other cheek when they think their reputations have been unfairly damaged. In this blog, I have mentioned the increasing frequency of company documentaries that serve to tell their side of the story. Today's article about Del Monte's public spat with food regulators over restrictions on its cantalope imports underscores the trend.  To quote from the article,

"The company, which is one of the country’s largest produce marketers, says the restrictions could damage its reputation, and it has sued the Food and Drug Administration to lift them." "But advocates of safe food said that it was extremely rare for a major food company to take such a publicly aggressive stance, and that they suspected Del Monte Fresh Produce was trying to bully regulators into thinking twice before pursuing recalls in the future."

Expect to see more of this in the future.

  As you know from reading my blog, one of my great interests is online reputation management, particularly in times of crisis. At Weber Shandwick, we have conducted research starting way back on this topic….from Safeguarding Reputation to Risky Business: Reputations Online to Reputation Warfare and more to come. This past week I learned of some new research from Altimeter Group, authored by Jeremiah Owyang. They surveyed 144 social business program managers as well as conducting interviews with 63 corporate practitioners and providers. This included our very own David Krejci in our Digital Communications group about our social media crisis simulator Firebell.  I liked David’s quote (“experience the paralysis”) which is what Firebell does – it gives you the heart attack moment when social media has your company in its sights.  Since digital defense has been an important element of what we do, we were delighted to share information on this resource.  Some of the facts (read the full report here) worth noting are as follows:

• Be prepared. More than three-quarters of  social media crises could have been diminished or averted if companies had invested their resources internally and strategically. Of the advanced companies identified by Altimeter, 13 of the 18 have a clearly defined crisis plan with clear roles, responsibilities and action steps.  But they found that 56% of all companies had no clearly defined plan (that’s when the paralysis sets in).
• Companies need social media policies. These policies guide employees on how to participate in the social universe.  Left unguided, employees are uncertain or oblivious how to participate online and probably do so and go off the guard rails. Reputational risk is heightened, not lessened, when no social media policy is in place. In their survey, 83% of all companies they surveyed had a formal policy in place but among the more advanced ones, all 18 or 100% did. Interestingly, 8% had a policy specifically prohibiting employees from engaging on behalf of their companies. While I have traveled around the world, I have seen this to be true but it does not seem to deter most people and in fact, most definitely increases anonymity online. 
• Ongoing education is critical to managing online crises well. I found this section of the report very helpful because there is so much more that companies can do.  An example was given of a company that has a certification program with over 60 online courses.  Companies could certainly do better at social media training, whether it be brown bag lunches, speaker series, internal newsletters, etc.
• Create a scalable hub and spoke system to lead the social media strategy. The more advanced companies have a center of excellence at the hub with oversight for strategy, governance, training and education, measurement and vendor identification.  The centralized hub works closely with the cross-functional and cross-business unit support teams (the spokes) to support the overarching strategy and common policies. The hub is usually operated through marketing and/or corporate communications. This corporate social media team typically consists of 11 people. 

There is a lot of good common sense and best practice advice in this report. Take a look. We have a lot of work ahead of us to make our companies digitally safe.

  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)

 

The incidents were the latest examples of what security experts call “reputational attacks” on media companies that publish material that the hackers disagree with. Such companies are particularly vulnerable to such attacks because many of them depend on online advertising and subscription revenue from Web sites that can be upended by the clicks of a hacker’s keyboard — and because unlike other targets, like government entities and defense contractors, they are less likely to have state-of-the-art security to thwart attacks.

As I was reading this article this morning on how several media companies were dealing with recent hackings, I noticed a call out box saying "So-called reputational attacks follow controversial reports."  The hackings over the past few days of news programs on public television came about because of negative stories that were clearly disliked  by certain parties. I would underscore that most entities -- government, military, corporate or otherwise -- are having a very difficult time with hackers, privacy, leaked information, etc.  I was somewhat surprised when I saw "reputational attacks" in quotes as if this was a new label of sorts. Reputational attacks online have become commonplace and not just assaults on media companies. Either way, the most interesting element in the discussion on these "so-called reputational attacks" is the common refrain that they are usually the work of repressive governments. And these attacks are much more than reputation vandalism or Web site defacing. In fact, this is reputation warfare. No doubt about it. The reputational risks that companies and organizations are increasingly facing continues to amaze me.

Good to be home from traveling around Asia Pacific the past couple of weeks talking about Reputation Warfare.  So am now back on the blog posting trail. Two things struck me this week although I will make sure to write more about some of my observations about reputation in Asia in the weeks to come. Just to start out, while I was away, Barron's World's Best CEO list came out.  This highly coveted and selective list usually has a theme in addition to its traditional focus on longterm financial performance.  As they say, they like to  identify corporate leaders who make a difference to their companies and deliver for investors. Barron's require that a CEO has been at the job for at least three years and prefers companies with market values of at least $5 billion. This year their advice to leaders is "Go Thee to Asia."

"Any big company looking for serious growth in the 21st century must have a plan for Asia. The region is home to half the globe's population and, increasingly, it's driving the world's economy. So, as Barron's drew up its annual list of the world's 30 best chief executives, we took a hard look at how each candidate was approaching Asia and other developing markets."

On another note, this morning while waking up super early from jet lag crazies, I read about the Warren Buffet-Berkshire Hathaway reputation bruise.  In a New York Times article, it says: 

 "In a July 2010 letter, Mr. Buffett instructed his managers to “zealously guard Berkshire’s reputation.”

“We can afford to lose money — even a lot of money,” Mr. Buffett said. “But we can’t afford to lose reputation — even a shred of reputation.”

These Buffett quotes don't surprise me and neither does the removal of Mr. Sokol. When I turn to my favorite quote of all time from the sage/oracle from Omaha, it appears he acted swiftly and deliberately. In case you have never heard me say it, it is quite appropriate today. 

"If you lose dollars for the firm by bad decisions, I will be understanding.  If you lose reputation for the firm, I will be ruthless."

I am traveling in Asia so have not had alot of time to write in my blog.  I just read this interesting perspective on what eBay said their real accomplishment was: "...neither their clever technology nor the marketplace they created. Rather, it was to build trust between people who had never met." That's reputation building at its core -- building reputation between people who've never bought or come close to the company's products. I have been traveling to different markets to discuss my article on Reputation Warfare. In one meeting, a corporate communciations officer told me that after a recent crisis, the previously shy CEO said he now realized he was the company's PR chief. And to keep it coming. It often takes a crisis to turn chief executives into media hounds.

I have not written about this interesting development in corporate crisis history but I am glad that I didn't because I have been thinking about it for quite awhile and am thinking about it differently today. Last November, I read in The New York Times that BP is working on a feature length film that would cover the Gulf of Mexico oil spill. I did not know what to think of this at first. I was particularly interested because it fit well into the strategies I recommend in my article in Harvard Business Review on Reputation Warfare.  It fit right into my suggestion of "going rogue" and adopting unconventional ways of defending and resetting one's reputation. As a BP spokesperson is quoted in the article:

“They are making a film of the spill primarily for an internal audience as an archive of a momentous event in the company’s history (not to mention those impacted by the tragedy and its aftermath),” Robert Wine, a spokesman for BP, said in an e-mail.

I tried to learn more about this film because I was so curious about how BP intends to use the documentary. At first, I thought it might just be a one-sided affair which is what the scant coverage online has said. However, over these past few months as I have been thinking about it more and more, I see it as an opportunity if it conforms with what I think. As the spokesperson said, the film is intended as an internal filmfor internal audiences. If the film is used to document history and provide a lessons learned framework, this could be a vital way of not letting history repeat itself. Although there is plenty of information online about the oil spill disaster, a film that starts at the beginning and takes employees and management through all the rights and wrongs -- a visual and dramatic rendering of  its roots causes and decision-making -- it could be good. In my book on reputation recovery, one of the stages of recovery is "Rewind."  The opening story in the chapter is about the Columbia spacecraft explosion and how NASA seriously investigated the organizational causes of the accident because of the breakdown in leadership. The lessons learned from the shuttle tragedy were clear -- organizations must carefully learn from the past because the cost of failing to do so far exceeds the cost of doing so.  This way of thinking might just apply to the reasons behind the BP film and could set an example for other companies facing internal communications challenges when recovering their reputations.   The quote that sticks in my mind from thinking about the opportunity that this film provides to the future of BP is what one CEO wisely said when he led his company through a massive reputation recovery: "We had to settle with the past to prepare the future."

As the new year approaches, I decided to assemble my thoughts on what's ahead in the world of reputation for 2011. I posted eight trends on HuffingtonPost that I see emerging and taking hold over the next 12 months. You will have to check out the post to see what I said about each (my way of saying please check it out). Here they are. 1. Hijacked Reputations 2. Reputation Recoverers Anonymous 3. Reputation Warfare 4. Online Reputation Revisionism 5. Ascendancy of Social CEOs 6. Reputation Blacklisting 7. Reputation Risk Insurance 8. The Corporate Brand Rises The original title of the post is Ask the Magic-8 Ball: Reputation Trends for 2011.  HuffingtonPost shortened it to make it more clear (they are right). However, the Magic 8-Ball is a toy that I used to play with when I was little and which is still around. Here is what Wikipedia says about the toy:

The Magic 8 Ball is  a toy used for fortune-telling or seeking advice, manufactured by Mattel. The Magic 8 Ball is a hollow plastic sphere resembling an oversized, black and white 8 ball.  Inside is a cylindrical reservoir containing a white, plastic, icosahedral  floating in alcohol with dissolved dark blue dye. The die is hollow, with openings in each face, allowing the die to fill with fluid, giving the plastic die minimal buoyancy. Each of the 20 faces of the die has an affirmative, negative, or non-committal statement printed on it in raised letters. There is a transparent window on the bottom of the Magic 8 Ball through which these messages can be read.

Ask The Magic 8-Ball is the perfect ending to a difficult year threatened by a poor economy and many unsettled issues that still afflict populations around the world. The question for the Magic 8-Ball is "Will 2011 Be Better than 2010?"  Pick one of  the 20 standard answers below that appear on the Magic 8-Ball for what's ahead. I picked the fifth one -- Outlook GOOD. Happy New Year!

? As I see it, yes

? It is certain

? It is decidedly so

? Most likely

? Outlook good

? Signs point to yes

? Without a doubt

? Yes

? Yes – definitely

? You may rely on it

? Reply hazy, try again

? Ask again later

? Better not tell you now

? Cannot predict now

? Concentrate and ask again

? Don't count on it

? My reply is no

? My sources say no

? Outlook not so good

? Very doubtful