Research

We have been very busy this month. We also released a survey on where the most powerful women in business spoke in 2011. Using the Fortune Most Powerful Women in business list that includes U.S. and non-U.S. professional executives, we audited where they spoke to determine how much they were in demand and what podiums they were invited to.  There were several interesting findings that are worth noting since one way to build professional reputation, get company messages across to important audiences as well as build corporate reputation is to leave those four walls of the C-suite.  In fact, I was speaking to someone at Forbes the other day who confirmed to me that the executive conference business was booming. As it were, women are in great demand.

• These most powerful women spoke at 218 unique events in 2011.
• The leading speaking forums in 2011 for these top women executives included Fortune’s Most Powerful Women Summit, The World Economic Forum/Davos, India-US CEO Forum, Women Corporate Director’s Global Institute, the Paley Center for Media International Council Summit and the APEC Women and the Economy Summit.
• We also provided insights on what types of conference events they spoke at – from industry-specific events (e.g., World Food Prize Conference and FICCI-IBI Conference on Global Banking) and conferences geared toward job function (e.g., Techonomy and ANA Conference), followed by women’s leadership and academic forums.
• Our research also found that the digital category (e.g., Digital Life Design and South by Southwest) is starting to emerge and is crossing women business leaders’ radar screens.

We do this type of analysis every year and sometimes we analyze all CEOs and top level executives –men and women. However, we thought that looking at where executive women spoke was past due. So here we are.

What do CEOs think about the importance of the corporate vs. product brand? Luckily we were able to discern the answer when we looked at this group in our recent survey on The Company Behind the Brand: In Reputation We Trust.  96% of CEOs said that the corporate or parent brand is as important as the product brand. That is nearly 100% agreement.  Basically, they have little doubt of the corporate brands’ importance in this new age. Why would that be? Executives –across all four markets in our study– agreed that the primary impetus for the rising equality between corporate  brand and product brand is the reputation halo that the parent company brings to its products. Some might call it the reputation premium. Notably, the CEOs in our study cite the bottom-line as their number one reason for equalizing corporate and product brand. They essentially say that there is greater efficiency in marketing and communicating one overall corporate brand rather than several different brands. The concept of an “enterprise” brand that communicates the company’s reputation and product brands’ reputation all at once gets underscored in our new study.

I have thought about the company behind the brand for at least a decade (maybe more?). Years ago, I was involved in a pilot test where we placed corporate and product ads for several companies from different sectors in a business publication to try to determine the right balance of corporate to product messages to generate awareness and interest to buy. Should a company run one corporate advertisement and 1, 2, 3, 6, or 10 product ads to gain notice? Should they alternate the order — three product ads, one corporate ad, three product ads in that order? Do they even need corporate ads? Over how many months would it take to generate the most interest for the company and the products being sold? This was in the days when companies were wondering if they should communicate what they stood for, who they were and if it really mattered. Obviously pre-Internet days. It was a huge research undertaking that involved printing presses and hand-inserted advertisements. I learned alot about rubber glue and washing sticky hands. But my interest in the company behind the brand has always remained with me and kept me wondering how important it was to consumers (and executives). Do they really care? Does anyone notice the face of a company and its character, its values, its narrative? What do people do if they don’t like the parent company but still want the product? 

Luckily, we now have research on how important the corporate brand or parent company really is and why it matters to consumers and executives alike. We released the research today, The Company Behind the Brand: In Reputation We Trust, conducted with KRC Research. Some of the key findings are:

• 70 percent avoid buying a product if they don’t like the company behind the product (consumers)
• 67 percent are increasingly checking product labels to see what company is behind the product (consumers)
• 61 percent get annoyed when they can’t tell what company is behind a product (consumers)
• 56 percent do research to learn about the companies that make what they buy (consumers)
• 56 percent hesitate to buy products if they can’t tell who makes them (consumers)
• Executives estimate that, on average, 60 percent of their firms’ market value is attributable to its reputation. 
• 86 percent of executives report that their companies increased their efforts to build reputation over the past few years

More to come. And it’s been a busy day getting the research out so will return shortly.

Have been reading about corporate brands and went back to my stash of articles. The IBM CMO C-Suite studies has solid information in their report, “From Stretched to Strengthened” which was conducted among the nearly 2,000 CMOs worldwide.  Not the main focus of the research but they do report that it is no longer enough for a company to just markets its products and services. In fact, the report talks about how the character of the company is now on full display as “social media has exposed the bones beneath the skin.”  Only 53% of CMOs report that their corporate character is understood in the marketplace and 57% say they have significant work ahead to get employees on board.

Here is the  part that I liked best because it speaks to corporate reputation today. “For many decades, the CMO’s job was to market an organization’s products and services. Today, it begins with the marketing of the organization itself.”  A fairly sizeable 61% said that one of the initiatives they have set for themselves ahead is to orchestrate a single view of the brand, something we call enterprise branding.

When people ask me what reputation means, I always say it is all about a company’s character. Glad CMOs agree.

A few interesting things crossed my mind and desk this week that I thought I would share. All reputation-related of course.

1. The World Economic Forum released its report on the top risks facing the world in 2012. Social unrest and income inequity were at the top. Natural disasters such as the earthquake in Japan were also high on the risk list. And as pointed out, one risk affects another creating a domino effect. “The Internet, meanwhile, can magnify and spread the effects of a disaster in other ways. Rumors, even if incorrect, spread quickly on social networking sites — sometimes more rapidly than emergency services can communicate accurate information. As word of disasters like the terror attacks of Sept. 11 or the earthquake in Japan spreads globally, consumers hunker down in front of their computer screens or televisions, rather than going about their daily lives. This increases the economic effects of a crisis, even in areas far removed from the source.”  Disasters such as the horrific earthquake, tragic 9-11, death-defying financial crisis, massive oil spills and nasty ash clouds coming from Iceland all heighten other risks in some way. And risk spells reputation damage depending on how a company or country responds and solves the problem.

2. The report from WEF also mentioned that risks are on the horizon as leadership transitions are in full force this year. It is not just the U.S. presidential election that poses risk and stirs up emotional angst. There are leadership transitions underway this year in France, Russia and China as well. Add to that the sudden transitions in the Arab world this past year and we see upheaval and uncertainty. When CEO transitions are underway, the first few months can be risky so as we see world leaders change, tighten your seatbelts. The public will be more socially active than ever. We’ve already seen that in Russia.

3. I’ve written here about rankings and so-called “worst of” lists where companies, CEOs and environmental records are put on notice that they are not making the grade. In most Januarys, TripAdvisor.com comes out with its “dirtiest hotels” in the world.  No more. The CEO Stephen Kaufer says, “We want to stay more on the positive side, so we’ll continue to feature the best destinations, the top hotels.  We’re slicing and dicing the ‘best of’ in different ways this year, more than focusing on the negative.”  Although the article where I learned about this says there were potential legal considerations and competitive reasons for abandoning the January list, it also mentioned that the original “worst of” list was done for PR reasons and that TripAdvisor is less interested in that now.  Perhaps there is a reputation-reason afoot here. There is so much negativity online on some of these sites and it is so easy to find what you are looking for that a list of the 10 worst may be hardly worth alienating visitors to your site. Everyone worries about the detractors and the praisers. Maybe it is time to just worry about the average site visitor who does not want snarky comments and lists, but just the plain old straight forward facts to plan a plain old relaxing get-away.

Tomorrow is the anniversary of the shooting of Gabrielle Giffords, Congresswoman from Arizona. And let’s not forget the unnecessary killings of six people including a young 9 year old. Many were also hurt, including our nation’s reputation.

At Weber Shandwick, we started studying civility in June 2010 with a follow up in 2011.  We realized that civil discourse was taking a turn for the worse in 2010 and we set out to better understand how the American public felt about this . We did not of course realize what was to come in the Arizona killing spree but we definitely knew that America’s reputation for civility was heading in the wrong direction.

Our research with Powell Tate and KRC Research on civility was breakthrough for a pr firm. The coverage has been consistently high.  There are approximately 10  million mentions of civility when I last searched.

The idea came to me when I was at the Council of PR Firms’ annual event in October 2009.  David Gergen, the political commentator and advisor to presidents,  was a guest speaker and he was talking about how President Obama had mentioned how he had to figure out a way to get people interested in civility. The light bulb went on in my head and I could not let it go. Why not ask Americans what they thought of the tone of our national discourse in politics, schools, on television, online and in sports? How had the American public square become so unruly and what did Americans think they could do about it? And so we started the research. I am proud that Weber Shandwick added to the national conversation in a thoughtful and meaningful way. In my opinion, we should make it our business to teach people what is civil and uncivil behavior. There needs to be a national public education program to better inform people what the limits are.

In 2011 when we did the last survey, Americans expected civility to erode even further. Whereas more than one-third (39%) expected things to turn less civil when surveyed in 2010, more than one out of two Americans — 55% — expected a lack of civility to become the norm in 2011. And incivility did become the norm, not just in politics but in cyberbullying, school bullying and workplace bullying. I could not even guess what people think now as we enter the political cycle. We will be asking again as the incivility season (oops I meant silliness season) begins again.

At least tomorrow, on the one year anniversary of the Arizona tragedy, we can hold our tongues and keep our clicks at bay and be civil to our neighbors. The Arizona tragedy was not really due to incivility but due to the mental illness of a lone shooter. But it did touch the nation’s nerve and made us all think twice about the widening of our civility deficit.

Because I am off from work for the holiday, I have a little time to catch up on things I meant to read in the months before. I was particularly interested in some research on CEO transitions and its impact on the value of the enterprise conducted by FTI.  A few facts jumped out at me from their study among the financial community. They found that one-third (32%) of investor decisions are impacted by the reputation of the CEO. Moreover, the reputation of the CEO was more important to investors than the reputation of the company’s products and services.

The research covers the value at risk depending on what type of CEO transition occurred. The greatest risk to the enterprise is when a CEO is forced to resign.

Because of my work on CEO tenures and how to build CEO reputation, the findings confirm my own research over the years that CEOs need to show success by that 12 month marker. FIT found that investors give new CEOs about six months to assess the challenges and opportunities facing the company, setting a vision and strategy.  They give new CEOs more leeway to improve market performance and valuation — about 12 months. After the first year, all engines need to be firing.

Another particularly interesting finding was what investors look at in their first 100 days to further establish the CEOs credibility in their eyes….here is what they said was of “significant importance.” Despite the ranking for “charisma,” it is still interesting that it is still estimated to be of high importance and only 16% said it was of limited importance.  FTI concludes that investors take a multi-dimensional view of new CEOs. They expect to see it all.

 FTI Consulting

The new year is fast coming up. I put together my thoughts on reputation trends to expect in 2012. It is on the HuffingtonPost site.  Take a look and let me know what you think. Happy pre-Xmas day.

 Employee communications will undoubtedly be the hot topic of the next few years, especially in the reputation space. As leaders come to terms with the fact that employees can be their best advocates and worst badvocates, internal communications will rise to a new level. That’s a good thing because I think leader-to-employee communications is more immature than the art and science of external communications.  With all the technology we have, you’d think that employee communications would be more advanced. But it is not.  Research by Dov Seidman and the Boston Research Group surveyed thousands of employees at all levels. One of the more startling  findings was that 27% of bosses think that employees are inspired by their firm, when in fact only 4% of employees agree.  And 41% of bosses say their firms award people based on values rather than financial performance.  Only 14% of employees agree. Bosses have  much to do to get employees inspired and willing to go the distance to make their firms successful and a place others want to work at. Talent, leadership and culture are drivers of reputation. Time to inspire before it is too late.

We recently released an interesting exploration on the relationship between top corporate communications officers and legal counsel when it comes to reputation management. I have already posted about this relationship where these two senior corporate officers seem to be working together more than ever. In light of the multiplying crises that companies and its leaders are facing on an hourly basis, the relationship between the two officers including outside counsel has to be strong and respectful.  As we say in the report, “general counsels (GCs) and chief communications officers (CCOs) are now finding themselves participating in the same reputation management strategy meetings, conference calls and contingency planning sessions. GCs, external legal advisors and CCOs now have no choice but to trust and understand each other.”

There are several noteworthy insights and best practices in “Managing Legal and Reputation Risk” but two stand out for me in particular. The first is that you can’t prepare enough and expect surprises. …”executives still find the nature or intensity of the situations they’ve managed to be unfamiliar or unanticipated on some level.” This is so true. There is always something overlooked or unexpected.  In fact, it seems to me that it is getting harder to find precedence for some of the crises that arise. For example, the Olympus crisis has few precedents.  For this very reason, being ready, practicing a few scenarios ahead of time and giving time to “near misses” are sensible readiness processes to have in place.

Another finding that resonated with me was how general counsels appeared more willing today to balance the interests of the business with legal priorities. They said this, not just me. There are times when the short term hit (such as apologizing or admitting that the company could have done better and will do better in the future) outweighs the costs of winning or losing in a court of law down the road. The fact that many of the legal counsels we interviewed agreed that the “short-term pain for long-term gain” is often the right strategy demonstrated the transformation in communications-legal circles that we explored.