Scorecards

  Not sure if you were sent this article about “green” rankings….based on another article in MITSloan Management Review by Auden Schendler and Michael Toffel (you have to sign in to get the article). It is definitely worth reading but the central premise is that many of the environmental ratings focus on the wrong criteria, namely failing to incorporate advocacy activities that influence environmental regulation. What the article says is that environmental ratings should also include whether a company’s political actions support or undermine climate action. From a reputational point of view, these sentences stood out:

Third party corporate responsibility ratings matter. They help consumers vote with their wallets, aid job seekers with employment decisions, affect employee morale, guide socially responsible investors and pension funds and generate good — or bad — PR for businesses. Research has shown that poorly rated firms respond by improving their performance.

We work with companies on rankings of all sorts. And these “green” ratings are very sought after. There is no perfect scorecard that I know about and yes, companies can game the system even when they don’t deserve the reputation burnishing. What else is new? But winning them is important to reputation-buidling of credentials in the environmental space. And for those companies that are not truly green today, these environmental scorecards push them to do better and that’s what counts in my book. I often tell companies to go ahead and apply for Best Place to Work awards because it gets the CEO involved and gets leadership focused on one day being among the chosen few. Even if you don’t win, you usually can get your scores to determine what you need to do better. The same goes for climate change. If you don’t win, that’s okay. Try again next year.

The article rightfully says that these rating systems should factor in other criteria such as political contributions, CEO advocacy and NGO relations. True. And they also rightfully say that these rating systems could benefit us all by spurring corporate activism “to solve one of the world’s most pressing problems.” True. But we should recognize how far we have come already. I remember when there was no such thing as ”green” ratings. As it’s been said, we’ve come a long way baby.

The new CSR Index from Boston College and Reputation Institute is out.  Katherine Smith, executive director of the Carroll School of Management Center for Corporate Citizenship at Boston College, remarked, ”Reputation is now widely accepted as a valuable intangible asset for firms, and as such it is an aspect of business that is earning increasing interest and attention from the C-suite and board. It is an indicator of how strongly connected consumers are to a brand. The effectiveness of a company’s reputation management will influence the bottom line — in either a positive or negative manner.” A total of 285 companies were measured among the general public for their best corporate citizenship reputations in the U.S.

Interestingly, there was a decline in ratings (2011′s top rating of 80.59 vs. 82.67 in 2010) speaks to the higher expectations placed on companies and greater skepticism about business in general. The continuing scandals, CEO ousters, board malfeasance, strategic missteps, etc. is now placing an equally intense spotlight on integrity and governance issues as it does on corporate social responsbility.  Additionally, I have been asked more than once whether CSR is fading in importance as the economy sours and the world seems to be in one big funk.  My answer is that it is probably more important than ever that companies step in to make a difference and commit to creating a better world. I think that citizenship is tablestakes today.

First, happy Memorial Day to those of us in the US. And many thanks to those who have fought valiantly in defense of the USA!  We are honored.

Turning now to reputational matters on my mind, I was thinking about reputation rankings over the long three day weekend. I happily concluded that our national obsession with rankings is actually a good thing.  Although I often  post about the endless number of top 10 and “best of” lists that quantify the meaningless to the meaningful, there is a silver lining to our rankings mania.  Companies — in all regions — work hard to be admired. Instead of complaining about the information fog we now live in brought on my all this quantification, I realize that we are lucky to have them in the first place. These reputation yardsticks help to challenge companies to measure up reputationally or move out!  Companies, from good to great, want to be seen as the most admired, most respected, most reputable and be chosen over their peers. The end result is good for us all  because companies now must regularly apply their resources to being good corporate citizens, best places to work, good quality providers, etc.  And what could be wrong with that.

 Just a thought for the lovely weekend that we are having here in the US and thanks again to those who have made Memorial Day what it is.

          I think about rankings and scorecards all the time. Afterall, I cut my teeth on Fortune’s Most Admired Companies years back.  At the time, there were not many competing scorecards. And, afterall,  today we have an active rankings practice at Weber Shandwick that we call Scoreboxx. We help companies all the time understand what rankings are important to pursue and which are not worth the time. There is barely a day that I don’t hear about a new scorecard or as I have mentioned in a post I wrote on reputation trends, a newworst-of  list.  In fact, I have started collecting worst-of lists because they fascinate me as much as best-of  lists. Strange hobby but who knows, they could be worth something in the future. Not really.

Today’s New York Times had a fascinating article on the rankings and metrics obsession that we seem to live by.  The writer even predicted how the frenzy will only rise as we enter the serious election campaign. Little did she probably know that the op-ed page in today’s NYT had a chart on how Donald Trump was measuring up as a front runner in several polls as a presidential candidate.  Here are some the quotes from the rankings article that I highlighted for sakekeeping. They go far in explaining our rankings addiction.

“Numbers make intangibles tangible,” said Jonah Lehrer, a journalist and author. “They give the illusion of control.”

“The trouble, though, is when we mindlessly and blindly rely on those numbers to tell us everything,” said Sherry Turkle, a professor of social studies of science and technology and director of MIT. “Just because we have the skills and ability to put metrics on everything doesn’t mean we should.”

“This reliance and overweening trust in numbers is to some extent generational,” said Howard Gardner, a professor of cognition and education at Harvard Graduate School of Education. “For almost anybody in the United States under the age of 25, the only models are quantifiable rankings,” he said.

 A few comments. I don’t think we can blame everything on the younger generation although Gardner has a point about everything being quantified for them (SATs), so why shouldn’t they apply it everywhere else?  The truth is that all age cohorts use rankings to pick the best restaurant, best travel location, best employer and best college to apply for.  We’re all hooked.

The article also goes into how authors end up measuring themselves by Amazon rankings of books sold.  As the author of two books, people always ask me how many books did you sell? Personally, I have no idea since I wrote the books out of love for my topic, reputation, and much much less for my status on the number of books sold.  However, I sometimes think I am not a very good author because I don’t know the answer to this frequently asked question and I’d be a better person if I at least knew. Despite that, I have to get better at checking Google Analytics to see how many people read my blog. When I have looked at it in the past, I could not figure out whether I should be blogging on Fridays or Mondays or Thursdays and just gave up. I have to get better at this because I don’t know how I fare!

Another element in the article certainly caught my eye. It referred to a blog posting on Online Status Anxiety by Jonah Lehrer who has a new book out on How We Decide.  He is so right. People are obsessed also with the number of followers and fans and likes.  Our social ranking is now quantified.  Yikes. Here is a selection I took out of Jonah Lehrer’s blog posting:

“Now that the social web is maturing – the platforms have been winnowed down to a select few (Facebook, Twitter, LinkedIn, etc.) – some interesting commonalities are emerging. The one shared feature that I’m most interested in is also a little disturbing: the tendency of the social software to quantify our social life. Facebook doesn’t just let us connect with our friends: it counts our friends. Twitter doesn’t just allow us to aggregate a stream of chatter: it measures our social reach. LinkedIn has too many damn hierarchies to count. Even the staid blog is all about the metrics, from page views to unique visitors.”

I think I am going to check out my blog postings metrics today! Enough slacking on the metrics. My online reputation should be the measure of my life!

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.”

As reputation watchers, we are always watching the big barometers of reputation such as Fortune World’s Most Admired Companies and its sister, Fortune‘s Best Companies to Work For (BCTWF).  Below is an analysis and comparison of data points examined on the Fortune Best Companies to Work For list between the years 2006 and 2011. Even further below is some analysis on LGBT offerings, healthcare benefits, job and job sharing growth and other unusual benefits as factors in the 2011 winners of the workplace.

All Data 2006-2011

LGBT As a Factor

In the past decade, American companies have increasingly provided programs and initiatives to recognize the LGBT community in the workplace.  A large 95% of The Best Companies to Work For had LGBT-friendly policies and seven in 10 (70%) had LGBT-friendly benefits in 2008. In 2011, the number of Best Companies with LGBT-friendly benefits was an astounding 88% coupled with an almost perfect 99% of Best Companies with LGBT-friendly policies. While the Best Companies’ LGBT-friendly benefits have always lagged behind LGBT-friendly policies, each year the gap between the two has narrowed; in 2008 there was a difference of 25% which has since shrunk to a mere 11% in 2011. The LGBT community has become a widely-recognized group within the American workplace and the Best Companies have been quick to make headway in this area.

Health Benefits as a Factor

Major corporations at Davos this year came together for the World Economic Forum Workplace Wellness Alliance. The Alliance consists of 31 companies committed to advancing wellness in the workplace. Goals of the alliance include knowledge sharing and developing and promoting the use of standardized metrics to create a global standard of wellness, hopefully increasing worker productivity. Looking at health initiatives for Best Companies, after rising from 2006 to 2008, 100% paid healthcare was in decline from 2008-2010.  2011 saw the first uptick in two years moving from 13% to 14% of Best Companies but still not near the peak of 21% in 2008. While 100% paid health seems like a luxury not all companies can afford, a healthy work force can be a powerful tool that may make the investment worthwhile. On a similar note, only 59% of Best Companies offered subsidized gym memberships in 2008 compared to a whopping 78% in 2009. The number of Best Companies with subsidized gym memberships has fallen in the past two years, but far from pre-2009 levels (currently 71%). Best Companies are still trying to keep their workforce fit and healthy even in the wake of a recession which demonstrates that employee health is a staple of a great workplace.

Unusual Perks as a Factor

Recently, more employers have been offering not only physical health perks, but mental health programs as well for their employees. Health isn’t confined to gym and fitness centers. Companies like Zappos.com offer employees an on-site resident “life” and “goals coach” that advises employees on work/life balance and discovery of  higher meaning in their lives (sounds awesome, right?). Defense contractor SRC/SRCTec offers employee-led support groups that focus on alleviating the stress of caring for an aging parent. And starting with a yoga room at Ebay in 2008, the idea of peaceful exercising is re-emerging in 2011 with Intuit’s free Yoga, Pilates and Zumba (Latin-inspired dance fitness–first time I heard of this, oops) classes.

Job Growth & Job Sharing as a Factor

While perhaps a reflection of the economy, average job growth at the Best Companies ticked up slightly after falling to its all-time low of less than 1% in 2010. Traditionally, average job growth for Best Companies had hovered between 7% and 9% (between 2006-2009) before falling sharply in 2010. For the Best Companies, average voluntary turnover also moved in a similar direction. Voluntary turnover fell from almost 12% in 2009 to 7% in 2010 where it has remained flat through 2011. The past three years have proven to be difficult for the unemployed, perhaps pushing more workers to hold onto their positions.

Job sharing reached its zenith in 2007 with 71% of Best Companies offering such a program. The offering steadily declined for the next two years with a small surge in 2010, but ultimately falling to a five-year low of 56% in 2011. Job sharing may be on the decline lately as more Americans are pressed for income, looking for full-time employment as a suitable solution.

[Many thanks to Ross W for his help on this.]

If you are interested in “the order of things,” as Malcolm Gladwell titles his smart article  (subscription required) on college rankings, you will be very keen to read this article appearing in The New Yorker. The central argument is about the validity of the U.S. News rankings criteria and its ability to drive sane university presidents insane. The U.S. News magazine no longer exists but the appetite for these sundry rankings of colleges, law firms and hospitals, and more, is unsatiable.  When the 2011 rankings on the Best Colleges were released, the web site saw more than 10 million visitors that month. As Gladwell says, the head of the rankings team — Robert Morse – sits atop an entire  industry that invented itself. 

Gladwell goes through arguments one by one to point out the arbitrariness involved in picking  the best colleges. He says, “There’s no direct way to measure the quality of an institution–how well a college manages to inform, inspire, and challenge its students. So the U.S. News algorithm relies instead on proxies for quality–and the proxies for educational quality turn out to be flimsy at best.”

Ultimately Gladwell gets to the key point. He quotes Michael Bastedo, an educational sociologist at the University of Michigan, who has spent time analyzing the U.S. News methodology. Bastedo says it simply, “rankings drive reputation.” I could not have said it better — in three words no less. The professor also says, and I wholeheartedly agree, that sometimes rankings do work. He cites two good examples — asking professors in a field to rate others in the field makes perfect sense since they probably read what their peers are writing, saying and doing while training students. Or he says that rankings work when the subjectrequires specialized knowledge such as the Wall Street Journal college rankings based on what corporate recruiters are seeing from graduating seniors looking for jobs.

But as we all know and intuit for the most part, rankings are very subjective and depend on who you are asking, how the attributes are worded, weighted and ordered. Gladwell’s article is a good read because it becomes immediately clear that many variables go into what makes something number one and it is very likely to be not what you are looking for as a filter.

There is no doubt that there is a vicious loop today where rankings drive reputation and reputation drives rankings. Despite this insightful knowledge from Gladwell, we all still have to compete according to the standards and rankings of the day. Alas, have to go and fill out an application for something right now. I might just win.

 Yesterday we released our analysis on where industry-leading CEOs and the most powerful women in business invested their time speaking in 2010. Reputations can be shaped at such top-tier events and company stories can travel the world, if properly socialized. We used to depend on media coverage to get the message out about a speaking platform but with social media at our fingertips today, a speech before 50 people can travel fast to many more influential people than ever imagined. If companies can properly distribute their executives’ speech-making online, they can now realize an even healthier ROI for their executives’ time than ever before. And let’s not forget how much time, resources and energy goes into just one speech or presentation. It is never a walk in the park!

I am going to blog backwards about our findings by starting with what we learned about the most powerful women in business first and get to the industry-leading CEOs later this week.  Like we had in grade school, today is backwards day.

I am quite pleased that we decided to look at the most powerful women in business because this is a small, exclusive club that demands further research in the communications field. Greater demand for female leaders was recently underscored when we learned that the World Economic Forum now requests that 20 percent of this year’s strategic partnership delegates be female. That polite request is sure making the rounds because I see it popping up all over. Despite the small sample size of these most powerful women (alas!), we did learn some interesting trends about what they’ve been doing on the speaking circuit over the past 12 months. And they’ve been busy. Here are some snippets from our analysis:

• This elite group of powerful business women was extremely active on the speaking circuit in 2010. A large eight out of 10 (82 percent) spoke at one or more events in 2010.
• In addition, the average number of events that each woman spoke at in 2010 was 3.2 events, with 11 women having spoken at five or more events.
• The leading speaking forums in 2010 for the most powerful women executives included the World Economic Forum, Fortune Brainstorm: Tech, the Women’s Conference (hosted by former California First Lady Maria Shriver and Governor Arnold Schwarzenegger), Daily Beast’s Women in the World, and not surprisingly, Fortune’s Most Powerful Women Summit (although not everyone who makes the list is a speaker). However, there was also a wide range of other types of conferences where top women in business spoke such as Business for Social Responsibility (BSR) Annual Conference, Committee Encouraging Corporate Philanthropy (CECP) Board of Boards, Milken Institute Global Conference, and The Wall Street Journal CEO Council. Micho Spring, our chair of the Global Corporate practice at Weber Shandwick said: “The vast majority of these women leaders are taking their communications and storytelling roles seriously. There are not only many women’s conferences for female leaders, but many other non-gender specific platforms as well.” 
• Leading women executives are out in force.  This is quite a broad range which shows that there is demand for these top executives. The types of conferences can be categorized as follows:

Just as rankings are growing leaps and bounds every year, I see the executive conference business expanding even further.  Companies are shaking off the economic woes from the past two years and getting back on the trail to differentiate their companies, narrate their responsibility and possibly turn back the anti-business wave that has beset so many. Conferences have an untapped way of  validating companies by tacitly endorsing that their executives have something to say that is meaningful and forward-looking about our collective futures. And women execs are clearly doing their part as well.

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

A friend of mine sent me the new list of the 1000 most sustainable companies in the world and a blogger’s write up of the ranking compiled for JustMeans by CRD Analytics. I agree that this is an amazingly important and rigorously researched list — The Global 1000 Sustainable Performance Leaders.  Elaine Cohen, the CSR blogger,  calls it the “Gold Standard for assessing and ranking the overall sustainability performance of public Companies. She went on to report : “Diving deeper into the data shows that the economy delivering the highest number of sustainably performing companies is Japan (with 191 of the total G1000), followed by the USA (163) and Great Britain (144). Sector-wise, the metals and mining sector leads with 68 companies in the G1000, followed by chemical companies (63) and commercial banks (63). “  Not what I would have guessed which makes the list even more interesting.

What also caught my attention, however, was her mention of  chronic list fatigue.  “The G1000 appears to be an appropriate solution to what has become ‘ranking-fatigue’ over the past few years. The multitude of rankings, ratings, lists and proud press releases, including the most recent DJSI 2010 pronouncements, which together show little or no correlation between the most sustainable corporate citizens in each list, not only confuses, but can positively mislead.”  I was glad she mentioned the fatigue issue which I believe I have remarked on as well.  We often get called about reputation rankings (which we call Scorecards and fall under our Scoreboxx offering) . We are often asked which one to believe and what is the difference between this one and another one and what is the most important. We also get asked for estimates on how long it takes to apply for a particular ranking.  Surprisingly, we have an idea.  As reputation scorecard experts, I would answer, “it depends.” It depends on the quality of the ranker and importantly, who did the rating — employees, investors, consumers, executives, industry peers, etc.  There are as many answers to what is important to a company as a reputation-builder as there are rankings. It would be great if there was just one ranking but there are many….in fact hundreds.

Just this week ,the Interbrand survey of top global brands was released. Over lunch last week, someone mentioned a survey that pitted non-Ivy league vs Ivy-league schools against each other according to employers.  State schools won out for the best candidates for entry level positions. Penn State performed best and the Ivies were put to shame. The reasons why are enunciated in the article. An interesting read.

The Fortune World’s Most Admired is probably on its way to companies in the next few weeks. Ranking fever arrives. Wondering if there is a cure.