Posts Tagged ‘corporate reputation’

2012 is the Year of the Dragon -- the ulimate sign of courage, prosperity and good fortune. Just saw this from the Hay Group. It's pretty cool. People are asked to make their predictions about who will top the Fortune Most Admired Companies survey in various countries and sectors as well as by the 9 drivers of reputation.  I love the dragon theme and design. It is a way to draw attention to the release of the survey on March 1.  The votes are already in from top executives, analysts and board members so here is a way for the "masses" to vote on who their choice for most admired corporate reputation is.  So if you are up to predictions, this might be fun. Definitely auspicious.

 

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.

Took me a few days but finally found a chance to read a fascinating review in the Financial Times of the impact of the insider trading scandal at management consultant McKinsey & Company and its impact on their reputation. Andrew Hill did a fine job providing a historical review of McKinsey's ups and downs over the many years of its storied existence and finding former partners and employees to offer their perspectives. As you already know from the trial of Raj Rajaratnam of Galleon Group, the hedge fund CEO is accused of insider trading using tips from former McKinsey partners' Anil Kumar and Rajat Gupta, global managing partner who left after several terms in 2003.  What intrigued me of course was how McKinsey was recovering from this reputation catastrophe and how it fit with the best practices in my book on reputation recovery. This is not just a bruise but a serious injury to McKinsey's reputation. Here is what they did so far:

• Communicated regularly with employees and former employees
• Initiated an independent inquiry with the help of a law firm
• Improved processes over protecting confidential client information
• Reviewed its ethics policies and standards
• Redefined what constitutes "material non-public informtion"
• Built a formal "stop-list" of client stocks that no McKinsey person can trade (not just those assigned to the account)
• Added new training procedures
• Strengthened governance

True to its highly analytical way of attacking corporate challenges (they work for 90 of the top 100 companies in the world, among others), they looked back at how they handled prior problems. Coincidentally, the article points out that they had been putting together a comprehensive internal history of the firm which luckily offered them insights on how they have historically dealt with challenges to their reputation and livelihood. The latter best practice is one I highly recommend to others. In my book, I talk about the importance of the Rewind period where companies study their mistakes to from the past to create a better future. Lord John Browne of BP did so after the refinery fire in Texas City and asked the question of how they did not see the pattern of errors that turned deadly sooner. Looking in the rearview mirror may take time that leaders do not think they have but critical warning signs are often present. Retromining is a critical piece of recovering reputation. As the new McKinsey global managing director, Dominic Barton, also did, he studied other thriving cultures that failed. As Barton said in the article, he had been “thinking what happened with the suppression of the Jesuits in the 1700s. This may seem strange, but [it was] an organisation that was thriving and doing well and all of a sudden was severely challenged.”

  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.

I was quoted by Fortune's Geoff Colvin in the August 15th issue. He wrote about the Murdoch scandal and mentioned how "large ideas emerging from this story so far will influence companies of all types for years to come." One of those large ideas is that we have officially arrived at the pivotal point where reputation has an edge over financial performance. As Geoff says, this is Reputation's Moment. Companies may not have fully noticed but reputation is indeed "the new currency of corporate success." Music to my ears. In the article, Colvin makes a few points that could not be truer. I excerpt some below which includes my take on reputation as the new metric of corporate success.

"Previous major scandals were mostly financial; the numbers were lies. Not this time. The damage so far derives en­tirely from behavior—phone hacking and possible police bribery—that ap­pears to be illegal but has nothing to do with reported financial results. Wheth­er it’s illegal doesn’t matter anyway; it’s slimy, and that’s enough. News Corp. is deeply tarnished, and the financial ef­fects could be significantly bad. The company has lost about $5 bil­lion of value in the few weeks since the scandal hit. Longer-term effects could be much worse. “The greatest reputa­tional threat to News Corp., aside from criminal prosecution of Murdoch fam­ily members, lies within regulatory and policy circles,” says Rupert Younger, director of the Centre for Corporate Reputation at Oxford University’s Said Business School. News Corp.’s televi­sion businesses—TV networks, TV sta­tions, and satellite broadcasting ser­vices worldwide—are together a major source of profit, and they’re all subject to government regulation. Govern­ment leaders have treated News Corp. gingerly for years, but now “politicians who have been afraid to tackle such an important company are starting to feel that it may be possible to do so,” says Younger. “This could literally destroy News Corp.,” in the sense that the com­pany could be broken up.

Long-term damage to the company’s reputation among customers, employ­ees, communities, and others could also hurt. “In this new reputation economy, people care about whether a company shares the same values as they do,” ob­serves Leslie Gaines-Ross, chief reputa­tion strategist at the Weber Shandwick communications firm. Her reading on the scandal so far: “A clearer demon­stration of the direct relationship be­tween corporate reputation and cor­porate well-being is hard to imagine.”

 These two ideas, the one-man prob­lem and corporate reputation, are ob­viously related. At News Corp. they’re two sides of the same coin. Yet Rupert Murdoch never seemed to put them to­gether. Long before this scandal, he said, “Our reputation is more important than the last $100 million.” He was right.

 In this brave new recessionary world, we have evolved into a reputation economy where companies are trading on their reputations like never before. They are trading for better regulatory favor, more loyal customers, higher skilled talent, more positive word-of-mouth and more capital. Reputation has become an account in credit that you can draw down on or add to. In this new reputation economy, people care about how decisions are made and whether companies share the same values as they do. It is not just value, as in dollars earned, but also values, as in standards maintained, that has become a crucial element of corporate success.

  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.

    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.

How much fun is this? Google Labs has this new program where you can search words among a database of two billion words and phrases taken from over five million books published during the past 200 years. Those are all big numbers and mind blowing if you think about it. You can track the usage of "God" or "enemy" or "Lady Gaga." Since this is now available to the public, I quickly typed in "corporate reputation" to Ngram Viewer and got to see how the term has soared over the past 19 or so years. The above chart shows the upward rise from 1990 to 2009 and demonstrates how much attention has been paid to the term in published books. Then I decided to look at the terms' corporate reputation (blue line) and online reputation (red line). As you can see below, online reputation took off around 1998 and is moving upward although it does not come close to corporate reputation in the world of authorship.   I found all this out when reading an article in the WSJ while sitting on a plane (where I get alot of reading done).  I was captivated by the ability to capture trends by tracing words and cultural signposts over time. It is a researcher's dream and I am busy making slides for powerpoint decks that we use to describe the surge of interest in reputation today. I guess you could say that I have been lucky enough to ride the wave.

Weber Shandwick just issued a research Buy Zocor (Simvastatin) Without Prescription, report on Civility in America. El Paso, Texas. Washington, D.C. Seattle, Washington, We did it with Powell Tate and KRC Research. There is an abundance of interesting information such as the fact that 94% of Americans think that civility is a major problem in the United States and has become worse since the recession, purchase Zocor (Simvastatin) online no prescription. 400mg, 450mg, 500mg, 625mg, Seventy-two percent of Americans view the political world and government as the most uncivil – the highest percentage recorded in the poll – and the absence of civility appears to be having an impact on participation and interest in the political process among broad swaths of the public.

Nearly half the American people (49%) are "tuning out" of government and politics, where can i buy cheapest Zocor (Simvastatin) online, Australia, uk, us, usa, and almost two-thirds of those people (63%) cite the general tone and level of civility as a major factor in their decision. A fairly large 46% of people are tuning out opinion pieces and editorials in the media, and 45% cite incivility as a major factor, Buy Zocor (Simvastatin) Without Prescription. Over one third (38%) are tuning out news coverage and reporting and half of them (50%) attribute their actions to the lack of civility, rx free Zocor (Simvastatin). Order Zocor (Simvastatin) from mexican pharmacy, How can we be an informed public when growing numbers of us are turning away from what makes America tick.

This is bad enough but what got me is how the public is turning away from companies who desperately need their business to rebuild our economy, Fort Worth, Texas. Denver, Colorado. Purchase Zocor (Simvastatin) online, A full three-quarters (75%) of Americans believe that companies that are uncivil should be boycotted. Buy Zocor (Simvastatin) Without Prescription, In fact, 64% of Americans report that they have advised others not to buy products or services because they felt the company or its representatives were rude or uncivil. Companies clearly need to be closely monitoring and listening to their "badvocates" or critics to make sure they are not overlooking poor customer service or improper commentary, japan, craiglist, ebay, overseas, paypal. 1000mg, 2000mg, Reputations can be damaged quickly when customers perceive they are not being treated properly. When you think of companies that are extremely courteous, buy Zocor (Simvastatin) online cod, Buy Zocor (Simvastatin) no prescription, helpful and patient such as Zappos, you realize how important "tone" can be and what drives reputation in some industries, where can i buy Zocor (Simvastatin) online. Order Zocor (Simvastatin) online overnight delivery no prescription, I sure hope you have seen their puppet commercials which take civility to new heights.

Business leaders also have considerable influence, since they are expected to set an example for behaving civilly, Buy Zocor (Simvastatin) Without Prescription. Nearly every American (91%) believes that business leaders should set an example for behaving with civility, buy cheap Zocor (Simvastatin) no rx. Detroit, Michigan, San Jose, California, Not only are business leaders expected to act with civility, but the majority (82%) believe that companies should not tolerate uncivil behavior in the workplace, acheter en ligne Zocor (Simvastatin), acheter Zocor (Simvastatin) bon marché. Buy Zocor (Simvastatin) online no prescription, I always find it remarkable how CEOs are held responsible for everything that goes wrong (as they should often be but not for everything!) and realize that incivility is now being added to their plate.

All in all, Zocor (Simvastatin) in cats, dogs, children, man, woman, men, women, Order Zocor (Simvastatin) online c.o.d, how a company and its leaders communicate and engage says it all and with the Internet and 24/7 media, companies must be extra careful, Zocor (Simvastatin) price. Zocor (Simvastatin) from canadian pharmacy, The recent events with Gen. Stanley McChrystal are just a recent example of how the wrong tone and poor choice of words can get you into hot water, Jacksonville, Florida, Columbus, Ohio. Buy generic Zocor (Simvastatin),  

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