Posts Tagged ‘Economist’
It seems like every year I hear that Chinese brands and their reputations will be going global. Apparently The Economist thinks that 2013 is the year that Chinese brands will truly go global. Their reasoning is that Chinese companies have grown as big as they can in their own country and now need to expand overseas markets. A second reason is that Chinese companies are now longer just B2B ones but are now competing with brands that are B2C that develop dynamic marketing campaigns and require different campaigns. Some of these brands that we will be introduced to in 2013 are Baidu, Haier, Tencent, and Metersbonwe. Other reasons that Chinese companies are finally going to go global include seriously building global cultures as Lenovo has and making sure that corporate entities include product names that are less complex and more recognizable. As the article says, Jianlibao which is an energy drink, had trouble expanding beyond Chinas because its name was hard to pronounce. Try Wanxiang.
Global Chinese company reputations won’t be easy to build regardless of how much muscle they put behind them. There is a well-entrenched perception in other regions that Chinese companies produce low quality products and are poorly governed. William Brent, a colleague of mine who helps run our Emergent China practice, was quoted in this Economist article as saying that “2013 will mark the year when Chinese multinationals come face to face with transparency.” He is right. Corporate governance is a driver of strong reputations.
If this is the year of Chinese reputations, I look forward to it.
Totally fascinating to me that China releases a list of its wealthiest citizens, similar to the Forbes 400. The list, Hurun Report, had some amazing facts worth sharing and which I learned about reading The Economist. The leading source of wealth came from individuals making their living off of manufacturing and not real estate as it was one year ago. There were also interesting correlations between wealth and zodiac signs with those born in the year of the Rabbit outranking those born in the year of the Snake (2nd) and year of the Dragon (3rd). At the bottom of China’s wealthiest 1000 individuals are those born in the year of the Ox. The reputation of the Ox is in danger.
But most interesting was the downfall of some of those who make the Hurun or the Forbes Wealthiest people list. There is greater scrutiny from tax collectors, regulators and the public. There is even a book titled “The Curse of Forbes” which describes the problems that surface when being lauded as one of the nation’s richest. In a report that the article cites, researchers found that those companies headed by entrepreneurs who make the list find that their market value declines sharply three years afterwards. Clearly, being on a rich list in China brings the bad with the good and puts reputations in jeopardy. The Economist title was “To Get Rich Is Not Always Glorious.” An apt headline.
I was delighted to see this forecast for 2011 in The Economist about CEOs. The article, Words Fail Them, strikes a chord with me as I look ahead too. As I mentioned in my last post, I made some predictions about Reputation Trends for 2011 on Huffington Post. One of the eight trends was the Ascendancy of Social CEOs. In our research on Social CEOs, we advised that CEOs consider video as a primary tool for communications. The Economist article agreed that video was critical to this new age of communications but was much bolder than I was:
- Email as a mass communications tool for corporate messages will be finished. Video will be recognized as more effective for reaching internal and external stakeholders.
- Video is expected to be more than 75% of Internet traffic by 2012. The Economist believes that over the next 12 months, companies will be driving video usage and leading it.
- A different kind of person will ascend to the corner office who can take advantage of video’s simplicity and immediacy. That’s an interesting prediction! A little too close to the CEO celebrity argument that died a sudden death a few years back. The Economist said: ”Charisma will be back in: all successful business chiefs will have to be storytellers and performers. Just as political leaders have long had to be dynamite on TV to stand much hope of election or survival, so too will corporate leaders. They must be able to sell not only their vision of their companies but their vision of themselves.”
- The Economist then made this rather shocking prediction which I don’t buy: “With this shift will come a change in management style. Numbers and facts will be supplanted by appeals to emotion to make employees and customers do what they are told. The businessperson’s emotion may be no more genuine than the politician’s, but successful bosses will get good at faking it.” Obviously you can’t fake leadership and performance through video, as good a tool as it may be. I agree that CEOs will need to master video and master it fast but they cannot pretend to be what they are not and cannot say that which is not true.
I agree wholeheartedly that video will move up the communications chain with lightning speed but authenticity and transparency will still matter when it comes to reputation….no matter who is speaking.
As I wait to watch the President’s State of the Union address, I keep thinking about how presidents and CEOs face similar problems. They are both seen as miracle makers which we all know is impossible to live up to. People and employees expect them to succeed on all counts from day one when in fact, leadership is about steps forward and steps backward. It is a long journey of success and failure. The difference between presidents and CEOs and most of us is that they know that their jobs are mostly about handling the constant barrage of bad news. President Obama, like CEOs, gets all the blame when things go wrong (no jobs) and all the credit when things go right. Unlike CEOs, President Obama is facing some of the greatest challenges he has faced. The Obama festival is now looking like the blame game. CEOs are in better shape reputation-wise than the President because they are slowly climbing out of the economic hole. Growth is coming back and so are their reputations (a little at a time).
We are myopic when it comes to the President. I don’t think there has ever been a harder time to govern and lead a nation. The problems are overwhelming, the media splintered, citizens angry and the politics polarized. I am dying to survey Americans and ask how many are not watching their TVs or listening to the radio for news because it is so unpleasant and uncomfortable.
The President has done wonders for America’s reputation. Let’s see that as a positive. There’s fascinating research by Simon Anholt who estimates that the Obama brand has had a tremendous effect on how brand America is seen around the world. He estimates that premium from Obama on brand America to be $2.1 trillion. According to Anholt, “America is once again the most admired country in the world (having slipped to seventh place in 2008).” That’s a step in the right direction.
The holidays are over and work is back on my mind full-time. Actually it felt great getting back into the rhythm of work. Thankfully I work at a wonderfully-led, collaborative company. I do not take it for granted, believe me.
By the way, before I get going with this post, I should mention that I have an article on Huffington Post titled “Do Companies Care about Ordinary People?” You are welcome to read it.
Over the holiday, I saved some articles that are worth sharing as this new decade begins and 2010 is in its infancy. The first one in my pile is from the Economist. With all the doom and gloom about business greed and corporate no-no’s in the past decade, The Economist identifies several arguments in the defense of business’s reputation. Resetting the reputation of business seems to be an apt activity to start off this new year. For sure, business could use some reputation-building to replace the reputation-bashing we’ve all been witness too. Here are two to mull over:
1. Business “is a remarkable exercise in co-operation.” Businesses manage to get thousands, hundreds and tens of people working together to produce ideas and solutions to problems. The fact that people collaborate for the common good is pretty remarkable when you think of it. I work with my colleagues around the world all the time and some of us have never met. But we all come together to build the Weber Shandwick brand and help clients.
2. Business is “an exercise in creativity.” When business people put their heads together to solve a problem, we can invent the most amazing things such as “devices that can provide insulin to diabetics without painful injections” and One Laptop Per Child.
I might add one more.
3. Business is “an exercise in sense-making.” When I close my book ,CEO Capital, I have a plea for CEOs to infuse companies with meaning. I said and I repeat here, “…it remains a basic human need to be part of something larger than oneself. This essential yearning has not disappeared despite networked computers and the triumph of the Internet.” I urged CEOs to motivate employees and instill companies with a common purpose in the pursuit of worthwhile goals. As Max DePree, legendary leader of Herman Miller wrote, “Leaders owe a covenant to the corporation or institution, which is after all, a group of people. Leaders owe the organization a new reference point for what caring, purposeful, committed people can be in the institutional setting.”
With luck, committed leadership and an improving unemployment rate, business might be able to improve its reputation in 2010 (2011?). I am banking on it.
Apologies for not writing during the past week. I started a posting but this week was a long one. I had wanted to mention a compelling article that I have been carrying back and forth in my work bag and now is a better time than ever. No surprise but it came from The Economist and the topic was about how some companies thrive in the worst of times. Despite the challenging days and months we’ve all been through, crises give birth to opportunities and this is surely one of those times when new companies rise or established ones leap frog ahead of competitors, reputation-wise. We can all read the tea leaves on how certain companies within particular industries are facing major shake-ups as to who is on first, second and third base.
The Economist article noted a few key points that I want to commit to memory (which is why I am writing it down):
- “Recessions shake things up rather than slowing them down. They reward strengths and expose weaknesses, create new opportunities and kill old habits, release pent-up energy and destroy old business models.” Is that what is happening with Wal-Mart and Amazon fighting over $10 best-sellers? Interesting turf wars.
- Several companies thrived or arrived during the Depression — P&G, Revlon, HP, Polaroid and Pepperidge Farms. FedEx, CNN and Microsoft first breathed life during earlier recessions.
- Bain management consultants reported that twice as many companies made the jump from laggards to leaders in their industries in the early 1990s recession AND the vast majority (70%) kept that momentum going in subsequent years. Pity the 30% who did not.
- Nothing wrong with being big (although conventional wisdom seems to think that big companies are bad and too big to fail. Why does no one remember that the largest companies employ the most people? And as follows, they manage through adversity fairly well.) “The most obvious winners are established giants: market leaders that entered the recession with cash in their pockets and sound management systems under their belts. These companies are reaping rewards from investors who are skittish about shakier rivals. They are also using their corporate muscle to squeeze their costs (for example, by negotiating cheap rates for advertising) and so win market share from their competitors. BCG, another consultancy, notes that 58% of companies that were among the top three in their industry had rising profits in 2008 and only 30% saw their profits decline. In contrast, only 21% of companies outside the top three had rising profits, and 61% had falling profits.” Makes sense then to make it hold on for dear life if you are at the top of your industry. The same goes for reputation. Being highly regarded and among the top three most admired in an industry gives companies a second and sometimes third chance. Stakeholders are willing to look the other way and continue buying your products and services. I am not so sure about a third chance however. Reputation erosion almost always sets in if the third chance is wasted.
- Challenging recessionary times also are good for repositioning a company, according to this article. Cisco is repositioning itself as the Human Network, IBM as a Smarter Planet and according to Fast Company’s recent article about Intel, they too are pushing boundaries with their new Atom mobile chip.
- The last line of the article got me: “Indeed, business is more likely to take advantage of this ‘serious crisis’ than the world’s politicians.” Let’s hope not.
To say the least, the article in yesterday’s New York Times on blogging made me wince.
“According to a 2008 survey by Technorati, which runs a search engine for blogs, only 7.4 million out of the 133 million blogs the company tracks had been updated in the past 120 days. That translates to 95 percent of blogs being essentially abandoned, left to lie fallow on the Web, where they become public remnants of a dream — or at least an ambition — unfulfilled.”
I obviously fit into the 5% that keep blogging (or sticks to their knitting). Is there something wrong with me? What distinguishes this 5%? When I finished my dissertation many years ago, I realized that there were many fellow students who never completed the degree. I thought to myself then that there must be something wrong with me for toiling all those years when others just made the decision to move on. I guess I don’t move on well.
Back to my blog, two interesting tidbits for my posting this evening.
First, I read that the pre-presidential Obama administration asked the following of applicants: “If you have ever sent an…email, text message or instant message…that could…be a possible source of embarrassment to you, your family or the President-elect if it were made public, please describe.” We should all be adding similar questions to our employment applications. Social media is key to reputation-building and reputation-busting whether you are in public or private business. [This appeared in the Economist, April 18th, 2009 and cannot find the article.]
The second item I saved recently has to do with the CEO of online shoe store Zappos. CEO Tony Hsieh is the new Jeff Bezos. You may have heard this story if you follow social media tales among the executive set like I do. Hsieh’s Twitters are now quite famous and the company receives extraordinarily high marks in terms of its reputation for extreme customer service (“deliver WOW through service”). What I particularly like is this story about Hsieh’s team focus. Since talent is so important, recruiting at Zappos is heightened. Imagine this. Hsieh offers new employees $2,000 to quit their call center trainee jobs in order to weed out those who won’t make the grade. As reported, three people took the money and ran last year.
Traveling requires a bit of adjusting when I return home. I was in LA and Dallas last week and then returned home to find my laptop not working properly on Sunday. I know….never work on Sundays. Therefore I was locked out of writing my blog and here it is already Wednesday without me having posted anything until now. Travel can be very disruptive despite the well-neededflight time where you get some time to read and think. The passenger sitting next to me missed his flight to Berlin for business and that got me all anxious as we tried to figure out what the chances were that his connection would also be delayed. Turns out he worked at HP in communications so we got to talking about PR. He missed his flight unhappily.
As usual, I was storehousing information on reputation and online reputation management which has occupied a lot of my time lately (the first three from The Economist where they had an insightful special report on the “rich.” The reputation of the financial services sector has certainly taken a big hit and am hoping to see signs of some renewal. But as the facts below convey, people are having a hard time believing everything they hear these days.
63% of wealthy Americans have lost faith in financial services companies (Harrison Group)
64% of people living in Britain think that banks that have taken government funds should not allow executives to get any bonuses at all (Populus Poll)
70% of rich people took some of their money away from their financial advisors (Prince & Associates)
- Turning to social media…41% of companies say they have developed social media policies and guidelines (Paper presented to the 12th Annual International Public Relations Conference by Donald Wright and Michelle Hinson)
- Most intriguing and fun to learn was this… Hitwise, the social media metrics site, says that social media has taken over from pornography as the number one use of the Internet (Paper presented to the 12th Annual International Public Relations Conference by Donald Wright and Michelle Hinson)
All this brings me back to traveling. Yesterday I paid rapt attention to a book review in the Wall Street Journal by David Myers. The book by Winifred Gallagher, RAPT, provides strategies on living a focused life. Ah yes. I felt calmer just reading the book review. But this is what has stuck in my mind since I read the review and hopefully the book (if I can focus long enough to get to Amazon.com).
“To preserve my own mind from electronic takeover, I spend an hour alone each afternoon, without a computer or phone, in a local coffee shop, and I ask my assistant to forward messages from my public email address only near the end of each day. I’ve noticed that I prefer long plane rides to shorter ones, thanks to the extra time for uninterrupted thinking or reading. A University of Michigan research team led by Marc Berman recently observed that students who took an hour-long walk in the serenity of the Ann Arbor Arboretum, rather than through downtown Ann Arbor, showed an increased capacity for attention.”