Posts Tagged ‘reputation management’

The S&P downgraded the U.S. credit rating last night. The full report is here. What struck me in its overview are these two points (below) which directly speak to how our fiscal reputation is being managed. In other words, the ability of our governing leaders to work effectively as a management team is no longer putting the US at the head of the class.  We all know that when corporate boards do not function well, they are called to task, reputations gets tarnished and board members find themselves disinvited to serve. We now see the same reputational metric of good governance being applied to our government and the picture is not pretty. S&P is essentially saying that our ability to govern fiscally and responsibly is ineffective, less stable and more unpredictable than it was earlier. And our ability to collaborate across parties is in question.  It’s not just the credit rating that’s being discredited but our fiscal reputation as well.  America’s reputation for fiscal safety is being downgraded as well.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

  It seems that Checklists are all the rage. Everyone seems to mention the Checklist Manifesto by Atul Gawande which I now have on my vacation reading list.  Along these lines, Michael Useem, Wharton management professor, has written The Leader’s Checklist which is out now. I think I will have to read that too because it is a subject that I follow regularly and I’ve always liked his work.  Useem provides the 15 mission critical principles that help leaders navigate the stormy waters of crisis and personal success. In an interview with Useem, he talks about the need for a checklist to avoid “unforced errors.” I was not sure what that meant so I looked it up and quickly found that “unforced error” is a sports term (which is why I had not heard it).

Forced Error- A forced error is when your opponent hits a really good shot (powerful groundstroke, angled volley, drop shot, lob, etc), that you have to run, stretch, dive or scramble to get. Once you get there you are unable to put it back into the court or you hit the net. Technically, you made a mistake but since the your opponents hit a superior shot, they “forced” that error. Basically, if you hit a shot on the run and it doesn’t go in, it’s a forced error.

Unforced Error- An unforced error is a mistake that you make due to simply hitting the ball incorrectly (shanks, mishits) or using improper positioning, lack of precision or just bad luck (such as hitting the let cord and having it drop back on your side). In other words, if you are playing a neutral rally and your shot goes out of bounds or hits the net, that is an unforced error.

The point is that Useem is telling leaders to keep a checklist so that they don’t make a mistake such as forgetting to remind employees about following ethical guidelines or how to treat a customer everytime they walk into a room.  When it comes to a Reputation Checklist, we actually have one — 99 Tips to Safekeeping Reputation. Although there are 99 of them, they are all worth reading and takes about four minutes. Take a read. I keep mine on my bulletin board behind my desktop at work as a reminder that reputation needs to be managed daily, if not hourly.

  Lawyers and communications specialists seem at times to inhabit entirely different worlds.  This is something that I’ve often thought about but has received little attention in the public relations and legal counsels’ worlds. So it’s time to think about this new trend in reputation managment that can help companies managing crises and issues better.

Consider this example I was told that has to do with the comments of one anxious general counsel reviewing his company’s first few Tweets.  “Looks good but you have a typo at the end,” the in-house counsel warned the communications officer.  The more socially-savvy communications person quickly replied that the so-called typo — a colon and closed parenthesis — was none other than that now nearly universal icon … the smiley face .

Of course, not all general counsels are so unfamiliar with standard and new social media customs and practices.  However, companies can no longer afford a disconnect between legal and communications.  In times of crisis, particularly, the general counsel  (GC) and chief communications officer (CCO) represent two departments often at odds with one another.  Lawyers typically urge minimal or even no public comment out of fear that admissions might damage a company’s case in a court of law, while communications professionals typically demand prompt public comment, even a CEO apology, to avoid further damage to a company’s reputation in the court of public opinion.

As the “information age” produces one corporate crisis after another and social media zingers multiply at alarming speed, everyone is responsible for keeping a watchful eye on defending company reputation as well as protecting against slander, libel and other legal  difficulties. Despite decidedly different approaches, GCs and CCOs are now both finding themselves participating in the same “reputation management” strategy meetings and conference calls.  They now have no choice but to trust and understand each other.

Here are three ways that these corporate officers can get on the same page:

1. Socialize.   Instead of dealing with problems incident by incident, start strengthening the relationship between GC and CCO by getting them to the table to jointly craft the company’s social media policy and guidelines.  Only about one-third of companies have such policies which leaves plenty of seats left for the two departments to fill. Agreeing to and understanding the needs of the other and providing for thoughtful compromise ahead of time can only help protect against trade secret violations, adverse publicity, confidential leaks and inadvertent disclosures about employee departures and misbehavior. Companies with employees who know  what’s allowable and not allowable on Facebook, Twitter, LinkedIn and blogs because the GC and CCO have cooperated will save their companies sudden embarrassment and reinforce continued cooperation between the departments.
2. Scenario Plan.  The time to build mutual respect is before reputation risk knocks at the door. Best practice requires getting  GCs and CCOs together with CEOs, HR, IT officers and others to rehearse various best and worst case scenarios, online and offline.  After a few sessions of rapid response simulations (we have an online simulation crisis drill called Firebell to do exactly this),  GCs and CCOs will have the opportunity to work out obstacles and craft prepared statements to hypothetical crises that will give them a head start should real crises occur.
3. Value Set.  Anchor both communications and legal concerns to the company’s core values. The values by which a company operates serves as the grease that reduces the natural friction between legal and communications best practices.  Both departments need to consistently call up company values – for example, integrity, good governance and customer always comes first – as the standard by which any legal or communications decision is judged.  Once the primacy of company values is accepted as the ground rule, cooperation between GCs and CCOs can be more easily facilitated.

         We just released Chief Communications Officers: First 100 Days, an “e-book”  reflecting advice from dozens of veteran corporate communications officers (CCOs) around the world on how best to navigate their first 100 days. This mini-book is a favorite of mine because early tenures are a topic that interest me greatly. My first book on a CEO’s early tenure, CEO Capital, describes many of the same challenges and advice on how to hit the ground running.  For corporate communications officers, those first few weeks are critical because a crisis could arise at any moment and communications is always front and center these days. Therefore “onboarding” (a new HR term) needs to go smoothly because every day could be a red flag day.

Because we regularly survey corporate communications officers around the world, this e-book seemed like a natural extension of our insights on this rapidly rising and influential position.  In our last survey, we learned that nearly 6 out of 10 CCOs (58%) in Fortune 500 companies now report to the CEO. This was a 10 percent increase from the year earlier. The e-book captures advice in CCOs’ own words on do’s and don’ts for those newly coming on board and what to avoid so as not to derail the best of plans.

When we asked CCOs what the three greatest challenges were, this one response seemed to sum it all up:

1. Reputation management in an era of deterioration of traditional media,

2. Increasing effectiveness of voices of outrage, and

3. Light speed evolution of social media.

If anyone has additional advice, please send it this way and enjoy the book. (If you need a pdf of the book, write to me at lgaines-ross@webershandwick.com).

   Attended an interesting roundtable yesterday hosted by Business Marketing Association and Forbes. The topic was managing reputation in the new world of the Internet. Some interesting points surfaced:

• It is easier now to track reputation and ROI with the Internet. However the field of social media is so new that it is very difficult to track back to a baseline.

• Marketers are now interested in reputation as they realize that the company behind the brand matters. CMOs are the new entry point into companies as they see the connection more vividly. Product marketing is not enough.

• Perception is nice to have but behavior is have to have. You need your customers to act – buy your products, give you the benefit of the doubt in time of crisis, recommend you to others, spread word-of-mouth.

• Social media is the new Petri dish.

• Reputation Institute’s Anthony Johndrow reported on a study among CMOs and CCOs. They found that 97% are interested in reputation, 89% are doing something in the space but only 33% are measuring its impact. Disturbing when companies spend so much on reputation in general.

• We should be referring to “social business” not “social media.”

• Integration between traditional and social is key.

• One of the reasons more companies become social is that competitors force their hands. When a competitor starts using Twitter, YouTube and Facebook, its rivals are propelled into this new world.

• Sometimes your critics can be your best advocates. An example was given of a relentless critic who also links to company articles mentioned on Twitter that promote the company’s point of view. So your online enemies can also get your word out if you just time it right.

Everyone agreed that reputation has become more complex, harder to manage and everyone’s job. In addition, the bar is now not as high or as low as it was just one year ago. Since so many companies are now using Twitter for engaging customers and neutralizing reputation damage, some of the early examples such as Dell and Comcast are just that – text book examples and expected today.

The airlines have a lot to tell us about managing reputation and being prepared. I came across an article in BusinessWeek a few months late but I found some of the advice about preparedness and reputation resilience worthwhile enough to repeat here. The gist of the article was that the airline industry “is truly the school of hard knocks.” They are always dealing with immense challenges such as soaring fuel prices, terrorism, storms, horrific events such as 9-11 and the global economic downturn, labor strikes, accidents and government intervention. Plus the airlines have amazingly vocal naysayers who take to the Internet when they lose a bag, dislike the food, miss a connection. American Airlines (Disclosure: Client) reaches out to people on social networking sites, according to Roger Frizzell, vice president of corporate communications, brand and advertising and quoted in an article on Forbes.com about brand detractors or “badvocates” as we call them at Weber Shandwick. “In August, when New York’s LaGuardia Airport closed a terminal due to a bomb threat, American Airlines posted notices on its Web site and sent a Tweet to its followers on Twitter. It leaves general information on lost baggage and canceled flights on its Facebook site. Getting the word out before consumers run into problems at the airport is one way to avoid criticism, says Frizzell.” Reputation management is a daily business in the airline industry.

Here are the lessons from the airline industry that BusinessWeek summarized.

1. You need to prepare for what you cannot control which is most everything today. Executives should be trained to respond to the unexpected and boards should review contingency plans because worst case scenarios do happen.

2. Board members need to be more patient while plans are being implemented as airline executives manage with unintended events. Sometimes the implementation is what makes or breaks a successful crisis response. Stakeholders are more forgiving when the recovery plan works.

3. Get all stakeholders aligned. The airline industry seems to have more than their share of stakeholders and if one segment is not moving in line with the others, beware. “For example, when airline employees oppose management, they take it out on customers, who in turn stop flying the airline, which in turn affects shareholder returns – a vicious cycle.” No one should be overlooked although it takes an army to manage this.

4. Seize the moment. In my book on reputation recovery, I called it Seize the Shift but it is the same idea. Opportunities come around usually only once when massive shifts in business or public opinion are bubbling up. Make them your opportunity because chances are that they won’t resurface in the near term. It is everyone’s job to be alert to those moments when fundamental change can be applied.

Fast Company talks about the “reputation economy” in its December issue. We have heard that term before because it applies to the exercise of lifting your own reviewer ratings when you write something on Wikipedia or post a video online.  Companies such as amazon and ebay have always been about the reputation economy as people review books and sell or buy products online.  The reputation economy has become more complicated as newcomers arrive such as Yelp, TripAdvisor, Angie’s List and Urbanspoon.  I have gone to all these sites looking for reviews although I must say that I am never sure how to discern which reviewers I can trust. I mostly get overwhelmed and move on. The article in Fast Company, however, is about a dispute at Yelp where they banned some members and they in turn started a class-action lawsuit along with the customary Yelp-sucks.com site. The argument is about who has the power to censor and harm another’s reputation. Sounds like a whole new class of lawyer will have to emerge to settle these types of disputes on the reputation trade.

I thought I would also mention another interesting dispute covered in Advertising Age. A message on Twitter complained about a management consulting company’s trade booth at Adobe Max and called them complete clowns.  A digital strategy director at the company, Sapient, debated about sending back an angry response – will it draw more attention? Should I wait and see how much impact the original twitter made? As the Sapient exec Freddie Laker said, “Social media presents tremendous opportunities to connect with potential customers but it also requires a thick skin, some self-restraint and most importantly, the wisdom to know when and how to communicate.” Among the advice he offers, one is uppermost in my mind…think twice before you respond. In fact, I would say think thrice (three times).

Reputations are increasingly vulnerable online and no one will be spared. That is obvious at this point.