Posts Tagged ‘reputation’
It is turning into a red hot trend and helping to chip away at that uncivil reputation about America. And it is happening right here now. A colleague at work even told me how a total stranger ahead of her on line paid for her cup of coffee the other day and how touched she was. Then I saw this article on the concept of paying it forward. When cars are waiting on line to order a burger or chicken sandwich or milkshake at their local drive thru, they pay for the person behind them — no strings attached. And it just starts a wave of others doing the same. “We really don’t know why it’s happening but if I had to guess, I’d say there is just a lot of stuff going on in the country that people find discouraging,” said Mark Moraitakis, director of hospitality at Atlanta-based Chick-fil-A. “Paying it forward is a way to counteract that.” Some of these drive-thru operators are saying that this happens several times a day now. Because I dont drive often, I have experienced it less frequently here in New York City. However, it’s a great idea for enhancing our reputation as a nation of kind human beings that have the capacity to speak in civil tongues (unlike the shenanigans in DC). For more on Civility in America, read here. Happy halloween!
You have to love him. Was just reading from Fortune’s Most Powerful Women summit and came across Warren Buffett’s latest description on great reputations. He obviously has the insanity in Washington D.C. over the debt in mind.
A great reputation is like virginity – ‘it can be preserved but it can’t be restored.’ Once you default, it’s hard to go back.
Everyone wants to measure reputation. Measurement, big data, metrics are all the conversation today. As I have mentioned before, reputation is high on CEO agendas as they see more companies lose reputation equity and that calls for better research. I just came across the Arthur W. Page Society, The CEO View: The Impact of Communications on Corporate Character in a 24×7 Digital World study which noted that some CEOs “report measuring as many as 30 different brand attributes as experienced by as many as 15 discrete stakeholder groups.” That give you a sense of how research has become more complex as the world has become smaller and scrutiny greater. 15 different stakeholder groups! It used to be employees, customers, media, investors and government officials. So whose among these added groups? NGOs, online influencers, bloggers, naysayers….it is never ending.
The report calls this “high-resolution measurement.” A great term. Hard-data rules.
None of us want to ever underestimate the importance of corporate culture and the impact of employee satisfaction on performance. It is not just window dressing. A study by Professor Alex Edmans at London Business School found that when a company makes it onto the Fortune 100 Best Companies to Work For list, it generates 3.5% higher stock returns per year compared to its peers. To be exact, it found that companies listed in the “100 Best Companies to Work For in America” generated 2.3% to 3.8% higher stock returns per year than their peers from 1984 through 2011. Management journal, strategy + business says this about this effect of employee satisfaction,”There is money to be made from employee satisfaction. Let’s all get rich and happy, but not necessarily in that order.” I might have to argue with that but anyhow…here are the facts from the research. A great stat for demonstrating that it pays to build a terrific culture:
The results clearly point out that job satisfaction is beneficial for firm value and ultimately, reputation.
Read about it here.
The Arthur Page Society just issued a new report on The CEO View: The Impact of Communications on Corporate Character in a 24X7 Digital World. The 20 interviews with global CEOs reveals many insights on the evolving role of the CCO (corporate communications officer) in companies today. What is special about this report is that it provides a view from the very top, from the CEO himself or herself. In a section on what’s expected from CCOs in this brave new always-on world, one of the findings caught my interest because of the reputation angle. They refer to it as ”High-Resolution Measurement.” The report states:
Today, CEOs expect their CCO to deliver an accurate, data driven picture of their company’s reputation at a level of detail that is often very granular. Some CEOs report measuring as many as 30 different brand attributes as experienced by as many as 15 discrete stakeholder groups. While the levelof detail and timeliness demanded by CEOs vary, the new emphasis for 2013 is the demand for hard data.
It sounds to me like CEOs want it all because they now understand that the single employee loner or the most vocal customer detractor or the regulatory body in another country or the evolving patient group launching a new website or the members of a NGO group can easily harm the company’s reputation within seconds and make the damage last days, weeks or months. Instead of just worrying about how reputation is faring among a set portfolio of key stakeholders, CEOs now expect CCOs to be on top of those peripheral stakeholders that can rise up and reap havoc. Hard data has the potential to answer many of these questions. I always say that managing reputation by anecdote does not tell the whole story (or even some of it).
There are many more insights worth discovering in the report. Give it a read to understand how the role of the CCO is changing and how vital that position is to the company, the CEO and to the reputation universe.
The pendulum is always swinging when it comes to CEO reputation. All of a sudden, there’s more frequent discussion about empathy, humility and the softer side of things. I have mentioned this trend a few times already. Today there’s an article in the WSJ about a new crop of boring CEOs in the financial sector. Boring with a small “b.” Underneath it all is the desire for boards to hire CEOs that sport no controversy by how they behave. These boring CEOs don’t necessarily command big bonuses (one CEO refused bonuses til 2015). They give eye-rolling, yawn-inducing presentations, focus on words such as integrity and stewardship, work well with regulators and are employee motivators behind the scenes.I bet that they also focus primarily on their company reputation and less on their own reputation. I liked the example given of how one CEO had to play CEO-for-the-day as a final test. “The candidate had to give a webcast presentation and get ambushed by actors dressed as television journalists, among other tests.” The article ended with a warning of what we can expect from our future CEOs: “Boring is the new black.” I give it three years and we’ll be back to the charismatic CEO winning the day. Maybe not.
I wonder if you have heard about the new reputation model that Microsoft is using with its Xbox, the video game. It is actually called Reputation and it alerts you to whether you’re planing with a jerk or cheat. This is their way of keeping out the trouble-makers. It uses a community powered algorithm that alerts the player to whom they are playing with. Pretty clever. Here is an interview I found online with Xbox LIVE program manager Michael Dunn:
The new model will take all of the feedback from a player’s online flow, put it in the system with a crazy algorithm we created and validated with an MSR PhD to make sure things are fair for everyone. Ultimately, your reputation score will determine which category you are assigned – “Green = Good Player,” “Yellow = Needs Improvement” or “Red = Avoid Me.” Looking at someone’s gamer card you’ll be able to quickly see their reputation. And, your reputation score is ultimately up to you. The more hours you play online without being a jerk, the better your reputation will be; similar to the more hours you drive without an accident, the better your driving record and insurance rates will be. Most players will have good reputations and be seen as a “Good Player.” The algorithm is looking to identify players that are repeatedly disruptive on Xbox Live. We’ll identify those players with a lower reputation score and in the worse cases they will earn the “Avoid Me” reputation. Before a player ends up with the “Avoid Me” reputation level we will have sent many different alerts to the “Needs Improvement” player reminding them how their social gaming conduct is affecting lots of other gamers.
Just imagine if we could do this with social media in general. As I mentioned in a previous post, we just finished our fourth annual survey on Civility in America and found that incivility online is becoming more of a hazard than years ago. But just imagine if your reputation was called out and you could avoid all those uncivil people who are bent on maligning your reputation or making your day miserable. Now the tables are turned. If only we could take this algorithm to the Internet in general and all those “Avoid Me” people would be scratched out of our online lives.
CEOs and other executives coming onboard face many challenges. Egon Zehnder recently surveyed international executives about the transition process and one of the findings is that 57% said that it took six months or more to successfully transition to a new position and make full impact. 43% said it took 3 months or more which is about the first 100 days. Realistically, it takes about six months at least. The results are probably different depending on whether the executives comes from inside the organization or outside.
And no surprise here, a minority of executives (30%) had a good transition integration in their new positions. When they did get onboarding, over 80% said it was beneficial. They’d like help with navigating the internal politics and networks (56%) and obtaining insights on the new team they are taking over (41%). It is always the softer skills that need the most support when executives transition to new positions.
How executives make the transition impacts their reputation. Those first impressions in the first 100 days or so are extremely sticky! Therefore, you might want to use social media internally to reach as many people as possible, depending on the culture you find yourself in. But reputations are created when the cement is wet so be cautious and move smartly.
Reputation matters and has grown in importance to companies and their leaders. In a recent article in ABA Banking Journal on the banking industry’s reputation, the topic of intangibles came up that I thought was worth emphasizing.
Years ago, investors only cared about financial performance but it is now clear from some research that 80% of the value of S&P companies is attributable to intangibles like reputation. This estimate is similar to what I have been using for years since I first learned about intangibles vs tangible assets and the enormous influence of reputation on market value. Social media has now made those intangibles easier to access and therefore opened up to most of us how companies treat their employees, build leaders and brands, follow codes of conduct, treat intellectual property, disclose information, care about communities, etc. The article pointed out that Bloomberg terminals provide information on more than 120 environmental, social and governance measures that help investors value the intangibles that drive reputation. This is an important point because whereas financial performance is based on looking backwards, intangibles now available on these types of data aggregators are more forward-looking and give a clearer picture of what might lay ahead for particular companies. The article points to another data aggregator called CSRHub which looks at companies through the lens of metrics including “best of” and “worst of” awards and rankings. As the article says, “Since the market calculates the value of businesses based on anticipated future earnings, poor reputation can be an indicator of systemic problems, which can have an adverse effect on revenues.” It is hard for me to remember a company whose reputation failed and where when the digging began, there weren’t any warning signs ready for the asking. Sometimes I go to Glassdoor.com to just read about where those early warning signs might be for particular companies and wonder why no one has investigated further what employees are only to quick to tell the world. Apparently there’s a banking industry site with reviews called MyBankTracker which was new to me.
Would we have known about Enron’s demise if Glassdoor.com or some other similar site had existed when Enron imploded? I sometimes wonder about that.
A few weeks ago, I read the new Gallup report, The State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders. It is really worth a read because it holds incredibly valuable and meaningful information on employee engagement. One of the findings that leapt out at me was this — only 41% of employees felt that they know what their company stands for and what makes its brand different from its competitors’ brands. No surprise that 60% of executives say they know what their company stands for compared with only 40% of managers who can say the same. The startling fact is that only slightly more than one-third of “other employees” – those nonexecutives and nonmanagers – report that they can explain what their sets their company apart. If you flip this on its head, this finding is telling us that nearly two-thirds of lower level employees are unable and incapable of telling their friends, neighbors and family members – and even worse, customers – what the company’s greater goals and strategies for success are. Just imagine how difficult it is to come to work every day and not have that touch point to drive engagement and meaningfulness. When you next realize that most of these unprepared employees are likely dealing with customers, the urge is to sound the alarm bell. It is practically impossible for an employee to be a positive brand ambassador or brand advocate if he or she cannot articulate why a consumer should choose the company’s product or service over another and furthermore, why they themselves should even go the extra mile to make a difference to the customer. It is also practically impossible to expect your company to have an enduring reputation if it does not have employees who are engaged enough to know why they are there.
Gallup wisely recommends that all new employees should be trained so that they can recite the company’s brand promise and positioning within their first 30 days. I would recommend that management communicate communicate communicate until every employee understands their company’s higher purpose from day one. It needs to be drilled into the employee experience ad nauseum.