ReputationPoint

Often, I meet  someone who feels his or her company is misunderstood in a way that holds back progress.   Sometimes this is expressed as “I wish we could get everyone in one room and get them to see this organization (or me) as we really are.”  Well one good thing about reputation management as a discipline in the digital age is that you can do that, virtually.  But, there is a problem. The creation of public reputation is happening without much management, for most organizations.  The way others see you, and what they say about you, is the reality of “you” for “them.”  To borrow a phrase, reputation happens.   Another problem is that most organizations, and most individuals, have a pretty inaccurate view of how they are seen by others, so their efforts to communicate and build relationships are very inefficient.  The more pressure an organization or individual is under, publicly, the more his public reputation-building efforts tend to be inefficient.

To bring the reality of an organization’s values,  and the value it creates, into focus for all audiences there needs to be a simple framework, a basis for discussion and management internally.  Testing a reputation, and assigning one of four reputation stages, is a starting point. From that common view of reality, progress is easier to make.

Companies, financial institutions, professional services firms, universities, products, even individuals need to manage their visibility and their credibility, the experience and expectations that others have of them, in order to move ahead with their strategies and meet their goals.  This is getting more difficult in an era where all information is available across audiences immediately, and where building relationships across time zones and cultures, quickly and effectively, is a critical determinant of success. 

Organizations and their leaders need to accurately understand where they are starting from when they evaluate how to use the expectation management capabilities of brand and reputation management to move ahead.   They must have accurate self awareness in order to build public relationships that enable success, and that self awareness must be projected against a simple model, to support reputation growth or protection.

How can you approach that? There are many ways to get a baseline measure for how an audience understands an enterprise, a product, or a person.  In addition to the self-scrutiny that is essential to this process, it is equally important to evaluate peers, to put self-evaluation in perspective, from the point of view of the groups or individuals who are must act or advocate on your behalf.        It is also critical to identify the issues or concerns they have, in terms of their own objectives, to understand how a relationship with you can be of mutual benefit, and what attributes you have that are most and least aligned with their goals.

A consequence of this kind of analysis is the opportunity to create the “current state” base line, and understand the gap between your view of your own attributes, accomplishments, and potential, and the way you are seen by others. This gap analysis then serves as a template for the development of: messages as a framework for communications;  planned communications initiatives; relationship building opportunities; alliances;  community collaborations; and other reputation management activities. 

But there must be a moment of clear self awareness, at the beginning, for any reputation management strategy to be effective.  

Reputation is often considered to be one thing, to be managed in total.  While a simple “all in” reputation may be achieved in either very negative or very positive situations, for a short time, most organizations and individuals are understood in a less clear, more dimensional way.   Up to 32 attributes can be examined to understand reputation, ranging from innovation, to financial strength, to management depth, reflecting the complexity of an organization’s or leader’s multiple relationships across many audiences, cultures, and locations.

One simple approach is to understand your reputation starts with a two axis model.

• One axis represents the visibility or degree of awareness an audience or influential person has of you .  This can be examined by up to 32 reputation attributes, or examined in aggregate.  Either way, without visibility, there is no reputation. This is often where self examination stops, and although an understanding of the awareness of an audience is important for setting strategy, it is insufficient.
• The second axis represents the accuracy of the image of your reputation attributes held by each audience or influential person, versus the ideal image you would like them to have.  Call this image optimization.

This is a functional way to address the frequent frustration of many senior executives and public individuals that they are not understood as they would like to be. 

So, visibility versus image optimization is a good test of the current and potential situation, and the kind of effort that may be required to address it. For example, visibility can be achieved through paid media, where brand messages can be delivered in a time or place that is certain, with carefully chosen words and images.  Or it may be more productive to develop relationships with experts or advocates who can raise awareness of a product, or a person, or the attributes of an organization (e.g., innovation, best place to start a career, committed to customer service, highly profitable,  etc.). 

That’s the reason organizations need to integrate marketing, corporate communications, employee engagement, and government relations planning.  It takes a village to create a reputation. 

But a village needs a chief, usually, or a council of elders.  In many organizations, the chief or those elders, have a lot on their minds.  Once the management team—or the public individual and those who advise him or her— get a more accurate view of how the organization is seen, they need a simple score card to track the progress of the reputation building process.

Here is a simplified “staging” system for reputation management that can be applied to most organizations.

November 16th, 2011 | Comment on this.

If you have some time, like a long international flight or a long weekend, here are two very different, intelligent, and insightful movies to watch back to back: Page One and Too Big to Fail.

Each recent film is both entertaining and somewhat frightening.  Page One describes in documentary form, the continuing importance of professional journalism through the lens (sorry, no cinematic pun intended) of the New York Times.  Despite the fundamental restructuring of modern professional journalism, there is no doubt that there will be an ongoing role for journalism, with standards and ethics, to tell the stories that cannot otherwise be told.  Too Big to Fail distills Andrew Ross Sorkin‘s book of the same name into a tense docudrama that shows how close the financial system came to collapse.  The Front Page isn’t about the financial crisis at all. And Too Big to Fail hardly mentions journalism, focusing instead on a debatably heroic portrait of government officials in the financial crisis. But taken together, they make the evolution and necessity of journalism very clear.

Both movies lead to the question of journalism’s future.   For example, how could anyone outside of the top echelons of high finance have understood what happened in the financial crisis without professional journalists to explain it as it unfolded.  The book version of Too Big to Fail is massive (almost Too Big to Read), and based on extensive reporting, some of which first informed news stories.  In the next financial crisis, will we prefer to just read the tweets and blogs of market professionals and individual investors heading for the exits?  Or unnamed sources flinging messages at the public, hoping for a suspension of disbelief?   Who other than professional journalists would have had the immediate role, the access, the capacity, and the platform to explain what was happening, and eventually, why. 

Yes, the media also fanned the flames, and failed to identify the weaknesses before the crisis. Many institutions and individuals share that blame.  And professional journalists miss many stories every day.  Sometimes it takes online posts from individuals to stimulate professional journalists to look into an event or issue.  So there is symbiosis in the evolution of journalism and society.  

But, without an unbiased, broad cross-section of professional media digging at the truth of the financial crisis, would the picture be as clear?  Yes, we could have waited for the Wikipedia community to build and edit the “financial crisis page.”  Would it be as clear, as soon, as the conclusion a reader can form from looking at three or four well-researched stories in one day from top professional news outlets?  Would the reader’s future risk be lower without those stories?  I have nothing against online, voluntary, crowd-sourced, first-person, grass-roots information gathering.  Professional news may not ever capture its immediacy and authenticity.  But what does amateur journalism really tell you—the meaning beyond the tweet or post or youtube upload?  You’re just never are going to know for sure.

There are many other examples of professional journalism’s role.   But  back to these two movies.  It’s interesting—perhaps no coincidence— that there is a common element between these them—the NY Times own story, and the role of the NY Times’ Andrew Ross Sorkin as the author of one of the financial crisis’ most comprehensive books, which the Too Big to Fail movie was based on. While it is only one professional news outlet, the Times and its staff are a highly symbolic and a good example.

At its heart, the process of objective, professional journalism is the creation of timely understanding.  Finding, digesting, analyzing, and presenting information that society needs to make sense of the world.  It’s the source for personal risk management, which is not a need that is receding.  The opposite is true.   We have more to understand and need more help understanding it.   Journalism is our machine for understanding.

Some people like to fantasize that the professional journalist is a dying breed, and that those of us who work with them are just dinosaur tenders.  I don’t think so.  

There is always going to be a profession of journalism.  It may take a different form, not be housed in for-profit entities, or not be free.  But most of the world needs what journalists do.  It’s time to stop pretending otherwise.  It’s not just wrong, it’s a dangerous fantasy.  Less objective, timely understanding of the world’s complexity means more risk. We don’t need fewer journalists.  Actually, we need more.

November 16th, 2011 | Comment on this.

Companies, I’ve got news for you. Managing your reputation isn’t that hard. Here is what you need to do. Just five points. There may be more, but these will always get you started in the right direction.
1. Be as visible as you need to be. You can’t have a relationship with a person or a group, or be important to them, if they don’t know who you are and what you stand for. The first step of reputation management is to maintain adequate awareness among your key audiences. And don’ just bazooka your information at them. Stay in a dialogue with the people who you need to motivate to act or advocate on the company’s behalf. In times of stress, be present, provide information, be quick, and be honest.
2. Think in terms of values, value and valuation. Have good values, and live up to them in decisions, actions, and relationships. Find out whether your organization’s decisions and priorities reflect your stated values. Find out whether the company’s values are the same as constituents’ values. Define the value that is created in each relationship. Make sure it is sufficient to support the valuation you want—whether that is product pricing, talent compensation, stock price, or some other valuation.
3. Be as you wish to appear to others. Invest in the attributes you want to be known for. Make sure the attributes matter to your key audiences, and communicate them. Be the company, or the person, you want your audiences to think you are.
4. Know what to say, to whom you need to say it, and when. Focus on those three simple criteria for communications. Don’t say anything that doesn’t fit that definition. Anything else is wasteful. But saying nothing at all is often a false economy. When in doubt, think of the relationship you want to create or maintain with the key audience. Think of a one to one conversation with someone in that key audience. What do you want them to say to othes about you? What are they saying now? What do they need to know to manage their own risk? When do they need to know it? Consider your values. In most situations, you are judged as much by what you don’t say, as by what you do say. Be economical, but don’t fail to say what needs to be said.
5. Say what you mean. Mean what you say. The global tolerance for corporate double talk is lower than ever. Hiding the message, hoping to be ignored when there is bad news, not following through on commitments–that may work with some of the people some of the time. But when they finally realize you ‘ve been trying to mislead them, or have said less than you need to, less often, those relationships are damaged or ended. You will lose reputation.
We hear a lot about transparency. It’s hard to make new commitments to be transparent. But controlling the time and place and context of information sharing is much easier if you maintain a stream of information and build good relationships with those who use it. Involuntary transparency occurs when someone else discloses something you want to be kept out of circulation, or you are force to do it at an unplanned time. That is often very painful and damaging. Leaks, rumors, new regulatory or political mandates are natural actions to fill a void. Like nature, your relationships abhor a vacuum.

November 16th, 2011 | Comment on this.
Tags: reputation; transparency

In this age of the social media Wild West where a company can spend significant resources responding to the endless chatter, it’s a healthy exercise to weigh what voices truly matter to your company’s reputation, and for that matter, to rank what issues directly affect your company’s reputation.  This preparation of identifying “sources of excellence” will help fight through the clutter when bad news strikes.

A good example of measuring the importance of one’s critics occurred during the recent launch of Apple’s iPhone 4.  Released on June 24th, the iPhone 4 received praise for the entire product experience, but faced criticism by some of its antenna.  On July 2nd, in an open letter to iPhone 4 users, Apple addressed the issue by focusing on a faulty signal strength display — “Upon investigation, we were stunned to find that the formula we use to calculate how many bars of signal strength to display is totally wrong” – and, in effect, the Company downplayed the antenna design as an industry-wide fact of life – “To start with, gripping almost any mobile phone in certain ways will reduce its reception by 1 or more bars.”

Ten days later, on July 12th, Consumer Reports came down hard against the iPhone 4:

“It’s official.  Consumer Reports’ engineers have just completed testing the iPhone 4, and have confirmed that there is a problem with its reception.  When your finger or hand touches a spot on the phone’s lower left side—an easy thing, especially for lefties—the signal can significantly degrade enough to cause you to lose your connection altogether if you’re in an area with a weak signal.  Due to this problem, we can’t recommend the iPhone 4.”

Cutting his vacation short in Hawaii, Steve Jobs returned to Apple’s headquarters in Cupertino to host a 30-minute talk followed by 45 minutes of Q&A with the press on July 16th.  While the conference had some of the signature elements of a wonderfully produced Apple product launch, and took the proper step to offer consumers a solution to the problem, it was certainly held under outside pressure to respond (particularly from the Consumer Reports recommendation to avoid the phone).

New York Times’ reporter, David Carr, writes in an article entitled Post-Mortem: No Hair Shirt for Steve Jobs:

“How did Consumer Reports make Apple blink?  In large measure, the article in Consumer Reports was devastating precisely because the magazine (and its Web site) are not part of the hot-headed digital press.  Although Gizmodo and other techie blogs had reached the same conclusions earlier, Consumer Reports made a noise that was heard beyond the Valley because it has a widely respected protocol of testing and old-world credibility.  Mr. Jobs acknowledged as much, saying: ‘We were stunned and upset and embarrassed by the Consumer Reports stuff, and the reason we didn’t say more is because we didn’t know enough.’”

David Carr continues:

“It was a big week for Consumer Reports and a reminder that media that is unsupported by advertising can often have an impact that more traditional publishing, or even the most tech-savvy, enterprises don’t.”

Whether ad-supported or not, there is still a premium on quality sources, and in the case of Consumer Reports, there’s an irony that a publication that began in the 1930s — before the onset of the Internet and even television — can prompt a corporate titan of the digital age like Apple to swiftly react.

By responding directly to a specific media outlet’s criticism, a company is validating that source.  Apple may have caught a break in focusing its response on the Consumer Reports criticism, as future product reviews will now carry more weight and be read more closely by Apple’s many followers.  And if Apple’s reputation for product innovation and quality weathers this slight bump in the road caused by the faulty antenna, the future noise coming from Consumer Reports will likely be positive and amplified.

July 28th, 2010 | Comment on this.
Tags: Apple · Consumer Reports · corporate reputation · crisis response

Typically, the reclassification of a country from emerging to developed market status by equity index providers (such as MSCI Barra) is a mixed blessing for the companies that are based there.

On the one hand, the recognition that the economy in which the company operates is “up there” with the United States, Western Europe, and Japan is a recognizable badge of honor and will create immediate demand from index funds.

On the other hand, if a country is judged sufficiently industrialized to join the major leagues, it means that it has been on top of the emerging market pile for a long time. As a result, almost overnight, a company based in the upgraded country will go from being a big fish in a small pond to being a small fish in a big pond. The transition can be painful, as I have recently witnessed in the case of the incumbent telephone operator in a nation receiving this honor. Instead of being benchmarked against companies that were lagging it in terms of performance and practices, the company suddenly found itself compared to companies with far better established operating and reporting procedures.

Company managements and Investor Relations teams need to prepare for this transition well ahead of time, by familiarizing themselves with the demands this new status will create, and by starting to establish contacts with their new followers. For example, on the sell-side, with the exception of a handful of truly global sectors (for example, the oil and pharmaceutical industries), it is not the same financial analyst who follows an emerging market company and its developed market competitor.

Recently, fellow ReputationPoint contributor, Peter Verrengia, and I were interviewed by Korea’s leading business newspaper – Maeil Business – in which we discussed this and other Investor Relations issues and trends facing this dynamic and successful economy. While MSCI Barra still categorizes South Korea as part of the MSCI Emerging Markets Index, it is likely on the path to be upgraded in the not-so-distant future, so that many Korean companies will need to prepare for an eventual transition to “developed” market status accordingly.

Here is a link to a more complete discussion of international investor relations for Korean companies, by us, on which the interview was based.

June 7th, 2010 | Comment on this.
Tags: investor relations · Korea

NOTE:  The following article, written in March 2010, was excerpted and published in the May 2010 issue of the Japanese magazine — Kohokaigi.

It will be many months before we can objectively assess the long-term impact of Toyota’s recall situation on the company’s reputation and its future success as a business.  For now, perceptions of the company’s communications approach undoubtedly are somewhat different in the US and in Japan.  Unfortunately, from any perspective, what began as a drama has turned into a crisis, which we define as an event or series of events that threaten the company’s ability to carry out its business strategy and achieve its goals.

From a reputation management perspective, Toyota’s main problem is that its understanding of the company’s obligations to the public were not aligned with the public’s perceptions of Toyota’s obligations.  This happened as a result of the company’s success, and the apparent ease with which the company became the icon of quality.  This is partially the fault of an approach to branding that oversimplified the hugely complex task of generating such exceptional results.

At some point in the past decade, among consumers, investors, policy makers, and influential business and academic leaders there was a fundamental shift.  Everyone began to think of Toyota not as a car company that makes a quality product, but as quality company that happens to make cars.  When quality became the product, and reputation became two-dimensional (quality and size), reputation risk began to increase.  Because reputation is an often unappreciated component of corporate value, this increase in reputation risk invisibly increased the overall risk profile of the company—just the opposite of the expected result of the company success. [Read more →]

May 18th, 2010 | Comment on this.
Tags: crisis management · reputation · Toyota

ReputationPoint contributor, Franz Paasche, participated in a recent discussion entitled “Financial Services Reform: What’s the Endgame?” offering his insights into the rebuilding of the industry’s tarnished reputation.

We invite you to listen to a recording of the 5/13/10 event accessible at this link: http://events.fleishmanhillard.com/financialservicesreform

Here is the full list of participants:

• Lionel Johnson, Senior Vice President, Fleishman-Hillard, former Deputy Assistant Secretary for the Treasury

• Jack Bartling, Consultant, former Deputy Assistant Secretary of the Treasury for Legislative Affairs, and former Legislative Counsel to Sen. Christopher Bond (R-MO)

• Emily Altman, Consultant, former Managing Director, Head of International Government Affairs, JPMorgan Chase and Morgan Stanley

• Franz Paasche, Partner, Communications Consulting Worldwide (CCW)

May 18th, 2010 | Comment on this.
Tags: financial services · reform · reputation · webinar

Frank Koller’s recently-released business book entitled Spark. How Old-Fashioned Values Drive a Twenty-First-Century Corporation: Lessons from Lincoln Electric’s Unique Guaranteed Employment Program explores a topic we seldom read about in today’s headlines – a public company that has been productive while staying true to the value of retaining its workforce through good times and bad.

For over 110 years, Lincoln Electric has been a successful manufacturing company of welding devices.  Based in Cleveland, the company has consistently retained its position as the leading global manufacturer of welding equipment without resorting to layoffs at its main facility in the U.S. [Read more →]

April 3rd, 2010 | Comment on this.
Tags: Frank Koller · labor relations · layoffs · Lincoln Electric

If you want to follow an emerging issue in reputation management, the growing conflict at the intersection of business interests and privacy rights is ripe for some drama.  Those who manage the reputation of an organization, or who care about how reputations of individuals are formed, online and offline, should take note.

The implications of paying for digital information and social media services by sharing details about online habits, interests, and relationships is neatly summed up in the March 1 edition of the US version of Newsweek, by columnist Daniel Lyons.  His excellent one-page summary of privacy as currency ( “Google’s Orwell Moment”) describes the intergenerational and cross-cultural concerns presented by online business models that openly gather information from participants and turn that information into revenue.

Many people are just becoming aware of this issue.  So far, the internal debate many people are having about the value of their privacy resembles the signature comedy bit from 50 years ago by Jack Benny.  Benny, in his cheapskate persona, is held up at gunpoint by a criminal who says, “Your money, or your life.”  After a long pause, Benny says, “I’m thinking, I’m thinking.”

When it comes to the value of privacy as currency, many of us are saying, “I’m thinking, I’m thinking.” [Read more →]

March 9th, 2010 | 1 Comment
Tags: Facebook · Google · privacy · reputation

Yelp.com, the popular user-written reviews and ratings site of local businesses, has been hit with a class action suit filed on February 23, 2010 claiming extortion.  The suit reads:  “One method Yelp uses to control content (and thereby raise or lower a business’s rating), is to promise to remove a business’s negative review or relocate them to the bottom of a listing page where fewer searchers will read them if the business agrees to purchase a costly monthly advertising subscription from Yelp.”  One could say that Yelp is now faced with the difficult challenge of moving its own negative review “to the bottom of the page.”

Yelp.com is no stranger to butting heads with the small businesses that are subject to its consumer reviews.  You don’t have to search far for www.yelplawsuit.com as well as www.yelp-sucks.com  (yelpsucks.com is already taken by Yelp.com).  Even the Common Questions section of the Yelp company web site includes the following:  “I’m considering legal action against a review and/or Yelp.  What are the precedents here?”   [Read more →]

March 2nd, 2010 | Comment on this.
Tags: litigation · transparency · trust