Reputation recovery, an inch at a time

Thought that this comment summed up reputation recovery. In an article on the whole NFL issue and the Commissioner's press conference last week, someone said: "Football is a game of inches. And that is how the NFL can restore its reputation – one hard fought inch at a time."

Absolutely the truth. Reputation recovery is all about incremental steps to restoration.

Reading to lead

In a review of the McKinsey article on Management for the Next 50 Years, The Economist Schumpeter column had something particularly smart to say (as always).  Although they concede that machines can do a better job of data analysis and synthesis, they point out that executives can do some things better than machines. First, they can inspire and motivate employees and second, they can create "game-changing" ideas or valuable thought leadership. Then they quote Tom Peters, the author of In Search of Excellence and management guru, on the future of leadership. Peters said that the best future leaders will "spend half their time reading books." Hold that thought. It's a powerful idea. With all the data and information targeting us, no one can remember which way is up. The best way to learn and lead by reading is powerful. Because it is so hard to do and hard to find the time, it will be the answer to truly leading companies in the future. Machines can not do that for us.

Social Blogging for Fortune 500 Companies

There has been a lot lately about social CEOs and I have recently posted about the topic. Last night, I just had a chance to review the annual University of Massachusetts Dartmouth Center for Marketing Research study about how the Fortune 500 is using this not so new but ubiquitous medium and blogging, in particular. As the authors say, and I agree, "studying their adoption and use of social media blogs offers important insights into the future of commerce." The key findings are that Fortune 500 blogs are alive and well and serving as a means to promote thought leadership:

  • In 2014, 31% of the studied companies had corporate blogs, showing a slight decrease of 3% in use of this tool in the past year
  • In the 2011 Fortune 500 study, it called attention to the decline of blogging with only 23% hosting a public-facing corporate blog.  In 2012, there was a sizable increase to 28%. That surge surfaced again in 2013 showing 34% of these corporate behemoths creating and sharing content through blogs
  • The top 200 of the Fortune 500 are out-blogging the bottom 200  
  • These Fortune 500 blogs are for the most part (78%) are interactive, up-to-date, taking comments, offering RSS feeds and subscriptions. 

What is particularly interesting here is that corporate blogging is here to stay and has become a relevant means of content-sharing and thought leadership. It provides a smart delivery vehicle to talk about what a company stands for, what's on the minds of its customers, what its products and services can do and what's new and innovative in the field. And the authors agree that we might view this steadiness of corporate blogging as a signal to the marketplace that the time is ripe for thought leadership and in-depth content instead of short missives and pure promotional content that is less memorable. At Weber Shandwick, we see this in the high demand for Mediaco, a platform that helps companies publish and be their own media companies.

I see a surge in thought leadership being tied to the ongoing effectiveness of corporate blogging where ideas and insights can now be more easily shared with the general populace. And I believe that when companies blog on their websites or elsewhere, it leads to greater control over communications and their reputation. Companies can now join the conversation instead of just reacting to the conversation. Reputations have a better chance of stabilizing themselves when they have a hand in the dialogue. A good thing. 

Company behind the Brand

The Company behind the Brand. There has been a great deal of interest in the concept of the parent or master brand and its relationship to its product brands over the past few years. The research we did recently on this topic put a stake in the ground by declaring that the two are interdependent and the parent brand was no longer the stepchild of the product brand. A recent article in Hindu BusinessLine asked the question of how companies would know if they were over-investing in the corporate brand at the expense of the product brand. The author Rajeev Batra, professor of Marketing at the Stephen M Ross School of Business at the University of Michigan, says there are six situations where it makes sense to invest more in the parent than the product brand and four situations when it makes less sense.

Makes Sense to Invest in the Corporate Brand

1. When it comes to cross-selling -- it makes sense if you want the consumer to buy another one of your products and the parent brand provides assurance that it is a wise choice. Using a P&G example, the author says: "The logic is that if the average US household which currently buys five P&G products can be induced to buying a sixth by virtue of it being a P&G product, it will lead to a 16 per cent increase in sales."

2. When it comes to high risk -- your consumer might not know who you are and they wonder if they are taking a risk by selecting your product or service? The parent brand acts as a guarantee that they they are in good hands by selecting your product. High risk selections might occur when selecting an airline, a bank, pharmaceutical or medical procedure. 

3. When it comes to social issues -- your company wants to attract a segment of customers who already care about particular social issues such as sustainability, obesity, etc. and you want to guarantee that your parent brand is having a decided impact on society and the environment. What your company says and does about social issues matters increasingly today in product consideration.

4. When it comes to brand extensions -- if your company wants to introduce a new product or extend the products it already has, the parent company can make that happen more easily by adding its reputational luster to the extension.

5. When it comes to having a positive rub-off -- the halo from the parent brand can often work magic on a product brand.  Consumers who see a corporate brand as standing for high quality, integrity and transparency make the leap in their heads that the products are made with the same attention to intangibles.

6. When it comes to reputation overall -- having a good reputation can help a company recover faster after a crisis or mishap. Investing in a company's good name now has tangible benefits, especially when you might need it tomorrow.

Batra also lists four situations where it might not make sense to spend your dollars on the corporate brand at the expense of the product brand.

Makes Less Sense to Invest in the Corporate Brand

1. When it comes to appealing to many diverse consumer segments that sometimes clash or conflict with each other. As he says, this is the House of Brands concept where each product brand might do better standing alone. For example, If a company's product brand appeals to less healthy eating behavior for teens and another company product appeals to an organic ingredients offering, it might not make sense to overinvest in the corporate brand. Let's just say it is hard to imagine Disney having a high risk theme park in addition to its parent-friendly ones and trying to position the Disney brand well under those circumstances.

2. When the corporate brand image is too broad and diffuse that it is not distinctive enough. We have all seen examples of companies that communicate empty and meaningless promises. The intense focus on innovation in recent years where many companies are calling themselves the most innovative ones in the world has baffled me.

3. When the meaning given to the parent brand is not relevant to the consumers it is trying to capture. Yes, sometimes companies miss the mark.

4.. When the corporate brand positioning is not believable and invites skepticism. This is the example we are all familiar with when a company says one thing (i.e., societal- or environmentally-wise) and behaves to the contrary. Do I dare say BP.

The four examples Batra gives as to why investing in the corporate brand might not be an efficient use of resources are quite valid.  However, my belief is that if investment in the corporate brand is done right, it nearly always pays off and can actually provide the necessary filter for leaders to make better decisions about what products should be invested in or what acquisitions to make. There is no reason why companies should not be able to identify their relevance to all customers, even if their products vary. Narrowing down that corporate positioning to its core essence is what companies are supposed to do to build enduring reputations that last. Understanding what your company stands for is more critical than ever and the corporate brand reputation should serve for something all encompassing that guides customers and inspires employees. Research is important in helping deter companies from marching off in the wrong direction.  In a world where the Internet is at everyone's finger tips and word of mouth is all around us, it makes perfect sense to build the corporate brand so that it is infused with meaning that matters to all its brands. 

 

How Leadership Shapes Crisis

Andrew Hill of the Financial Times recently wrote about managing crises and how all the planning required today cannot suffice when a situation is beyond catastrophic. He uses lessons learned from a second site in Japan that was equally overcome by the earthquake and subsequent tsunami that hit the island in March 2011 as the Fukushima nuclear reactors. Hill says, "managing in a crisis is not just about planning."

He cites an article in Harvard Business Review about how a sister plant of Fukushima Daiichi dealt with similar events to their nuclear reactors after the disastrous tsunami reached them. At this second plant, three of the four reactors lacked the power to run the necessary cooling systems after the waves knocked them out. Nothing prepared the site superintendent and his team for what was happening. As events spun out of control, the site superintendent took to the whiteboard and wrote down what the team knew and didn't know. He turned incidents into data by writing on a whiteboard the frequency and magnitude of the aftershocks in the hope that it would show that they were decreasing. He soon saw that this was not the case. But by using the whiteboard, the superintendent and his team collectively were able to make sense of the senseless and the unknowable. The superintendent also forced himself not to supply answers or try to reduce uncertainty for his team by pretending he had a plan when everyone was shaken to the core wondering if their family members were alive or if they'd make it out alive altogether. The use of the whiteboard fascinated me because it became a mechanism to control the chaos. It became a personal self-organizing system to ward off crippling ambiguity and a way to replace uncertainty with facts, even if they were not what he wanted them to be. Because the team faced the threat of a radioactive breach if they could not rig up a cooling system in time, his whiteboard writings of events and numbers exposed patterns to the madness and most probably, helped the team feel that they were making sense out of fear.  At one point, the superintendent returned to his whiteboard and "ordered a subordinate to write up the overall picture of the plant and an outline of the recovery strategy. He was determined to share information with his workers as it became available, slowly replacing uncertainty with meaning."

The article is a good reminder that crisis response is shaped by leaders in unimaginable ways. Reputations are built on the large and small ways we respond.