The Reputation Stumble Rate Stumbles

Weber Shandwick’s annual calculation of reputation loss – the “stumble rate” – finds the lowest rate of reputation leadership loss since we began tracking this rate in 2010. During 2013, fewer than four in 10 of the world’s largest companies lost their esteemed status as their industries’ #1 most admired company during 2013. This is good news.

Each year Weber Shandwick measures the rate at which companies lose their #1 most admired position in their respective industries on the Fortune World’s Most Admired Companies survey. We call this the stumble rate. Between 2013 and 2014, 35% of the world’s largest companies experienced a stumble, down from last year’s 46%. For those companies that fell from their perches, there is likely extensive introspection and remedial action plans being discussed as I write this post.

The good news is the non-stumble rate of 65%. This means that about two-thirds of the industries in the Most Admired survey boast companies with durable reputations.

 

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In addition to calculating the stumble rate, we also dig through the data, including the nine drivers of reputation, to glean some interesting insights about stumblers and non-stumblers. A stumbler is an industry whose top company last year is no longer the top company this year. What is interesting this year?

  • 19 industries (out of nearly 60, give or take depending on the year) have never had a stumbler since we started monitoring the stumble rate in 2010. The most admired companies in these industries have been stalwarts of reputation: Automotive Retailing, Building, Materials-Glass, Computer Peripherals, Consumer Food Products, Electric & Gas Utilities, Electronics, Entertainment, Household & Personal Products, Property & Casualty Insurance, Internet Services & Retailing, Metal Products, Mining, Crude Oil Production, Oil & Gas Equipment Services, Pipelines, Newspapers & Magazines Publishing, Railroads, Semiconductors, Diversified Retailers, Food & Grocery Wholesalers.
  • Two industries stumbled for the first time during 2013: Information Technology Services  and Office Equipment & Electronics Wholesalers. This must hurt.
  • The Energy industry is a chronic stumbler. No Energy company has been able to hold the #1 spot for consecutive years.  In the course of six years, there have been five different Energy leaders.
  • Five industries have stumbled four times since 2010. The most volatile industries are: Airlines, Life & Health Insurance, Medical Equipment, Motor Vehicle Parts and Health Care Wholesalers.
  • Six industries have a first-ever number one: Diversified Outsourcing Services, Food Production Information Technology Services, Medical Equipment, Mega Banks and Electronics and Office Equipment. Interestingly, the new leader in Medical Equipment is also new to the industry, having ranked #3 last year in Pharmaceuticals. This probably has to do with a change in their business mix.
  • For most of the stumblers, the People Management driver declined. The biggest drops in People Management (one of the nine drivers) were in Mega Banks (-3 ranking positions) and in Soaps and Cosmetics (also -3 spots).  In 2013, the Mega Banks stumbler experienced a crisis-riddled year that pointed to lack of leadership oversight of personnel.
    • The Soaps and Cosmetics stumbler decline might not be reflection of its own management troubles, but rather strides made by the competitors.  In one case, a well-respected CEO came out of retirement to replace his successor on an interim basis. One of his top priorities is to prepare a lineup of executives who will eventually replace him.
    • The other competitor announced – shortly before the Fortune survey was distributed to respondents – it was rolling out a supply chain collaboration platform to make its manufacturing more responsive to shifting customer tastes. This agile manufacturing process is expected to help add 1 billion new customers.

 

 

 

 

 

 

Reputation Leaders as Weathermen

I found some research from Reputation Institute that I missed from last fall. My fault entirely and probably because I was nearing the end of the last quarter and work was more busy than ever. RI conducted interviews with 300 executives at leading companies around the world on their reputation journeys. Some of the findings are compelling and worth repeating -- 79% agree that we are competing in a reputation economy (where who you are matters more than what you produce -- nicely said) and only 20% say they are taking advantage of the opportunities open to them to manage their reputations better. 

A few quotes jumped out of me and I wanted to blog about specifically. One was from the head of global corporate reputation and responsibility at Telefonica. In the report, Alberto Andreu Pinnillos describes his team's role similar to that of a bomb squad. That made me chuckle in recognition. That's how it does feel to be on a team dedicated to understanding and protecting reputation today -- first responders, SWAT teams, terrorist attacks, detection of threats, disposal of threats, disarming of threats, scenario planning, media monitoring and so forth. Another analogy is used in the report -- reputation managers are akin to being meteorologists where you and your company are warning about or communicating exposure to extreme weather and the threats of hurricanes, tornadoes, earthquakes, tsunamis, high winds, turbulent seas and more coming at you full force. Earlier this morning I was reading about Target and the firestorm they've experienced over the hacking of customer credit card information. To them, the data hacking and breach is understandably a tsunami of woes. And, without a doubt, this is just the tip of the iceberg because other retailers will soon be revealed. That saying about everyone will experience their 15 minutes of fame and also their 15 minutes of shame is so true. 

The other quote that struck me and I wanted to share here was from the corporate VP for communications at Novo Nordisk who said the following: "I started out as a media relations officer, but today, if you look at how much time I'm in direct contact with the media, it's roughly 5% of my time, and I don't think it should be more." That is indicative of how public relations and communications have changed over the past few years. There is an explosion of stakeholders that must be cared for, listened to and tended to -- from investors, employees, NGOs, bloggers, influencers, patients, community and civic leaders, consumers, Tweeters, regulators, activists, and more. 

Worth sharing on a non-snowy Sunday (for a change).  

how to build a reputation for thought leadership

The term "thought leadership" has become ubiquitous. I confess to being guilty of using the buzzword. I call myself a thought leader and tell people who ask what I do that I do thought leadership for a living. People seem to understand but I might just be talking to people in my industry or perhaps to the overly-polite. Years ago I defined "thought leadership" when I wrote a book about the importance of building CEO reputation by having something to say about the future instead of talking about your company's products. Fast forward to today and thought leadership is now morphing into content marketing. I like to think, however, that thought leadership is the better half of content marketing. Much of content marketing today is pushing out talk about your company and all the great things it is doing without thinking about whether it is new, interesting, useful, relevant and compelling. Building a reputation for thought leadership is about ideas that keep a company at the forefront of change. It should transcend sectors and geographic borders. It should...

  1. Enrich the company’s relationships with its key constituencies:  clients, prospective clients, opinion leaders, recruits, internal audiences, employees, media
  2. Make the world aware of new insights
  3. Build, support and sustain the company’s brand reputation
  4. Influence the industry agenda and own significant elements of it
  5. Be strongly identified with the future

Defining thought leadership is the subject of Michael Brenner's article in Forbes this week. Brenner is Vice President of SAP Global Marketing. His definition is as follows: "Thought Leadership is simply about becoming an authority on relevant topics by delivering the answers to the biggest questions on the minds of your target audience." He makes a good point in that great thought leadership comes from answering your customers' biggest questions. However, sometimes good ideas come from looking sideways or at where no one else is looking. I call it catching the wave. It is about catching the wave or the idea before it crests. Seeing the kernel of an idea when it is just emerging and not yet at its peak. Those provide the best content.

Here are Brenner's pointers for creating thought leadership from his thoughtful article on thought leadership. I found them very useful and will add to my deck on building a reputation for thought leadership (giving him credit of course):

  1. Identify the questions customers are asking. Prioritize them.
  2. Answer those questions across multiple formats and channels.
  3. "Give to get." In other words, don't make it hard to access.
  4. Make it interesting. Enjoyed his comment that thought leadership should have a "return on interesting."
  5. Invite customers to participate. Ask them to help you curate and produce great storytelling.

Vulnerability as a CEO Asset

Someone recently said something to me that had me thinking. They were describing a CEO and said that they were amazed how willing he was to show his vulnerabilities. Leadership humility is very attractive these days because so many CEOs and leaders are being cut down to size as events careen out of control around them. A recent article in the Guardian echoed this same sentiment although the writer, Lynnette McIntire, referred to this trait as “humanity,” not humility. She says:  “But the most persuasive CEOs are those who show how their personalities, histories, values and feelings are aligned with company culture. I have been charmed and disarmed when CEOs talk about what they've learned from their children, how a mentor changed their lives, how a hard lesson from life knocked them into gear or how a frank comment by an employee reset a decision.” McIntire struck a chord with the examples she gave. One was about Tom’s Shoes which has a business model of “buy one, give one” whereby a free pair is given to children in need when a customer buys a pair. She pointed out how the CEO, Blake Mycoskie, spoke about how unprepared he was for the criticism the company received about providing free shoes. People were criticizing how this policy was hurting local shoe producers. Tom’s Shoes is now committing to having a proportion of these giving shoes made in Haiti. She also wrote: “Now, Tom's giveaway programs have a shoe replacement component, dispelling the in-and-out charitable giving image. For many children having black shoes – a school uniform requirement – means their education is not interrupted when their feet grow.” All very interesting to me because I did not realize that Tom’s Shoes’ reputation was being bruised by these criticisms. But also how the CEO listened, learned and began reshaping policy. And how the entire lesson made the CEO appear more human,vulnerable and teachable. [I should add that I also was pleased that they quoted our research on CEO reputation.]

Obama's small step repair strategy

Leadership is very messy. I was asked the other night at dinner why President Obama was not coming out slinging on the repair of the healthcare website. Why was he not saying anything? And why were his advisors not telling him to speak up and put a stop to the constant naysaying? Well, for one, I think the reason is that there is nothing to say until it is fixed.  He apologized and put a bookend on the mess for now. That was the right strategy. Now he should say nothing until it has been resolved. Why keep it in the headlines by saying something? No one wants another BP oil spill where the headlines went on for weeks regarding how much oil was spilling into the Gulf. I read the New York Times columnist Bill Keller's to-do list for President Obama on how tosalvage his reputation now that it has stalled. Keller basically says that now is not the time for "grand new initiatives."  True. He goes on to say, " It’s not that I want the president to think small; by all means, address the threat of climate catastrophe and push ahead on early childhood education. But he needs to get a few wins on the scoreboard."  Absolutely. Now is not the time for the big speeches, big sweeping initiatives, big words. Now is the time for small, incremental steps that change the conversation and get him back on track. I also found it interesting that Michelle Obama chose this time to release news that she is going to focus on higher education for low-income students. Clearly, a great policy decision but the timing is not coincidental. The White House needs some positive news to overshadow the constant barrage of negative sentiment surrounding the White House. Everyone loves Michelle and who can argue with her for coming to the rescue. Wonder if we will be seeing more of the kids now.

However, this too shall pass. Maybe we should spend more time focusing on the devastation in the Phillipines and what we can do.

CEO positioning via live media

bigstock-Press-Conference-Vector--2139053 CEO reputation is still incredibly important. As I have always said, it's nice to say that it should not be so important or to say that it is should be more about the company than the CEO,  but ultimately the CEO sets the tone, style and destiny of a company. A recent survey of top communications officres in Europe confirms the uber-importance of the CEO to a company's success. What I found most interesting, however, were the findings on CEOs and communications. Considering that these are communications officers, the study has some good inside info on CEO activity:

  • 83% said that their communications teams are working on positioning their CEO
  • 67% are working on the CEO's profile (probably online) and a CEO-focused communications strategy

One of the more interesting articles I have read recently describes how the conference business is surging and providing better outlets for CEOs and other executives to speak. All this "live media" or "live journalism" (what it is now being called since you can repurpose it, livestream it, twitter it, YouTube it, etc) is perfect for positioning CEOs (reflecting the findings above) and other top executives you want to shine a light on. Weber Shandwick has a thriving business run by Carol Ballock helping CEOs and top executives find the right platforms to speak at and helping shape content. Our research on the best conferences has finally put some metrics behind this burgeoning phenomenon. Here are a few examples if you don't believe me. The Huffington Post is hosting three conferences of Arianna Huffington's marvelous Third Metric idea, Atlantic Media now does over 200 events per year including exclusive dinners and week long conferences. The New York Times is convening 16 conferences in 2013, up from one last year. The Wall Street Journal is hosting its 6th CEO Council. Tina Brown left the Daily Beast to get into the conference business. Many of these conferences, including Fortune's Most Powerful Women in Business,  are expanding overseas too.  Digital media companies are also hosting live events that help position executives, pundits and influencers. It is a gold rush. As the New York Times says, "Live events promote their brand" and "..conference centers are considered just another social platform with Twitter, Facebook and online video."

All aboard.

 

 

Paying it forward.....

401-drive-thru-open-right-arrow 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!