Saving your reputation

I am always looking for quotes and just found two today. They appeared in an article in The Guardian about how charities or non-profits can manage crises. Here they are:

"The 17th century bishop Joseph Hall shrewdly noted that 'a reputation once broken may be repaired, but the world will always keep their eyes on where the cracks were.'"

"Brand is a promise to your stakeholders. It embodies what you want them to believe about you. Reputation, on the other hand, belongs to them. In short: brand is how you talk to the world, reputation is how the world hears you."  Vicky Browning, director of CharityComms

The article was based on a panel held in London and the key advice about managing a media crisis for charities who are caught up in the public glare when crisis strikes:

  1. Understand your risks
  2. Respond proportionally to the intensity of the crisis
  3. Be prepared
  4. Know what you can control and what you can't 
  5. Monitor and measure perceptions
  6. Become the expert and authoritative source on the issue 
  7. Respond quickly and with sensitivity (empathy!)
  8. Involve your employees, keep them informed
  9. Invest in reputation before you need it
  10. Stick to your messages

These reputation remedies could apply to any crisis -- be it a for-profit or non-profit. The one that struck me as an interesting nuance which I had not thought about in a while was reacting in proportion to the crisis event. Sometimes just a statement on a website will suffice whereas sometimes the CEO needs to call a press conference and provide regular updates. Knowing when the CEO should visit the site of a crisis and when not to requires good judgement and good counsel from crisis experts. Over-reaction can intensify a problem.

The nature of the response reminds me of an incident that occurred this week. Chairman Rupert Murdoch of 21st Century Fox made an $80 billion takeover bid for Time Warner and Time Warner's CEO Jeffrey Bewkes responded. Instead of a media statement, no comment, CEO email or other response, he chose to produce a three minute video directed at his employees using the medium that the company has excelled in during the past few years -- digital media. The video begins with “Hi everyone. I wanted to speak directly to you about the news you’ve been hearing today about our company.” Short and simple and appropriate to the situation. Here's an example of taking control of what you can when your company is in the public eye. Bewkes got his points across, took little time out of employees and other stakeholders' time and was personal, conversational and direct. In a way, he discounted (dissed?) the takeover bid by appearing on the small screen. Good choice. 


Reputation lessons from space

For those of you interested in crisis, this article on the tragic Challenger and Columbia space shuttles is a reminder of how things can easily go wrong. Even for the best and most revered of organizations. NASA’s reputation never truly recovered from these failures.  We have come to learn, even from pre-Internet days, that the tiniest link or problem can cause the greatest of catastrophes. The article cited the theory of  “normalization of deviance “ from Diane Vaughan, a sociologist, who was on the commission investigating the 2003 Columbia disaster. When I was writing my book on reputation recovery, I read many of her articles about the 1986 Challenger disaster and how some risks became accepted as part of how business gets done. People just get used to or should I say immune to risk-taking.  Vaughan uses the example from the Challenger where the O rings’ erosion had been known on earlier launches of spacecraft and simply became routine, hence the normalization of deviance. As Vaughan says, “They applied all the usual rules in a situation where the usual rules didn’t apply.”

The challenge for companies is figuring out how to not become immune to the everyday risks that go with doing certain jobs such as in manufacturing, food and beverages, pharmaceuticals, automotive, mining, oil, just about everything if you start listing them out like I am doing. This brought to mind what it must be like working on oil rigs and how the risks to safety are there each and every day. How the most minor short cut turn on a dime to be the final blow. How do companies train their employees to not take minor glitches for granted – lives and reputations could be at stake if they ever so slightly deviate.  Another question to ask is how do companies make sure that they listen hard to grumblings from employees? Maybe there is a kernel of truth to be had. Perhaps companies need a Bad News Officer who is Mr or Ms Gloom and Doom. That person could be responsible for bringing all the bad news that no one wants to hear or tell and put it on display for leaders to cope with. The hard truth might be tough to hear but the least expensive way to run a company, maybe even save lives.

 

Compliments for reputation-building

There are many ways to rebuild reputation but one way that companies might consider when recovering from a crisis is developing a Compliments page where employees and non-employees can anonymously thank those front line or other employees for doing their jobs well and conscientiously. I spoke to a company a short while ago as they were dealing with a reputation crisis and suggested that they start a Compliments page where community members could thank those front line people they encounter frequently for doing a honest day's work. It could help. Of course, the site would attract uncivil types but there must be a way to delete them if they stray too far from the site's purpose and goals.

Some universities have being doing this for a while. It started at Queen's University in Ontario because the founders wanted to find a way to counteract bullying. University of Pennsylvania has a Compliments Facebook page as does Penn State. On the U of P site, people thank others for returning their lost wallet, for the sense of accomplishment they feel after doing nonprofit work, to a capella group for their beautiful sound and send support to a fellow classmate struggling with pain. The U of P Compliments page has the goal of "learning to do good and spread good." Penn State's site says that it is a social project to spread happiness.

Compliments pages are a wonderful idea considering that incivility that can sometimes surround and engulf us. In Weber Shandwick's Civility in America 2013 study, we found that 70 percent of Americans believe incivility has reached crisis proportions. With Americans encountering incivility more than twice a day on average (2.4 times per day), and 43 percent expecting to experience incivility in the next 24 hours, dealing with incivility has become a way of life for many. Maybe it is time to turn this tide of negativity.

Compliment sites can be contagious and make people feel good despite their company's blemished reputation. It could give an employee that extra boost they need to be productive and positive when they find everything uncertain. Hearing a compliment might keep an employee loyal to his or her company and make them feel they are doing their part in getting their company's reputation back on its feet. Companies might consider trying this and seeing what happens. Reputations get repaired in the oddest ways.

Politicizing reputation

starbucks-appreciation-day  

 

 

 

One of the trends I talk about when it comes to reputation is how politics is no longer a strange bedfellow to companies.  Companies and their leaders now find themselves taking sides on climate change, same-sex marriage, immigration, gun control and a host of other issues. Company reputation is far more politicized that it used to be. Years ago when I first got into public relations, it was made very clear to me that companies did not air their political leanings or take sides on political issues. Today, political issues are now the business of business.

That is why I was particularly interested in an article about a Starbucks in Newton Connecticut.  I copied and pasted the newspaper photograph into a powerpoint slide for safekeeping. I'll want to be able to remind myself when I need a good example of how politicized reputation has become and how tricky it is to walk a fine line.

Nothing is ever simple these days when companies live in glass houses. There's always two sides to every coin. Here's a snapshot of what happened. Two days ago, gunowners declared Friday "Starbucks Appreciation Day." Unfortunately, this nationwide Appreciation Day was also being celebrated at a Starbucks in Newton, Connecticut, home to the mass killing of some two dozen children and teachers. Why appreciation day for Starbucks? Reason is that Starbucks has publically supported the Second Amendment in states where it is allowed and which grants people the right to keep and bear arms whether those guns are carried in public spaces such as the ubiquitous coffee chain or not.  However, because of the glaring sensitivities surrounding the hideous Sandy Hook killings, Starbucks found themselves at ground zero for pro- and anti-gun supporters even though gun carrying is allowed in Connecticut.

What did they do? At the Newton Starbucks, they closed the store five hours early and put up this sign:

Dear Customers,

At Starbucks we are proud that our stores serve as gathering places for thousands of communities across the country and we appreciate that our customers share diverse points of view on issues that matter to them. We also believe in being sensitive to each community we serve.

Today, advocacy groups from different sides of the open carry debate announced plans to visit our Newtown, Connecticut store to bring attention to their points of view. We recognize that there is significant and genuine passion surrounding this topic, however out of respect for Newtown and everything the community has been through we decided to close our store early before the event started. Starbucks did not endorse or sponsor the event. We continue to encourage customers and advocacy groups from all sides of the debate to contact their elected officials, who make the open carry laws that our company follows. Our long-standing approach to this topic has been to comply with local laws and statutes in the communities we serve.

Thank you for your understanding and respect for the Newtown community.

Sincerely,

Chris Carr

executive vice president, U.S. Retail

For Starbucks, there's no winning on this issue but I respect the fact that they behaved according to their conscience and in line with their corporate character . I also was impressed that the EVP of US Retail signed his name to the letter. There was no darting the issues. However, I think it is important to recognize that company reputations will find themselves regularly tangling with political issues and they need to shape their reputations with that in mind.

Toronto Musings

201Had a terrific visit to Weber Shandwick Toronto this week. My colleagues hosted a breakfast to discuss the new rules of engagement for employee engagement and reputation and I shared the platform with my colleague Kate. We met some terrific clients and had some very good questions afterwards, always a plus. Reputation and employee engagement are very much intertwined which made the two angles so easily compatible. We also met with some clients and had meaningful discussions about leadership, character and reputation. Afterwards I headed up to Muskoka for a conference among hydro distributors to talk about safeguarding reputation. Terrific conference put on by The MEARIE Group and to prepare, I learned alot about the challenges facing electricity distributors in Ontario. Of course, it was hard not to mention how Mayor Rob Ford of Toronto was negatively impacting the city's reputation. On the day of the conference, the Mayor of Montreal resigned after being arrested. At the breakfast meeting, I learned something that I aim to keep for posterity. Most probably, I will add it to our compendium on how to recover from a crisis. We have a master deck on how companies recover and build even better reputations and for me, it's my team's Bible. We catalogue all the recovery strategies we can because it always comes in helpful for the next client. But sometimes people have a way of saying something that just lights up your brain waves because it is so insightful and speaks so directly to a company's character. This Canadian company had a crisis some years ago and one year later to the day, they ran full page ads reminding people of what happened and what they had done since the fateful event. The head of comms said to us while we were chatting at the breakfast that they ran the ad because..." "We will be the first to remember, not the first to forget." The company wholeheartedly owned the crisis and was not going to forget. Sage advice.

Reputation-driven bonuses

bonusHow is this for a headline from Bloomberg: Goldman Sachs Links Bonuses to Protecting Firm Reputation. I like it. Apparently Goldman Sachs is reviewing employees’ efforts annually to protect its reputation and build back clients’ trust. Makes total sense to me as a reputation observer.

In May, the company issued a report titled the “Business Standards Committee Impact Report” which laid out 39 recommendations. The report says it was the most extensive review of  the firm's business standards in its 144 years.  The CEO, Lloyd Blankfein, led 23 three-hour sessions in 2011 and 2012 with partners and managing directors on personal accountability and included a case study about communications within the firm and with clients, according to the report. It  represented "tens  of  thousands  of  hours  of  discussion,  analysis,  planning,  execution,  and,  importantly, training and professional development which, alone, totaled approximately 100,000 hours.  The BSC held 17  formal committee meetings.   The Board Committee overseeing  the BSC met 13 times.  The  BSC  Implementation  Oversight  Group  held  11  meetings  and  made  five presentations to the Board of Directors.  It also met three times with a separate subcommittee of the  Board’s  Corporate  Governance  and  Nominating  Committee  which  provided  ongoing oversight of the BSC implementation." They also identified three themes that reached across all the recommendations and one of them was "reputational sensitivity and awareness and its importance in everything we do."

Because I regularly report on how companies recover from reputaional loss, I thought it was important to readers to hear about how one company was finding its way after its reputation was hurt. This report probably represents a good roadmap for other companies that want to strengthen their business practices and reputation. It is also important to note that the CEO has played a major role in getting the committee's findings infused into the organization.

Social listening as reputation recovery

jcplistens-cover-photoI had heard of a new CEO listening tour but to me, this was a first. JCPenny is running a social media Apology tour. We've all heard CEOs apologize for one thing or another and we've all worked in companies where a new CEO visits different employee facilities to meet and greet and hear what is on people's minds. But JCPenny now has a new campaign on TV that apologizes for letting customers down and thanks them for coming back. If you recall, the former CEO Ron Johnson from Apple fame was booted out when his plan failed, possibly because of the elimination of coupons which drove customers into the store. The former CEO, Myron Ullman, was asked to return and now they are in recovery mode. The two ads say: "It’s no secret. Recently, J.C. Penney changed. Some changes you liked, and some you didn’t. But what matters with mistakes is what we learn. We learned a very simple thing: to listen to you. To hear what you need to make your life more beautiful. Come back to J.C. Penney. We heard you. Now we’d love to see you.”

“At J.C. Penney, we never stop being amazed by you. How you work so hard without looking like you do. How you make every dollar stretch so far and keep your family so close. So we brought back the things you like about J.C. Penney, gave you new things to explore and now, we’re happy to say, you’ve come back to us. We’re speechless, except for two little words. Thank you.”

But back to social media....using the hashtag #jcplistens, JCPenny is in response overdrive from what I saw on Twitter today. They are in constant contact with its Twitter-ites. Every customer or tweet seems to get a personal and speedy response asking to help out, mentioning they will share the feedback with the team if something was amiss and thanking customers for comments. As pointed out on Business Insider, they even told people when they were retiring for the evening. On its Facebook page, JCPenny is polling fans about their favorite brands that they want back after having been cut by the former CEO. And it looks like they are bringing back St. John's Bay, a favorite. So they are listening hard.

You've got to hand to them. They're trying. And social apology tours are a smart redemption move.

An approach to sustainability...

96611357 [Converted]My good friend Bob Eccles, professor of management practice at Harvard Business School, wrote an article (The Performance Frontier) that just appeared in the Harvard Business Review.  Here is a PDF. I've been extremely interested in his work on integrated reporting for awhile now. What is integrated reporting? Essentially it is One Report that combines financial and non-financial information interactively into one document. A good example of a company that has done this is Natura. Although integrated reporting is voluntary today, it is required of all companies on the Johannesburg Stock Exchange. But integrated reporting is much more than an online CSR showcase. When it is done right, it is an authentic and innovative two way conversation where a company convenes its stakeholders to discuss its progress meeting its financial and nonfinancial goals. For example, Natura does this through Natura Conecta where the public is invited to have a discussion on environmental and social issues related to the company. It is a living exchange, not a static one that is one-way and more push than pull. Bob's article has an interesting slant which he points out in the introductory sentence . . ."But a mishmash of sustainability tactics does not add up to a sustainable strategy." He argues, along with his co-author George Serafeim also at Harvard Business School, that we need a solid framework for simultaneously boosting financial performance as well as doing good. Tactics alone won't do the trick. They provide a model for identifying the most environmental, social and governance (ESG) factors that drive shareholder value so that both financial and ESG performance are enhanced, not just one. A company that focuses on sustainability without paying attention to the financial costs is not going to have a genuine sustainability strategy that meets everyone's interests. Similarly, a company that focuses solely on financial performance to the exclusion of good ESG performance will lose out as well in terms of public opinion and support. A major component of reaching this perfect balance, according to them,  is by identifying major innovations in products, processess and business models that achieve these improvements and accomplishes superior financial and sustainability performance. A good example is the one with Natura mentioned above. They also cite innovative business models from Dow and Hong Kong-based CLP Group. And then, of course, Bob argues that these activities are ideally communicated through integrated reporting.

What fired me up was the SASB (Sustainability Accouting Standards Board) Materiality Maps that have been created for 88 industries in 10 sectors.  Each industry has its own map that prioritizes 43 ESG issues and ranks them in terms of materiality. Not all the maps are complete but take a good look at this one for the health care sector. It shows which ESG factors impact financial performance so that a company knows what to prioritize. It's a great contribution to understanding ESG factors as well as what drives strong corporate reputation. Don't miss it.

And congrats to Bob and George for raising an important question about how to better balance financial costs and sustainability costs so that they complement one another instead of taking away.