Where Have All the Reputations Gone?
As the economy sinks and more CEOs and employees lose their jobs, someone needs to ask where all the corporate role models have gone? I think about the answer to this question often. Have all those most admired, most respected, most responsible, most innovative, most diverse, most wealth-creating, most accountable and most valued companies vanished or are they simply waiting for someone to rewrite the rules for reputation-building today?
Reputation has become deeply entrenched in our global conversation. It was not always that way. Since 2000, reputation mentions have grown 88% in the top tier global media. Reputation specialists are now in great supply. “Reputation expert” numbers over 25 million hits in search engines compared to 10 years ago when they could be counted on one hand. Reputation rehab is growing more popular and populated these days. Ousted former Merrill Lynch CEO John Thain just entered treatment for handing out nearly $4 billion in bonuses to ex-colleagues and sprucing up his office for $1.2 million. Now defunct Lehman Bros. CEO Richard Fuld never passed the 12 step regimen without an apology and fraudster Bernie Madoff’s detox is beyond hope. Royal Bank of Scotland’s former bosses were given a 10% discount for at least admitting that the takeover of ABN Amro was a “bad mistake.”
As business leaders hit new reputation lows, most pundits or reputation experts are finding it more difficult to name companies to “best of” reputation lists. So what’s around the corner for reputation repairers looking to mend the good names of companies and CEOs? Here are three suggestions for rebooting reputation over the next 12-to-18 months:
First, as companies continue to announce layoffs, reputations will be built and destroyed on how well job losses are communicated and how fairly the process is handled. In recent years, corporate responsibility had come to mean how workers in emerging markets are treated in the production of company goods and services. In the months ahead, reputations will be built on how transparent and fair leaders are in treating their employees and particularly now, in communicating workforce reductions. As one recently departed and highly distraught employee posted on www.firedfornow.com: “On a Wednesday I received an e-mail from my boss ordering me to fire one of my subordinates. I spoke to her on Friday morning – it was painful and horrible. On Friday afternoon my boss fired me! What an a**!!!!!!!!” In defense, leaders might want to take note of Starbucks’ founder and CEO Howard Schultz’s straightforward employee memo on upcoming layoffs and store closings.
Second, reputations built on safety will rise in importance. Consumers, vendors, legislators and other stakeholders will want to know how safe a product is before buying, flying or eating it. The public will want assurances from companies that they are taking the necessary precautions to safeguard their physical and psychological safety. Investors will want guarantees that that their money is out of harm’s way. Talent will find ways to determine whether boards have secure risk management systems in place. Citizens will not stand for government agencies that are lax in their inspections or are in cahoots with industry leaders. As I see it, safety will replace innovation as one of the most important elements of a good reputation. Risk is out, security is in.
Lastly, companies that listen and engage employees and customers online will be tomorrow’s reputation kings and queens. Our recent research on managing reputations online among global business leaders found that word-of-mouth is an essential reputation ingredient today, ahead of financial performance, talent and corporate responsibility. CEOs are woefully stuck at the Web 1.0 level and need to embrace Web 2.0 social media tools to spread their company’s merits far and wide. Companies that reach out to bloggers and posters with solutions to problems will prevail. As Dell CEO Michael Dell said after his computers were famously maligned online, “I’d rather have that conversation in my living room than in somebody else’s.” Giant retailer Best Buy’s bottom-up internal social networking site lets store employees have their own Facebook-like profiles, create wikis, initiate topics of conversation and discuss Best Buy policies. Management does not always have to go beyond its own four walls to learn first-hand how it is doing and what needs to be fixed.
No doubt about it. Reputations will fluctuate radically in 2009 but rebound slowly in 2010. How to manage that rebound is just now becoming clearer. Reputation experts like me have their work cut out for them.