Reputation Notebook

Who Succeeds in PR

Last night I attended Secretary of the Treasury Henry Paulson's address to the Economic Club of Chicago, which provided a range of interesting insights into the financial world, as well as his personal dealings with the president. He offered a thoughtful, common-sense overview that I felt seemed free of partisan bias and long on concern and care for the average individual.

As interesting as the presentation was - and it was quite good -- I must say that I've spent more time thinking about a conversation with one of my dinner companions who devotes his days to using very sophisticated, high power analytics for asset management. In fact, it's probably more than a profession for him; it's more of a passion. He talked about how the financial business is filled with "quants," yet there is a largely untapped opportunity to bring in thinkers from other sciences, like physics or bioscience, who are taught to look at patterns and physical properties, not just hard numbers. We talked about the similarities with the communications business and how some of the best solutions are not created by media-types, but from people with diverse backgrounds. I told him how there was not one "type" that succeeded in our profession any more, but that the industry has evolved to the point where a diversity of perspectives is virtually required now to start and execute good campaigns. Where our clients once focused solely on the PR team's media or financial analyst relationships, there is a growing appreciation for time spent in government, foundations, consulting, academia or industry. Arguments are made with both a rational and emotional appeal, to a wide range of stakeholders. It's exciting to participate in this change and to bring new faces to the table.

Running Across One Screen and On to Another?

Last week Nike revealed a new television commercial for the season that highlights its Nike Plus shoe and leverages a history of running thematic.  The commercial is dramatic and engaging and in line with what you would expect from Nike.   The campaign also is supposed to include video testimonials that will appear on Nike's social networking site, giving people a chance to "post their running resolutions" and let friends track their progress.   Nike's current forum includes a place for runners to issue challenges, learn about marathons and query other passionate runners.   Tapping into the social aspect of the running community will be a big challenge here and it's unclear to me if the commercial will only drive consumers to consider the shoe (not a bad outcome), or if it will somehow get runners to socialize their impressions online and off.    Will the site enable average runners to post their own video testimonials?   How will Nike leverage the ad to get runners to talk to each other about their experiences?   

Small But Vocal Minority Shapes Corporate Policy

Facebook's decision to change its implementation of Beacon's features is notable, not only for the CEO's public apology amid a privacy crisis, but more importantly for the the power wielded by a small group of activist users.   

According to a Wall Street Journal article, in this case, when MoveOn.org Civic Action began to protest the Beacon privacy issue, its members only represented a small portion of the total Facebook universe -- "little more than 0.1 percent of Facebook's 57 million active users."    The MoveOn contingent was large enough, or to be more accurate, vocal enough to apply pressure and start momentum on the privacy issue.   This behavior mirrors the findings of our own Edelman Trust Barometer last year, in which we noted that among a company's stakeholders there are sub-groups that have different views, behaviors and characteristics.  Often, only a minority of a company's universe will be considered "activist," pre-disposed to taking action for or against a policy, however, that small group, armed with the tools of the web, can quickly influence many others.   In this case, Facebook has felt the pressure of the group and subsequently, the pressure of its advertisers, and elected to change course.   All at a time when the firm is trying to raise additional funding.

In every industry there are issues that can quickly ignite the small but vocal  minority and provoke them to act.   Here, Facebook changed its policy and actually was publicly credited by MoveOn.org for taking "a big step in the right direction."  The question now if whether the firm can transform this incident into a platform for more long term socially responsible behavior.

Is Advertising the Right Approach for Siemens?

This morning's Wall Street Journal carries an interesting article by Mike Esterl spotlighting Siemens' plans to launch its "most extensive advertising campaign" to counter the damage done to its reputation by "a massive corruption scandal."   

The article provides detail on the advertising campaign, but fails to mention any other communications steps that the company is taking to reverse its negative momentum, aside from spending big on advertising.   

Hopefully the Siemens communications campaign will be broader than a technology marketing approach and will involve intensive relationship building with investors and policy makers, online conversations with customers and influencers, and employee engagement to restore confidence internally.  The company needs to create a community of believers and get them talking to each other about its future.   A one-way communication is not going to make the impact that this company needs.

If these communications elements are included in the strategy, the article makes no mention of it.   Perhaps the reporter did not ask about them.   I would suggest that these are the dimensions of reputation building that need to be highlighted in such an article-- as much as the ad campaign.

Defining Moments

I attended a speech yesterday by Daniel "Rudy" Ruettiger, the former Notre Dame football player whose 27 seconds of total playing time and relentless pursuit of a childhood dream have become legend -- and also Hollywood fare, made into the movie "Rudy".
It's hard to dislike the Rudy story -- the kid who finally gets his chance at his dream and gets carried off the field in glory. Ruettiger himself said that many people come up to him to say "That's my story, too."
In making connections to the business world, it strikes me that entrepreneurial companies have the same story too: they're trying anything to get an edge in a market where, to use Ruettiger's words, "everyone else is bigger than you, smarter than you, faster than you." They're seeking that one chance to show the world what they've got, the one opportunity that will thrust them onto a bigger stage. In some cases, it's about getting an opportunity; in most, it's about making an opportunity.
We've often talked to clients about the importance of making bold moves that will put their firm's reputation on a new trajectory. I walked away from the Ruettiger talk with an even deeper appreciation for how much those singular opportunities might mean, not just in the life of an individual, but also in the life of a company.
I welcome you thoughts.

Reputation at High Speed

A recent experience with a client facing a crisis situation underscored the importance of speed in responding to public challenges and criticism.   Company executives felt they had time to absorb the events of the day, develop a careful, deliberate and legal-tested response, then issue it in time for "the next news cycle."   What they meant was the next morning's newspapers, but those of us in the communications business know that the news cycle they refer to is a mirage.   Media web sites, citizen journalists and legions or bloggers have reduced the concept to "micro-cycles" in which the news bounces from newswires to online media sites, then to print, to blogs to broadcast and back again within a day -- if not hours.

In PR, we used to think in terms of "day-one stories" and "day-two stories," but I think we've landed in an environment of more intra-day news phases --  morning stories, afternoon stories and overnight stories.   It's just before 11 p.m. in Chicago, but tomorrow's business headlines will become real news in just 90 minutes, just after midnight when the online versions of newspapers go live.  Wire service reporters will read those editions and file stories based on that coverage, even citing their competitors' articles in an effort to stay current.  By the time the Wall Street Journal hits my driveway around 5:30 a.m., the business broadcast shows already will have analyzed the coverage and offered their points of view.   Online media subscribers will have offered their opinions through reader reactions and even on their own blogs.   All this will have taken place before the opening bell of the New York financial exchanges.

For me, these shifts have radically changed what I read, when I read it and what I do with it.  How is this environment changing your media habits?   Your communications strategies? 

New Conference Board Research on CEO Concerns

What are the greatest concerns of U.S. CEOs?  According to new Conference Board research, reputation is in the top 10, but far below more tangible business concerns.

(% citing challenge as of “greatest concern”)

1. Sustained & steady top-line growth                                          41.3%
2. Excellence in execution                                                                 39.6%
3. Consistent execution of strategy by top management            38.5%
4. Profit growth                                                                                  29.9%
5. Customer loyalty/retention                                                          25.6%
6. Finding managerial talent                                                             20.9%
7. Top management succession                                                      20.1%
8. Corporate reputation                                                                    19.7%
9. Stimulating innovation/creativity                                               19.2%
10. Speed, flexibility, adaptability to change                                   18.2%

From the news announcement:

Execution is taking precedence over profit and top-line growth as a focus for CEOs around the world, according to a global survey of chief executives released today by The Conference Board.

The survey of 769 global CEOs from 40 countries is from The Conference Board report, CEO Challenge 2007: Top 10 Challenges.

When asked to rate their greatest concerns from among 121 different challenges, chief executives participating in this year's survey chose excellence of execution as their top challenge and keeping consistent execution of strategy by top management as their third greatest concern. Sustained and steady top-line growth, which led the pack last year, now ranks second, with profit growth fourth, and finding qualified managerial talent fifth.

"This year's overall top challenge shows that CEOs from around the world are realizing that strong execution is a critical factor in driving profits and revenues," says Jonathan Spector, President and CEO of The Conference Board. "These executives are also becoming increasingly aware of the crucial role that people play in growing their companies."

The Challenge to Keep Learning and Stay Open to Ideas

I really enjoyed this article "The Cost of Competence" by David Freedman from the September issue of Inc. and wanted to pass it along to a wider audience.   It contains great examples of how events and trends provided the catalyst for business success -- and provides a valuable warning about the dangers of complacency.

http://www.inc.com/magazine/20070901/whats-next-the-cost-of-competence.html

Beyond Compliance

The pressure is increasing for corporations to step up and take over where government will not -- or cannot.   Two recent situations highlight this point.  In the first, toy maker Mattel has responded well to a massive product crisis and has sought to communicate openly and widely.   Only today -- many days after the situation become public -- did the Consumer Product Safety Commission announce that it would support Mattel in its efforts to manage the recall.   

By contrast, BP's reputation has been seriously damaged as a result of a plan to increase the amount of pollutants (ammonia and sludge) it dumps into Lake Michigan.  BP had insisted its actions would fall within EPA guidelines; opponents said that government guidelines don't go far enough and BP should recognize this and "do the right thing."   BP tried to confront its critics through paid advertising and even by paying bloggers, according to the Chicago Tribune.  Ultimately, BP had to bow to public and legislative pressure and cancel its plans, agreeing to either deploy newer technology or abandon its expansion efforts.    The lesson for corporations is clear:  expect to find less protection within the limits of the law.   Management instead needs to look at the broader range of societal impacts of its actions and be willing to engage on the issues that affect its constituents.   Compliance is no longer viewed as wholly sufficient.

Even legislators joined the chorus of critics and turned to social media for their outreach.  Click here to view a YouTube video from Illinois' Senator Durbin on the issue.

Bloomberg Advice: Try Another Mountain

I've had a long hiatus from posting, due to personal and professional travels, but the notebook is overflowing with ideas, observations and lessons from the road!   Special thanks to those of you who have left comments, particularly those on my last post on IBM's Sam Palmisano.   I'll try to incorporate your suggestions into the evolution of the blog and appreciate the comments.

At the top of the summer reading pile is my already-dog-eared copy of the June 25 BusinessWeek.   If you haven't read it yet, skip past the cover story on the telecom industry (perhaps pausing momentarily to consider the American adult broadband access statistic of nearly 50 percent) and go straight to Tom Lowry's amazing profile of New York mayor Michael Bloomberg, "The CEO Mayor."  It's far from the usual CEO profile; it's a guidebook for leadership and management success.    He examines Bloomberg's business approach to public service:  the city as a brand, voters as customers and transparency in reporting. 

In particular, I've returned several times to this great quote that Lowry drew from Bloomberg:

"In business, you reward people for taking risks.  When it doesn't work out, you promote them because they were willing to try new things.  If people tell me they skied all day and never fell down, I tell them to try a different mountain."

Equally compelling is the publication's current issue (July 9 & 16) with its article on "What Price Reputation?"  that attempts to quantify the impact of a positive image on stock price.   It's an article that is sure to be quoted ad nauseum by managers in our field.

Look for a point of view and an alternative to this "new science of reputation management" later this week.