Reputation Gurus

With so many reputational gaffes that occur, it’s nice to see a company taking a pro-active stance to their reputation management – and getting it right! 

Earlier this year, the Grocery Manufacturers Association and the Chocolate Manufacturers Association, together with 10 other trade groups, filed a petition with the FDA that would allow chocolate manufacturers to use cheaper vegetable fat instead of more expensive cocoa butter, yet still call their products “chocolate”. 

Now, I’m no chocolatier, but I am a chocolate eater, and somehow calling something “chocolate” when it really has nothing in it that makes it chocolate seems like … well, it seems like going into a restaurant, ordering crab, and then being told that white fish disguised as crab is just as good. 

So, I was pleasantly surprised when Mars (maker of M&Ms, Snickers, Milky Way and Three Musketeers) “broke the ranks”.  Based on the huge outcry from consumers, Mars has decided that ”
U.S. consumers do not want their chocolate changed”. 

Even if the FDA denies the petition, ensuring that chocolate manufacturers’ products continue to adhere to the “100% cocoa butter” rule, Mars still comes out a winner by staying true to what consumers call chocolate.

On Sunday, October 7, nearly 36,000 people ran the Chicago Marathon, despite record temperatures.  By noon, the race was suspended, one runner was dead, thousands were overheated and tens of thousands were dehydrated because the race ran out of drinking water.  On Monday, runners were waiting for an apology.  They’re still waiting.  Race organizers, apparently concerned about reputations and a backlash that might harm
Chicago’s bid for the 2016 Olympics, broke a basic rule of crisis communications:  They failed to acknowledge a problem.  They blamed hot temperatures everyone had predicted for several days before the race.  And they blamed runners who prepared for months to run the race.   Executives who hide their heads in the sand during crises also bury their companies’ reputations.  Unless they get it right fast, the Chicago Marathon’s executives will learn that lesson painfully.

In yesterday’s blog posting, I pondered a bit why companies with women at the top have delivered better financial results, according to the US organization Catalyst.  I don’t want to turn this blog into a treatise for the feminism movement, but, interestingly, the FT filed a story this morning that posed the same question.

According to the FT, McKinsey presented research yesterday at the Women’s Forum for the Economy & Society in Deauville, France, which finds that there’s a strong link between the number of women at the top and a company’s financial performance, showing that these companies do better in than the average company in their sector in terms of return on equity, operating result and share price growth.  The study took it further by finding that companies around the world where a third or more of the senior team are women score higher on organisational excellence — accountability, innovation and work environment.

The article does ask why this is true, but there are no real conclusions.  For us as reputation managers, I believe that we should be looking at these types of factors and how to play them up with key internal and external stakeholders.

A recent study by Catalyst, a US research organization that promotes women in the workplace, found that large US companies with the greatest retention of women in top management generate a third more returns than companies dominated by men.

The organization doesn’t necessarily point to why this is true … Is it because women bring a unique perspective to the boardroom?  Is it because companies with more women at the top may have more people with diverse backgrounds, thereby attracting different outlooks, experiences, etc. that help a company be more innovative? 

Perhaps shareholders should look at a company’s senior management composition before buying stock.  Perhaps we, as reputation managers, should factor the diversity of senior managers when assessing the company’s corporate reputation.

Corporate social responsibility (CSR) — the idea that a company needs to act ethically and responsibly and give back to the communities in which it operates – has been around for decades.

However, I’ve always been suspicious of companies that seem to embark upon CSR for PR reasons.  I know that sounds odd coming from a PR practitioner, but doing it specifically to get kudos from others seems a bit off to me — it lacks authenticity.

That’s why I’m so intrigued by the newest trend in CSR — whereby companies are engaging in responsible practices that also make their business stronger, more profitable, provide a better product, etc.  Some may say that this trend isn’t new at all — think Ben & Jerry’s or 7th Generation.  But, those are examples of companies who were enlightened from the beginning — companies that built responsibility into their business model and built it from the ground up.

The new trend:  Some companies that did not start out with responsibility in mind have evolved to begin incorporating it into their business models.  GE is leading the way in turning a profit on its environmental initiatives.  Likewise, Nike (a client of GCI’s) is making athletic equipment that’s stronger/higher performance and sustainable.  AIG is looking at microinsurance in emerging markets, picking up on the successful work that Nobel Peace Prize winner Muhammad Yunus has pioneered.

These are the companies on the cutting edge of CSR today — and others should follow suit.