Reputation Gurus

While many companies are waking up to realize that their overall reputation management is as critically important as managing their bottom lines, some still see it as more of an art than a science.  That’s where they’re mistaken.

Don’t misinterpret what I’m saying … there is a tremendous amount of art and creative strategy that goes into managing a corporate reputation.  But, without the scientific part — the quantitative and qualitative research that grounds the art and science with true insights into the company’s stakeholders expectations, the corporate reputation efforts can be likened to chasing fireflies.

Solid reputation research should start with the company’s employees — what do they want the company to stand for?  What’s important to the DNA of the company?  And, then it should move to external stakeholders — analysts, community leaders, customers, etc.  The employee research should serve as a foundation for exploring what those external stakeholders expect from the company — what’s important to them so that they will recommend the company’s stock, or buy the company’s products, or allow the company to operate in their community.

Once the research is conducted, then it’s important to examine the gaps between what the company wants to stand for, and what stakeholders expect.  Ideally, those gaps are not too large.  If they are, then the company must do some true soul searching to determine if there are operational issues that need to be resolved.

This research not only helps to ground the reputation strategy, but it also helps to serve as a benchmark for measurement, as well as the foundation for a solid issues and crisis management program.

From the head of GCI’s media relations practice, Bill Crane:

Be careful of too much ado…

We’ve been following Lucy Kellaway’s diatribe in the FT about Deloitte’s employee communications with amused interest, and even blogged about it a few weeks ago.  Last Monday, she devoted an entire column to the fact that she had been invited to Deloitte that very morning (9 July) to get a “state-of-the-art corporate bollocking.”  She then proceeded to complain that corporate bollocking today is not what it used to be, since the “PR people have taken over and emotion has been outlawed.”  The FT even recorded her column for a podcast, which can be accessed from their website.

Since, then, we’ve waited to hear how the “corporate bollocking” went for poor Lucy.  Today, she makes a short mention of it at the end of her column about a completely different topic.  She states that the meeting with Deloitte “went very well indeed” and she seems to have been impressed by John Connelly, Deloitte’s global chairman.  In fact, she complimented him for keeping his emotions in check and for asking her what it is that Deloitte has to do in order to get her to write a positive column about the company.  She even admits that “Global chief of Deloitte sends perfectly okay e-mail” doesn’t make for a compelling headline.

And, that … as far as we can tell … is the point.  Although she complained about PR people getting involved, they clearly made a difference here, helping the chairman prepare for the meeting, and ameliorating the situation with her sarcastic (and oh-so-fun-to-read) pen.  And, like any journalist, Lucy is looking for compelling headlines.  It will be interesting to see how long she waits before writing about Deloitte again in the future.

The Financial Times gives us so much fodder for this blog!  Their columnists seem to comment on issues impacting the PR business almost daily.

There are two stories today worth commentary.  First, Lucy Kellaway continues her rant about Deloitte, writing a column yesterday about having an appointment to meet with them as a result of her recent columns, and then a podcast about the meeting.  More on that tomorrow when we’ve had a chance to listen to the podcast.

The other is a commentary written by John Kay, who has focused today’s column on the confusion between branding and products.  He brings up some interesting points (e.g., “With restaurants or wine, a strong brand is not so much a guarantee of excellence as of its opposite — McDonald’s and Gallo are names to conjure with for accountants and brand managers, not gourmets or wine connoisseurs” and “The name is a means of labelling what we know; the brand is a means of conveying information about what we do not know”).

However, we find ourselves disagreeing with his overall premise.  While it’s true that people do confuse brands with products, he’s missing the very important concept that brands are only as good as their brand essence.  McDonald’s isn’t a brand that’s meant to appeal to a gourmet.  It’s a brand that stands for quick, inexpensive and uniform food in any McDonald’s restaurant in any part of the world.  Likewise, companies that have focused on building their corporate brands stand for something that business executives and investors appreciate — FedEx for service and dependable delivery; J&J for caring; Dell for made-to-order.

In addition, the columnist states, “Brands appeal to the underconfident.”  While we understand his point, we do not agree with it.  Building a brand means finding a way to resonate with your audience … whether it be the hamburger eating public, the wine connoiseur, or the investor.  By conducting in-depth research, we can now identify what most resonates with the company’s target audience, and then build a brand around their expectations and the promises the brand is meant to keep.

When Jim Quigley became CEO of Deloitte on June 1, it’s clear that he had a corporate communications team (and perhaps a PR agency) behind him to help introduce him as the new CEO. 

However, at this point, I wouldn’t want to be in their shoes. 

Lucy Kellaway, a well-known workplace reporter/columnist for the Financial Times, has brutally written about Deloitte’s two major employee communications missives.  First, she skewered his introductionary memo, saying that, in her opinion, it’s the worst motivational memo she’s ever read (FT, 11 June 2007).  Then, she followed up with another column this week, headlined “I’ve found the worst employee handbook ever” (FT, 1 July 2007), lambasting Deloitte’s “The Little Blue Book of Strategy.”

I haven’t read either pieces, and so I cannot comment on them.  However, there are clearly some important lessons here for those of us who work in the employee communications field. 

1) Make sure that your memos/emails to employees have clarity.  This seems obvious, but the columnist includes some pretty opaque quotations from Quigley’s memo.  And, while we’re addressing clarity, make sure that your language resonates with the staff.  A good communications team asks people at different levels of the organization to review important documents prior to distributing it globally.

2) Avoid platitudes.  Again, this one seems obvious, but communications professionals tend to rely upon platitudes way too frequently, which, of course, become hyperbolic and also interfere with the clarity of the message.

3) Always state what’s in it for them.  Employees want to know how they can make a difference at the company.  If your communications doesn’t outline how they can do that and what the rewards will be, then we’re back to corporate platitudes again.

4) Remember that everything you distribute internally gets distributed externally.  Someone at Deloitte sent these two employee communications pieces to this particular columnist.  She’s doing her job by reporting on it; it’s our job to make sure that it’s written so well that she decides NOT to write about it (unless, of course, she wants to applaud the clarity of the document).

Business Week’s cover story entitled “What Price Reputation” (July 9, 2007 edition) is an interesting and important read for anyone in the reputation management business.  There are many points of the article that resonate with us: 

1) There’s a new science of reputation management;

2) Savvy companies now realize a need for a more sophisticated understanding of the power of perception;

3) The trick is to decide which factors are most important to a company’s image — and those factors will differ vastly for each company;

4) Experts (including those at GCI) are out there to help Corporate Communications departments look at their reputations and “re-engineer” or build them.

In fact, it’s a fascinating time to be in this business, and we’re pleased to be working with companies like Darden and Dell in this arena.

However, there are a few important points of this article that we need to comment on … While it’s tempting to sell the idea of corporate reputation as a stock price boost, that’s only one part of the story.  Yes, a sterling reputation has tangible impact on the valuation of a company — anyone who works in this industry knows that, and it’s nice to see it recognized in an important publication like Business Week. 

But, corporate reputation should be looked at holistically, not just through the lense of market valuation.  Stock price is critically important, but a positive corporate reputation also allows companies “license to operate” in communities, to weather issues and crises better than others, and to attract the brightest and best employees, among other, less tangible benefits. 

Thus, truly savvy companies start their reputation “re-engineering” by researching many different stakeholders — including securities analysts, industry analysts, community leaders, industry leaders, customers, the general public, employees, critic groups, and even senior management of the company itself. 

By gaining a 360 degree view of a company’s reputation, we can then truly identify the expectations of that company and the gaps in those expectations, as well as the issues that are most important to them.

The Coca-Cola company announced today that it is creating a culture to more proactively address issues such as sustainability, marketing to children, the company’s role in society, etc.

While we applaud Coca-Cola for becoming more proactive in this area, which is a right step in rebuilding Coke’s corporate reputation, we also wonder about the company’s motivations. Are they doing it because it’s time for the company to wake up and realize that it could be a leading contributor to society in general? Or are they doing it because they are a constant focus of critic groups?

Regardless, it’s a step in the right direction, and we should all watch carefully over the coming years to see whether they’re making true changes in their culture, or if this is just a platitude.

A lot has been written in both MSM and online about Delta Air Lines’ emergence from bankruptcy, and the company has earned a new-found respect from industry insiders for using bankruptcy protection to completely overhaul its operations. I saw one comment about Delta being the “one who did bankruptcy right,” compared to its competitors and others who have sought Chapter 11 protection in the US.

The company has also gotten a lot of kudos for how it treated its employees during the time that it was in Chapter 11, as well as what it has done for employees as it emerged from protection at the end of April. Delta’s CEO Jerry Grinstein made a noble announcement that he would forego any additional compensation or bonus that he earned by navigating the company through this arduous restructuring. Instead, he has asked Delta to give that money to financially strapped employees as well as to a scholarship fund for Delta employees’ children.

As someone who worked with Delta just as they were going into Chapter 11 protection, I know that the company did everything right when it came to employee communications — before, during and now after the bankruptcy. They provided complete transparency with everything that was happening, including when they asked employees for paycuts and furloughs. They had a robust intranet for disseminating information, and they even held regular town-hall meetings to allow employees to vent their frustrations and fears. After they emerged from bankruptcy, the company announced modest raises for everyone — a true sign that they appreciate what their employees did during rougher times.

Delta is on its path to recovery, and hopefully has a loyal employee base to rely upon as it tries to grow internationally — it needs its employees now more than ever. Any company wishing to engender positive employee relations would be smart to talk with Delta’s employee communications team.

The FT ran an interesting short piece this morning (June 19, 2007) about how brands that were once tarnished have been able to turn around their image in consumers’ eyes. It states that Nestle, which was once subject to boycotts for developing world marketing activities, topped some national rankings when a research group asked consumers in five countries to name their most ethical brands.

As someone who grew up in a household that boycotted Nestle, I find this fascinating. In my mind, Nestle will always be linked to poor baby formula … but they’ve been able to resurrect their image by being much more progressive with their marketing practices.

This reinforces my conclusion that most companies’ corporate images can benefit from a progressive stance on an issue important to them — be it the environment, “living wages”, supply chain diversity, etc. The key is to have the first mover advantage — to be the first in their industry to take a leadership position on an issue that’s important to the company, its employees and its consumers/customers.

Old Rule: Corporate reputation is defined by external stakeholders.

New Rule: The most important element of corporate reputation comes from within the company. While it’s important to understand how the company is viewed externally, reputations are built or lost by internal stakeholders. It’s the internal stakeholders who need to live and breathe the company’s values – and to make decisions on a daily basis using those values as the guide. One company I admire in this area is Darden Restaurants, which makes daily decisions based on its core values. Whenever in doubt, Darden uses its values as a filter to help make the right decision for the company.