The Future of Reputation - People's Insights Magazine

The Future of
Reputation
VoLUME 3, IsSUE 1
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The Evolving Role of the Board in Reputation Management
Brad Wilks, MD, Midwest, North America, MSLGROUP
France: Social Performance Comes First
Fabrice Fries, President, France, MSLGROUP
China: Facing the Challenges of a Low-Trust Society
Par Uhlin, MD, MSLGROUP in Hong Kong and Vice Chair,
MSLGROUP China
India: The Awakening
Jaideep Shergill, CEO, India, MSLGROUP
Poland: Invaluable Reputation - Protects, Motivates, Sells!
Katarzyna Stamatel, Head of Law & Consulting, Poland, MSLGROUP
Reputation Journey: The Now & The Next
Reputation Management: From Risk
Mitigation To Competitive Advantage
Perspectives: Reputation Around The Globe
The Reputation Complex: Seeking Sustainability
in a Liquid World
Pascal Beucler, SVP & Chief Strategy Officer, MSLGROUP
Reputation and Corporate Image Today
Paulo Andreoli, Chairman, Latin America, MSLGROUP
Your Corporate & Brand Reputation is Now in the
Hands of Millennials
Scott Beaudoin, Global Practice Director, Corporate & Brand
Citizenship, MSLGROUP
The Future of Reputation is about Building from
the Inside Out
Jason Frank and Brian Burgess, Global Co-leaders,
Employee Practice, MSLGROUP
Reputation Building by Influencer Collaboration
Martin Dohmen, Germany Director, Corporate & Brand Citizenship/
PurPle, and Chief Strategy Officer, MSL Germany
The Reputation Journey: What we can learn from the
financial services crisis
Olivier Fleurot, CEO, MSLGROUP
From Ignition to Recovery: The Components
of Todays Crises
Nidhi Makhija, Senior Manager Insights, MSLGROUP
How to Manage your Reputation in the Social Age
Merrill Freund, MD, San Francisco, MSLGROUP
Tap into Big Data: The Transcript of your Reputation
Frederike den Ottelander, Head of Digital & Social,
Netherlands, MSLGROUP
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. . . 79
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Todays Stakeholders: Demanding,
But Open To Collaboration
FOREWORD
cEO, MsLGRoUP
OLIvier FLEuRot
4
The Future of Reputation
Trust and reputation were underlying themes
at the World Economic Forum held in Davos
earlier this year. From the many sessions and
conversations, two trends were clear.
First, the trust crisis is still top of mind
for many international executives and
leaders. There was a general consensus that
organizations still need to restore trust and
actively manage their reputations.
Second, good reputation is considered good
for business and for smoother relations
with all stakeholders. There were many
discussions around the positive role that
business can play in society and leaders
seemed more willing to embrace sustainable
growth and corporate citizenship.
For corporates and brands, there is a strong
need to protect reputations and mitigate
risk and to leverage strong reputations for
competitive advantage. As trusted advisors to
our clients, we are dedicated to helping you
do both.
In this magazine, experts within MSLGROUP
dissect reputation to understand:
Whats new, whats same, whats different,
whats coming? Why does it matter to our
Corporate and Consumer clients?
How does Reputation resonate with
Values, Purpose, Corporate Citizenship
and Talent Engagement?
What should we know about the
Generation Gap, the new dynamics created
by the highly demanding GenY and soon
GenZ?
How has the digital and social revolution
changed the game?
From a North-American, Latin-American,
European, Chinese, Indian perspective,
what are the key components of a
reputation in the Conversation Age?
I hope that you will enjoy reading this report
and find that it simplifies the complex world
of Reputation.
5
The Future of Reputation | Foreword
EXECUTIVE
SUMMARY
6
sVP & ChiEF StRategY OfFiCer,
MsLGRoUP
PaScal BEUcler
7
The Future of Reputation | Executive Summary
People across the world are realizing the power of
social networks, valuing social performance ahead
of financial performance and demanding corporates
and brands contribute to local communities.
Reputation: The Now &
the Next
A lot has changed in recent years. In
particular, three shifts have boosted
reputation to the #1 Strategic Risk today, as
was found in a recent Forbes-Deloitte study.
1. Shift in stakeholders - From Powerless
to Empowered
2. Shift in corporate ethics - From Social
Responsibility to Citizenship and
Sustainability
3. Shift in purchase decisions - From buying
the Product to buying the Purpose
More and more, we are seeing these trends
emerge across markets. People across
the world are realizing the power of social
networks, valuing social performance ahead
of financial performance and demanding
corporates and brands contribute to local
communities. As a result clients across the
globe are embracing communications to
manage reputational issues.
In this issue of the Peoples Insights
magazine, our experts explore the
concept of reputation to understand what
it is composed of, who is driving it, and
how brands can excel at building strong
reputations for the long term.
8
Already organizations are
engaging with millennial
customers, regulators,
shareholders, employees
and external influencers.
Not only is this
generation personally
driven to be better
citizens and make a
difference, it expects
businesses to do more
to address societys
challenges.
Todays Stakeholders are
demanding, but open to
collaboration
In the past, companies catered primarily to
customers, regulators and shareholders, not
necessarily in that order. Today, thanks to the
social digital revolution, new stakeholders
have emerged:
Millennials
born between the 1980s and 2000s, this
generation extends across all stakeholder
groups. Already organizations are
engaging with millennial customers,
regulators, shareholders, employees
and external influencers. Not only is
the generation personally driven to be
better citizens and make a difference, it
expects businesses to do more to address
societys challenges
Employees
past, current and future employees are
empowered by personal and professional
social networks. Through their actions in
both the real and virtual world, they can
have a direct impact on customer loyalty
and corporate reputation.
External influencers
external subject matter experts are
passionate about shaping the future
and willing to co-create it. They exert
influence within their own networks of
like-minded peers or occasionally
through traditional media.
9
The Future of Reputation | Executive Summary
Reputation Management:
From Risk Mitigation to
Competitive Advantage
These stakeholders represent a huge
untapped potential to be really authentic
and powerful advocates and influencers.
To engage them, companies must:
Do the Right Thing with ethical and
sustainable development plans
(Re)engage with employees & tap into
their Social IQ to harness authentic and
powerful voices
Co-create the companys offer and
strategy with influencers to boost
innovation and add credibility to a brands
promise of sustainable development
Engage around a shared purpose
that aligns the interests of business
and stakeholders
In addition, corporates and brands can
leverage the latest social and digital tools to:
Monitor what people are saying
with Big Data
Social conversations and data can be
analyzed to track the rise of negative
comments (who, what, where) and
intercept before they become crises,
understand how people really perceive
your brand and measure the impact of
communications in real-time.
Communicate frequently and
consistently by becoming Social
Squared
Organizations should balance traditional
and new techniques cater to influencers
with mass reaches while also tapping into
new influencers and niche communities
and generate a steady stream of
meaningful content.
Finally, to succeed in the long term,
organizations must take measures to
elevate the importance of reputation
internally:
Assign ownership to senior executives
at the Board Level
Senior buy-in is crucial to drive
meaningful change across the
organization and earn credibility
externally. By assigning responsibility
to the board or a dedicated executive or
team, organizations are better geared
to approach reputation as a competitive
advantage.
Todays winning corporates and brands are
already inspiring young talent, benefiting
local communities, building a smarter
tomorrow, creating shared value and
committing to sustainability. Tomorrows
reputed organizations will be purpose-
led companies, good corporate citizens,
employers of choice and social squared
organizations.
We invite you to explore these ideas over the
next pages and to start a conversation with
us on how you can protect and project your
organizations reputation.
Reputation Journey:
The Now & The Next
Olivier Fleurot,
CEO,
MSLGROUP
Pascal Beucler,
SVP & Chief Strategy Officer,
MSLGROUP
Paulo Andreoli,
Chairman, Latin America,
MSLGROUP
The Reputation Journey:
What we can learn from the
financial services crisis
The Reputation Complex:
Seeking Sustainability
in a Liquid World
Reputation and
Corporate Image Today
VoLUME 3, IsSUE 1
If there is one industry that has seen its
reputation seriously damaged in the last
decade it is undoubtedly the financial
services sector. Dubbed the worst financial
crisis since 1929, the Eurozone was, as we
know, severely shaken with several countries
ultimately facing embarrassing bail outs from
international creditors.
OLIvier FLEuRot
cEO, MsLGRoUP
12
The Reputation Journey: What we can learn
from the fnancial services crisis
Financial services seemed
immune to failure
How did it all start? In the late 90s the economy was booming, liquidity
was abundant, and western banks were encouraging people to live the
American dream and borrow ever more money.
A few bells started to ring in 2000 and 2001 when the high-tech
bubble burst and the Enron scandal unravelled. But trust in the
financial world was so deeply rooted that people perceived these
events as nothing more than isolated instances.
Riding on the peoples trust and ambitions, bankers continued to
chase higher profits and to offer more sophisticated and riskier
products. Hollywood and the media were quick to sensationalize the
ambition, hunger and, at times, greed of Wall Street.
The financial industry began to be perceived as a stairway to wealth
an industry that was thought to be immune to failure. This perception
in turn attracted more and more investors and encouraged talented
people to join financial firms. Yet despite this vicious circle, a few lone
voices, mostly academics and analysts, began to warn that such growth
and expansion was simply not sustainable.
What finally made the bubble burst? In reality its impossible to
trace the cause of the crisis to any single event: experts often cite
deregulation, the rapid pace of innovation, lack of global regulation
and an industry-wide lack of accountability as critical factors.
REPUTATION JOURNEY | What we can learn from the financial services crisis
13
Trust vanishes: Reality goes beyond fiction in 2008
When the US housing bubble burst in 2007-08, trust in the financial world vanished. The extent of the damage
and the severity of the consequences were unprecedented and astonishing. Even worse: some banks and
institutions remained in denial and sought to hide the extent of potential losses.
In the five years that followed, we witnessed:
Bankruptcy
On both sides of the Atlantic, most notably
with Lehman Brothers going out of
business in the US.
Rebranding
Some banks changed their name to start
afresh (GMAC became Ally) or as a result
of being acquired (Northern Rock was
eventually absorbed by Virgin Money).
Penalties
The cost of the crisis in legal expenses and
settlement costs is still being paid one
settlement reached as much as $13 billion.
Customer defection
Customers shared their negative
experiences and organized events such as
Bank Transfer Day on social networks.
14
Dramatic loss of public trust
Although many perhaps couldnt understand
every single intricacy around financial
instruments, publics were certain that,
somehow, the financial world had betrayed
them. And their distrust extended beyond
the financial services industry, beyond rating
agencies and regulators, to the corporate
world as a whole.
Employee frustration
Dissatisfied employees too turned to
social networks, especially YouTube,
and news sites to share their stories.
Citizen activism
In 2011, young Spaniards launched the
Indignados movement, soon followed
by the global Occupy movement groups
founded to enable the free and broad
expression of peoples outrage at the
economic crisis and anger towards
national governments.
Nationalization, Bailouts and
Forced Mergers
Central banks in the US and Europe injected
hundreds of billions into the system. They
nationalized and bailed out institutions and
orchestrated mergers to keep weak players
afloat. Governments in Asia too announced
large stimulus packages to offer some
stability to the system.
15
16
Rebuilding reputation
will take time
While trust in the financial industry has
improved since 2008, it remains lower
than in other industries and continues to
fluctuate, in response to post-crisis evidence
of misbehaviour and the emergence of new
scandals (such as the manipulation of interest
rates). The debate around executive pay and
bonuses still rumbles on in many countries,
especially in markets where taxpayers money
was used to bail out financial companies.
As we know, it can take years, at times
decades, for a company to build a good
reputation, and only a few days to destroy
it. The challenge of restoring trust and
good faith is made more complicated by
the challenge of communicating in the
information age.
People expect companies to engage in
two-way dialog in real-time and be consistent
across geographies. Beyond this, people
demand that companies look out for
all stakeholders and respect the larger
ecosystem in which they operate.
Becoming a genuine partner for entrepreneurs
Some banks launched efforts both short and long term to support local
businesses and entrepreneurs.
Over the last few years, banks have delivered on these expectations with initiatives that combine
Purpose, Participation, Performance and Sustainability. This meant
Innovation
Challenges
Citi partnered with
NBCs Education
Nations Innovation
Challenge to fund entrepreneurs in
the education space.
Support
Communities
American Express launched
the online community OPEN Forum, which
offers a wealth of business advice and connects
small business customers.
Australias Bendigo Bank
launched the PlanBig
platform to help
entrepreneurs achieve
their goals.
Change
Movements
Crowdsourcing
Campaigns
American Express
kickstarted
the Small Business
Saturday movement,
to encourage Americans,
and recently the British, to shop at small
stores during the holiday season.
KBC Bank launched
The Gap in the Market
to crowdsource business
opportunities across Belgium.
17
Giving people a bigger say in citizenship programs
Some banks invited people to decide which organizations,
charities and even national monuments would receive the
largest share of funding.
Re-defining banking together
A number of banks engaged customers and students in
conversations and initiatives to build a better system.
American Express launched
Members Project to let
customers make a difference
through votes, volunteer hours or
donation of their AmEx
members points.
Chase launched Chase
Community Giving to let
people decide which charities
would get the biggest share of
grant money.
Barclays introduced a
new co-created
credit card,
Barclaycard Ring, to
give the community a
say in the cards fees,
policies and rewards.
ING launched Next Generation
Banking to challenge the
bankers of tomorrow to
envision the future of banking.
Even former RBS chief Stephen
Hester engaged students at LSE
in a candid discussion about
Rebuilding Banking.
Video: World Economic Forum 2014: Pierre Goad
18
And, simply communicating better or differently.
Several banks embraced new media to encourage financial literacy and differentiate
themselves from the bad banks.
In the last eighteen months, some banks have
indeed begun to successfully differentiate
themselves from the category and stand out.
As HSBCs co-head of global communications
Pierre Goad shares, it is now a priority for
these institutions to actively improve their
reputation and manage reputational
issues early on.
Financial
Literacy
US Bank
encouraged
teenagers to create
videos about the value of saving.
The winning video - a rap video titled
Dont forget bout ya debt!
Humility
AIG used video infographics to
communicate its Turnaround Story
and announce that it had repaid its
bailout in full. AIG followed this with
the film Thank You America -
albeit to mixed response. Solidarity
Deutsche Bank
expressed its
solidarity with
customers against
unnecessary bank fees with a
tongue-in-cheek video You wouldnt
accept it from your supermarket.
WEF 2014: Sir Richard Branson and Arianna
Huffington talk about Plan B
19
A purpose-driven
tomorrow
Increasingly, companies are embracing
concepts of sustainable growth and corporate
citizenship because they are indispensable
to attracting and retaining talent and because
they can also be good for business.
We are also seeing leaders make the case
for purpose-driven business (The Stengel
50) and partner with organizations and other
corporates to reinvent the way we do business
(Plan B). Indeed, this was the central theme
at the recent World Economic Forum at Davos
- Reshaping the World: Consequences for
Society, Politics and Business.
For banks, financial institutions and other
companies to recover, maintain and
build good reputations, we believe they
must implement six actions across the
organization, at all tiers and locations:
1. Establish a shared purpose
Identify a core purpose that drives the
organization and its people, and align
programs and strategies around this
shared heartbeat.
2. Co-create the future
Engage customers and other
stakeholders in helping defining the
organizations policies, services and
corporate citizenship actions.
3. Lead the dialogue
Harness social, digital and other media
to lead, or at least contribute to the
continual dialogue around issues that
are important to customers.
4. Win over influencers
Demonstrate new priorities through bold
outreach to influencers, governments
and media.
5. Minimize risks
Anticipate and plan for issues that
may still negatively impact the
organizations reputation.
6. Empower employees
Amplify good news by encouraging
employees to be strong ambassadors for
the good work the organization is doing.
These actions are not easy and transformation
will not happen overnight. But over the
long term, they will help safeguard a
companys reputation and re-gain the
loyalty of stakeholders.
As Warren Buffett said,
If you lose money for the company, Ill be
understanding. If you lose a shred of the
companys reputation, Ill be ruthless.


PaScal BEUcler
Here are some tricky questions
our clients are dealing with today,
particularly at the C-Suite level:
What is the link between Business and
Reputation today? What is the value of
Corporate Reputation (the one of the firm,
not just of its brands, services & products),
whether in a B2C or B2B context?
Why and how is the Digital & Social
turmoil changing the whole game?
Why should we address
reputational issues
versus all stakeholders,
not just shareholders
but also customers of
course, employees and
partners, people and
communities?
Why is investing in Corporate
Citizenship critical today, from a
Reputation Management standpoint?
Is a silent firm
always defined
by others?
Why are silence or
secrecy not sustainable
options anymore?
sVP & ChiEF StRategY OfFiCer, MsLGRoUP
20
The Reputation Complex:
Seeking Sustainability in a Liquid World
21
The following analysis examines why reputation management is such a challenge in a world where transparency
is mandatory, social engagement is required, corporate citizenship is highly expected and content is king.
Corporate Reputation
is what supports
Corporate Equity
Basically, thats what we mean with the
concept of Reputation Complex and the
way we define it:
The Reputation Complex is a moving
combination of various reputational
factors, components and drivers that
are linked in a close and complicated
way. This combination brings with it,
for all organizations, equal risks and
opportunities the first to be managed
and the second to be exploited in
the right manner.
From this standpoint, Reputation
Management is probably today the most
demanding of our Global PR Practices, at the
intersection of Corporate & Brand Citizenship,
Financial Communications, Public Affairs,
Digital & Social and the Employee Practice.
As a matter of fact, Corporate Reputation
protects a companys equity, plays a growing
role in investors eye, and strengthens
customers confidence in a firms products
and services. In fact, checking whos behind
the brand/the product/the service who
owns it? is a fast-growing trend.
Corporate Reputation also nurtures key
opinion leaders appreciation, attracts the
best partners and helps recruit and retain
the best talents.
In a nutshell, Corporate Reputation is
cornerstone for all businesses. And, lets
make this clear: Reputation is not fame,
admiration, image or esteem all of these
can generate a positive halo, but none of
them is a founding factor. Lets not mistake
the effect for the cause.
Last, contemporary Corporate Reputation is
not based only on cold analysis, rationale
and reason; its also linked to emotional
attributes, perceptions and empathy, all
of which are key drivers a genuine societal
commitment can help create.
REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
VoLUME 3, IsSUE 1
22
A fast-changing
ecosystem
Key attributes such as long-term investment
value, quality of products and services, and
financial soundness have been utilized year
after year by various rating systems asking
professional panels to evaluate firms on
X-point scales.
Thats for sure essential, but such classical,
endogamic and coefficient centric
approaches do not suffice anymore in a
world where ethics as well as the nature and
the level of engagement with people and
communities are cornerstone.
Corporate Reputation needs to be seen
through a different lens, with a much wider
focus and mind-set.
Who doesnt see the terrible consequences
of the various scandals and crises the past
decade produced, starting with the Enron
earthquake and continuing today with the
2008-10 Wall Street Big One and post
crisis tremors? Each and every survey in the
Lair du temps: seen in a restaurant in
Berlin, January 23rd, 2014
past decade has described a very unfriendly,
suspicious, negative environment, with
unprecedented levels of public distrust
and anger.
Trust in all institutions, including corporations
and governments, remains at an all-time
low across the world, and this is worrying.
And its no surprise that the Financial
Planet continues to suffer from the poorest
reputation of all business sectors.
The age of low predictability
Liable to change rapidly, a Corporate Reputation is a composite of diverse and highly volatile
perceptions and emissions most of which being hard to manage:
Few years ago, Reputation was a somewhat elusive intangible asset, in the hands of a small number of selected gatekeepers. Today, with the
explosion of social media, reputation can be enhanced or damaged in the blink of an eye. Most corporations are in the risk zone, where a low level
of public trust meets a high level of peoples empowerment. And this is exactly why every Reputation issue is potentially Global, Social, Viral.
23
Its mostly out of control
of all the communications about an organization, very few
are within control today.
The comment is the message
be it employees or external stakeholders, people are generating far more
content about an organization than can be created by the organization itself.
We may like it or not, but its just what it is
some of the messages are positive, some of them are negative,
but together, it all reflects a firms or a brands reputation.
VoLUME 3, IsSUE 1
Reputation as the #1 Risk in 2013
Changing perspectives is always a little slow, naturally, but the latest
Exploring Strategic Risk joint study by Deloitte & Forbes Insights
shows an impressive evolution over the past three years,
with Reputation rising to become the #1 Risk in 2013:
The Exploring Strategic Risk global survey included more than 300 respondents from the
Americas, EMEA, and Asia-Pacific. Nearly all respondents were C-level executives (263), board
members (22) or other risk executives (21). Surveyed companies came from all five major
industry sectors (consumer/industrial products, life sciences/health care, technology/media/
telecommunications, energy and financial services), and all had annual revenues in excess of
US$1 billion (or the equivalent).
Three years ago, reputation was already the top risk area in financial
services and remains so today. Now, reputation is rated as the highest
impact risk area not just overall, but for most individual sectors as well.
24
Why all of a sudden?
Social technologies are one of the main factors driving rising concerns
about reputation. Given the speed and global reach of social media,
companies today are losing control over how they are perceived
in the marketplace.
One of the big changes in recent years is speed to market.
As a consequence of social media, reputations built up over
decades can be challenged in an instant. Customers are able
to make decisions on an organization based on social media
comment, potentially well before your ability to be able to defend
or articulate a response.
- ANZs Jennifer Evans (Banking & Financal Products)
it takES 20 yEarS to Build A
RePutAtion AnD Five MinutEs to
Ruin It. if yOu Think aBoUT thaT
yOuLl do thinGs diFfErEntLy.
WaRrEn BUFfEtt
Q. Which of the following risk areas have the most
impact on your business strategy (three years ago,
today, and three years from now)?
41% | Brand
28% | Economic trends
26% | Reputation
2016 Today 2010
29% | Economic trends
26% | Business model
24% | Reputation -
Competition
40% | Reputation
32% | Business model
27% | Economic trends -
Competition
The post-disintermediation Age:
Reputation Management in times of Social Guerrilla
As the Deloitte-Forbes research clearly shows, reputation risk is now the biggest concern, due in large measure to the rise of social media.
Social media enables instantaneous global interactions that make it impossible for organizations to control the on-going conversation
about them, and the impact on their reputation.
This is true everywhere and for every organization, as shown in recent examples where public authorities were targeted
by citizens and forced to take action. Such viral initiatives are the New Normal today, and they prove to be very effective.
25
We clearly see a double move here:
From Influence to Engagement:
Influencing influencers silently, secretly, behind the scenes, has been the norm
for decades, and it still works in specific contexts. But its far from enough today:
in all industries and everywhere, disintermediation is rapidly, and profoundly,
changing the rules of the game.
Brokerage based businesses are all potentially under threat. Gatekeepers and
barriers are vanishing, while people use the boundless power of social media
to raise their voice and be heard by the decision-makers, be they politicians or
business executives.
1
From Public Affairs to Peoples Affairs:
Leaders whether politicians or business execs - are put directly under peoples
heavy pressure through Twitter, Facebook or YouTube.
Within days, sometimes hours, they have to cancel an initiative, abandon a
controversial project or quickly act to address a pressing public demand.
2
AOLs CEO Tim Armstrong
reversed a change in
policy following employee &
media backlash
(via washingtonpost.com)
Dutch Parliament intervened to
ensure a subsidy was provided
to the Metropole Orchestra after
the popularity of the Metropole
Tweetphony campaign
Russian politicians fixed city
potholes after a social guerrilla
campaign by news site Ura.ru
(Make the Politicians Work)
#TweetsFromTheDeep is another great example of
Social Guerrilla in the area of public affairs.
What would you do to help defend UK fishermen,
under permanent scrutiny for their alleged
exploitation of the seas resources: classical media
relations? It may not bring much attention from the
audience you wish to engage with. An ad campaign
in mainstream media? It will be a bit costly for a
professional association and, again, it wont be
authentic, genuinely human-based, it will just be
one point of view versus the other.
Heres what the National Federation of Fishermens
Organization did: give a fisherman access to their
Twitter account and let him tell his own story
himself, from deep in the ocean, with his own words
and tone of voice. Much more efficient. Brilliant!
26
Video: The NFFO Fisherman David Warwick
sends Tweets from the Deep
Whether it is a real world crisis (catastrophe,
sex scandal, oil spill) or a flash mob of
activism generated online (Greenpeace
vs. KitKat), the news curve and the crisis
curve are closely linked, and Social Media
is spreading the blame game at a very high
speed. The Bank of America case is a very
insightful one, as Nidhi Makhija demonstrates
in this report (see Page 74).
From low intensity controversies to high intensity crises: Reputation is at stake
27
Social Medias impact on share prices is
critical too, particularly since the SEC ruled
in April 2013 that companies can disclose
important information on social media
accounts as long as they alert investors in
advance of which platforms and accounts
they will use. Now, in addition to spontaneous
celebrity social endorsements (Oprahs
$150mn tweet), companies & executives
social media posts are impacting stock price
and movement.
For instance, Netflix CEOs Facebook post
sparked a 13% rally in Netflix shares, sparked
an SEC investigation and resulted in a new
regulation allowing companies to make
announcements through social media. A
hackers tweet from the AP account, that
President Obama was injured in a White
House explosion, erased $200 billion from
US stock market for six minutes in April 2013.
Analysts blame algorithm trading systems
that scan news and social conversations for
the temporary drop.
Oprahs spontaneous tweet &
instagram generated
and boosted Groupe SEBs
market capitalization by
1 mn tweets -
$150 m
27
VoLUME 3, IsSUE 1
The Reputation Complex: articulating Content & Engagement, to hit the sweet spot
Building and managing a reputation today is firstly building and managing a content strategy, then rightly
engaging around it with all relevant audiences.
What do you stand for as a firm?
Whats your purpose?
Does your Corporate Governance meet todays societal
expectations: ethics, quality of leadership, social
responsibility and diversity?
Is your business performance sustainable?
Whats the social impact of your business on people,
communities and society at large?
What does your Corporate Citizenship consist of?
Are you an Employer of Choice?
CONTENT ENGAGEMENT
Content is King, and it all starts
by defining and expressing
the fundamentals of every
organizations core strategy:
Its then about rightly engaging
with all stakeholders:
28
How can Communications better shape & share the story
about the firms history, legacy and strategy both
internally and externally?
Beyond the Investors Day, the priority is to craft a narrative
architecture to help larger audiences understand where the
company comes from and what it stands for.
Why sustainability, value creation and innovation are
key pillars to its success?
How the firm, wherever it is on Earth, is committed to
developing close links with people and communities?
Why building a strong Employer Value Proposition is
crucial for today and tomorrow?
Over the past few years, some companies (from IBM to PwC) which happened to be at stake did better than others, because they better
managed what they wanted to focus on (content), and because the way they engaged with people was superior (relationship).
The Reputation Complex is thus a system of different levels and dimensions, as well as an on-going & iterative process with no beginning
and no end, blending beliefs, perceptions and representations, all based on a firms global behaviour. Helping our clients navigate the blur
and manage complexity is our main task today in the fast-changing world of PR People Relations.
Before being good or bad and moving from one state to the other doesnt have to take very much time a reputation firstly is:
A firms resistance, and potential resilience, very much depends upon these four points, when its reputation is at stake.
IBM announced its ambition
to create a Smarter Planet and
involved people, innovators
and local leaders in its mission
(People for a Smarter Planet
community, Smarter
Cities Challenge),
PwC appointed a head
of reputation to mend its
relationship with regulators,
and is positioning itself as
part of the conversation
around building trust
(Inspiring Trust report),
Coherent, or not,
with what a firm
actually is about,
and stands for
Consistent, or not,
with its core beliefs
and values
Solidly grounded,
or not, into a well-
told story
Managed, or
not, properly
2 1 3 4
29 29
From Philanthropy & CSR to Corporate Citizenship
This was again, over-demonstrated few weeks ago at the 2014 World Economic Forum in Davos.
To reset the worlds economy, restore some
sort of public confidence in the world of
business - particularly in the Financial sector,
as we see it - many top leaders highlighted
the fact that corporations need to speak
and act as Good Corporate Citizens. Such a
movement is here to stay, and its a growing
concern for all stakeholders.
As Unilever CEO Paul Polman loudly
claimed in Davos: You dont get attacked
for doing the right things! Polman claimed
that if profits were necessary, they shouldnt
be placed above purpose. He also claimed
that Unilever had a moral obligation to
help address the worlds problems: If we
dont work in transparency, we undermine
trust. He admitted that this was not an easy
transition for companies to make: To get
these values into the company is awfully hard
work and takes a long time.
However, he used the example of Edward
Snowden to highlight what can go wrong
when companies come under attack in an
environment where individuals can put
you out of business.
This is the dominant trend today.
Philanthropy was the norm: giving back
discretely and without necessary links
between the business and the causes the
firm was supporting. Citizenship is the
new normal: its about putting the firms
Citizenship engagement at the heart of its
purpose and business strategy.
30
When the winds of change blow,
some people build walls and others
build windmills.
- a Chinese saying
31
VoLUME 3, IsSUE 1
Purpose Led Company
Reputation Complex
Employer of Choice
Corporate Citizen
Social Squared Body
At this point, in most markets and industries, it
seems that the protection mindset is more
widespread than the projection one. It is our
mission to help our clients go for the windmill
option, as projection is the key for building a
sustainable Reputation in the liquid age.
The windmill will create a lot of value, if
corporations are genuinely purpose-led, acting
as respected Corporate Citizens and being
seen as proven Employers of Choice, and if
they behave as well-connected and
fully-engaged organizations.
And by the way, lets remember that Purpose
and Propose have the same etymology:
a company with a solid Reputation is thus the one
which has a relevant purpose, translating into a
robust value proposition for all stakeholders.
32
So, should we build walls, or windmills?
32
At the dawn of capitalism half a millennium
ago, a businesss reputation depended
on the skill of its owner to display himself
in mansions designed by the foremost
architects, where he received people in
Faustian style under the gaze of family
portraits, preferably signed by great masters.
Corporate image in the mid-16th century
changed in direct proportion to luxury,
in a figurative attempt to use abundance
as a means of facing down any economic
catastrophe. And the method made sense,
because high risk businesses trade, banking
or manufacturing could keel over at a
moments notice as they suffered the side
effect of long-running and inconclusive wars,
plagues, piracy or the planned bankruptcy of
monarchs who underwrote bills of exchange
with no backing in order to patch up their
royal coffers.
PauLO anDrEoLI
ChAiRman, latiN amErica,
MsLGRoUP
Origins of Corporate Image
REPUTATION JOURNEY | Reputation and Corporate Image Today
33
Reputation and Corporate
Image Today
Human intuition has always defined social hierarchy
through material possessions. With the triumph of capitalism,
respect also became a major factor and rapidly
grew in importance as trade expanded and the Industrial
Revolution and globalization came about.
Sumptuous pomp as a seal of legitimacy was
the driving idea that had developed through
the Middle Ages and had its roots as far back as
the Greek and Roman empires. Ostentatious
symbolism was so deeply rooted that Europe
embraced it, setting aside the modesty and
charity it preached.
Human intuition has always defined social
hierarchy through material possessions. With
the triumph of capitalism, respect also became
a major factor and rapidly grew in importance as
trade expanded and the Industrial Revolution and
globalization came about.
34
From healthy balance-
sheets to Doing the
Right Thing
However, a sudden and important change
recently occurred; this change became
increasingly clear during the last decade of
the past century when competition broke out
of national boundaries and gave consumers
an increasing number of choices and when
faced with products or services presenting
similar attributes, these consumers are
showing a growing disposition to select the
supplier who does the right thing.
The result of this outpouring of citizenship
is the profusion of vegetables grown
without pesticides, organic wines, veal
from cattle slaughtered painlessly, lead-
free lipstick, the launch of hybrid cars,
green banks, delivery systems which pay
fines if deliveries are delayed as well as
investment funds which only purchase
stock in companies that do not use child
labour among many other examples of
the imaginative methods used to tug on a
customers heartstrings.
In the wake of this crusade, the number of
executives responsible for Sustainability has
multiplied. These executives report directly
to the CEO and their actions are specifically
targeted at increasing the companys
reputation (and bottom-line) by giving their
full attention to a wide variety of interests
intertwined with their everyday business
activities. Initiatives and other measures
along these lines have inspired corporate
communications, which have sought to
nurture empathy and engagement.
In the 21
st
century, modesty and good
behaviour now rival healthy balance
sheets as a means of developing a strong
reputation, part of an attempt to draw a
dualistic and implausible contrast with
direct competitors who hesitate to
adopt the same approach.
35
36
Challenges of this new approach
Companies that decide to take this approach face at least two challenges.
A commonplace one is that every prosperous and
long-lasting company must adopt best practices,
pay its bills on time, comply with regulations, be
ethical, respect their employees, provide their
shareholders with adequate returns and take their
customers opinion seriously basically, doing
the right thing, just without the quotation marks.
For a company like this, a flashy Sustainability
Department is simply redundancy; or rather, a
modern variation of the luxury that primitive
capitalism used to communicate solidity.
The second problem is a subtler one.
It is born out of the investment needed
to confirm that the Sustainability area
has an important and powerful role to play in
crucial company decisions. We used to have
just Social Responsibility, now we also have
Sustainability. Company executives are finding
themselves increasingly compelled to incorporate
new practices, which are actually nothing more
than simply doing the right thing an inherent
value for all successful companies.
37
The speed with which information spreads
over social infrastructure has made
companies vulnerable and managers need to
be constantly aware of what their companies
are doing and how the public perceives their
products and services. They need to realize
that online interaction will be a benefit but
also that public exposure from which they
will not be able to hide will make them
more vulnerable. Being present is no longer
a choice but a reality.
Reputation has become an asset which is
at the same time essential for success
and also the greatest threat to that
success one more challenge for
managers who, until recently, needed
only to concentrate on producing healthy
financial performance indicators.
Today, an attitude or a gesture by an irritable
employee can undermine several years of
positive reputation and can have a direct
effect on the companys results and the way
it is perceived. Crisis management processes
are now online and a component of strategic
business management.
Like marketing, corporate communications
will increasingly depend on more accurate
information and analysis. This means that
the challenge is to anticipate trends based
on Big Data and depends on our ability
to interpret the collective unconscious
and provide companies with guidance
when taking decisions.
Every companys sales, products,
human resources and corporate image
face highs and lows. In the real world,
business brings with it unexpected
fluctuations. This makes it all the more
important to keep doing and
re-defining the right thing.
38
39
CliCK to ShaRE
Walk the talk:
The need for Rational
and Long-lasting Action
The era of institutional hypocrisy has
ended. There is little point sponsoring a
film, a winning team, spending millions on
advertising if, for example, social media
challenges the poorly managed acquisition
of a foreign oil refinery. The worst type
of problem for a companys reputation is
caused by incorrectly defining its objectives
and the way in which this message will
be translated into a language capable of
expressing it to non-specialists.
For example, if oil begins its life as a
pollutant, anyone who works with oil runs
an inordinate risk if they try and present
themselves as a producer of clean energy.
Companies that make statements in
an attempt to change the facts are only
creating problems for themselves. It is
surprising to see so many capable people
being tripped up by this approach, because
500 years of experience should by now have
taught business managers how to build
value and generate results through rational
and long-lasting action.
These experiences clearly showed that
a companys reputation has intrinsic
weaknesses tied to its business, it can be
affected by natural disasters, by a poorly
concluded transaction, by a gesture, an
attitude and when hypocritical and/or
prideful statements are laid bare,
often at great cost.
This does not mean that corporate image
only comes in two colours: black or white,
without any grey. Legitimacy is a long-
lasting asset, it can stand up to abuse and
can be restored provided that every negative
experience is treated transparently, openly,
intelligently and with great professionalism.
39
Todays Stakeholders:
Demanding but open
to collaboration
Your Corporate & Brand
Reputation is Now in the
Hands of Millennials
is about Building from
the Inside Out
Reputation Building by
Influencer Collaboration
Scott Beaudoin,
Global Practice Director,
Corporate & Brand Citizenship/
PurPle, MSLGROUP
Jason Frank and Brian Burgess
Global Co-leaders,
Employee Practice,
MSLGROUP
Martin Dohmen,
Germany Director, Corporate &
Brand Citizenship/PurPle,
and Chief Strategy Officer,
MSL Germany
VoLUME 3, IsSUE 1
ScotT BEAuDoiN
GLObal PrActicE DiReCtor, CoRpOratE &
BranD CiTizenshIP/PUrPLe,
MsLGRoUP
For companies to win in the new reputation
economy, they need people to believe in
what they stand for and engage them in
their citizenship efforts. That is never truer
than it is with todays Millennials who will be
roughly 75% of the global workforce by 2030.
Millennials are not only our current and future
employees (and bosses) but they are our
current and future customers. Understanding
their personal views and ideals will be the
only critical way to help us manage corporate
reputation now and well into the future.
42
Your Corporate & Brand
Reputation is Now in the Hands
of Millennials
While most Millennials (74%) believe business is having a
positive impact on society, by generating jobs (48%) and
increasing prosperity (71%), they think business can do
much more to address societys challenges.
What Millennials Want
and Expect
According to Deloittes third annual Millennial
Survey, while most Millennials (74%)
believe business is having a positive impact
on society, by generating jobs (48%) and
increasing prosperity (71%), they think
business can do much more to address
societys challenges in the areas of most
concern: resource scarcity (68%), climate
change (65%) and income equality (64%).
Additionally, 50% of Millennials surveyed want
to work for a business with ethical practices.
TODAYS STAKEHOLDERS | Your Corporate & Brand Reputation is Now in the Hands of Millennials
43
Deloittes third annual Millennial Survey surveyed nearly 7,800
Millennials from 28 countries across Western Europe, North America,
Latin America, BRICS and Asia-Pacific about business, government
and innovation. The questionnaire focused on the role business plays
in society; its objectives, impact and outcomes; the responsibility
of business and government and how well each is addressing the
challenges faced by society.
Deloittes Millennial Survey also found that Millennials are eager
to make a difference. Millennials believe the success of a business
should be measured in terms of more than just its financial
performance, with a focus on improving society among the most
important things it should seek to achieve. Millennials are also
charitable and keen to participate in public life: 63% of
Millennials donate to charities, 43 percent actively volunteer
or are a member of a community organization, and 52%
have signed petitions.
This intersection of Millennials expectations and their eagerness
to make a difference provides an opportunity for companies and
brands if they are smart enough to seize it. You dont have to look
far to find some companies already maximizing this opportunity and
a closer look will show you that these are the companies and brands
whose reputations are benefiting from it.
60%
40%
The study discovered that peoples willingness to buy,
recommend, work for, and invest in a company is driven 60%
by their perceptions of the company
And only 40% by their perceptions of the products
44
Three of the seven dimensions that drive reputation (citizenship, governance, and workplace)
fall into the CSR categoryand analysis shows that 42% of how people feel about a company
is based on their perceptions of the firms corporate social responsibility practices.
In June of 2013, Reputation Institute, a
private global consulting firm based in
New York, invited about 47,000 consumers
across 15 markets to participate in a study
that ranked the worlds 100 most reputable
companiesall multinational businesses with
a global presence. In addition to finding the
companies with the best reputations,
the study discovered that peoples
willingness to buy, recommend, work for,
and invest in a company is driven 60% by
their perceptions of the company, and only
40% by their perceptions of the products,
says Kasper Ulf Nielsen, Reputation
Institutes executive partner.
Each company earned a RepTrak Pulse
score representing an average measure of
peoples feelings for it. The scores were
statistically derived from four emotional
indicators: trust, esteem, admiration, and
good feeling. Reputation Institute then
analyzed what it calls the seven dimensions
of corporate reputation, including
workplace, governance, citizenship, financial
performance, leadership, products and
services, and innovation.
45
It turns out the corporation with the very best CSR reputation is Microsoft,
the Washington state-based software giant. Being a responsible global
corporate citizen is a commitment made at all levels of Microsoft.
Its not a top-down effort, but rather bottom-up.
Its a testament to the companys worldwide employees and the
difference they are making in their local communities. While the
company has a small citizenship team at the corporate level, they
have citizenship champions across the globe and they work daily in
collaboration with a wide range of stakeholders on a range of issues
important to local communities.
In September 2012, Microsoft refocused much of their efforts around
creating opportunities for youth by launching Microsoft YouthSpark,
a major initiative to connect hundreds of millions of youth with
opportunities for education, employment and entrepreneurship.
The company is working to bridge the opportunity divide that
separates youth who have opportunities from those who dont, with
the goal of helping young people secure their individual futures and
also the future of society.
Most reputable corporates & brands:
46
Most reputable
corporates & brands:
Google is also at the top of the list and
continues to be seen as the best company to
work for in the world.
Googles strong workplace perception helps
secure its strong reputation overall and
within CSR.
In the Reputation Institutes study, fifty
percent of consumers across the 15 countries
say they definitely think that Google treats its
employees fairly and takes their well being
into consideration.
Google knows how to put caring in the hands
of the younger generation. Google China
Social Innovation Cup for College Students
is a nationwide competition that aims to
empower Chinas youth to become agents of
social change.
By soliciting project ideas from college
students and funding viable proposals, the
company hopes to instill in Chinas future
leaders the values of social responsibility,
the importance of community welfare, and
the spirit of self-empowerment. Among all
colleges and universities that participate
in the competition, the 100 that top in the
number of proposal submission will share
500 Google Campus Volunteer Stars
Scholarships every year.
47
48
a sense of fulfillment. So why would we put our companys
reputation in their hands? Its easy. They have the potential to be a
companys most ardent supporter and their voices are heard and
their messages will travel.
Creating opportunities for Millennials to engage in social
purpose is critical.
This could be anything from surveying employees on where to
donate a portion of the companys charitable funds to creating a
volunteer program. Millennials are already open to engaging with
brands and look for purposeful work. Its time to start leveraging
their potential and incorporating employees into the planning and
implementation of purpose goals.
With research indicating that 88 percent of Millennials make
employment choices based on a companys CSR values and 86
percent consider leaving a company if its Corporate Citizenship
values no longer met expectations, its clear that to lead in the new
reputation economy, businesses must have strong voices when it
comes to their values and initiatives. The impact of citizenship on the
future of reputation is crystal clear.
Engaging Millennials around Social Purpose
End of Trust
Rise of
Shared value
Quest for
meaning
Power to
people
The Millennial generation has a reputation of being entitled, but this
is part of the result of their desire to engage with the world around
them. They feel responsible to themselves, their neighbors, their
communities and the planet. They grew up learning that their
actions directly affect the world around them. In return, they believe
companies should act the same way.
The tension lies in the fact that Millennials are notorious for having
high employee turnover rate, particularly if their job does not provide
49
The human truth
beyond the theory
Youve managed people, and led them
so have we. We dont need convincing of
the impact of employee engagement
because we experience it first hand almost
every day. Forget the terse business
definitions, you can see engagement in
someones eyes, their body language, the
things they say; and you can measure it in
anything from their attendance record to
their sales figures.
These tangible outcomes of employee
engagement have equally tangible
implications for corporate reputations.
As shared personal experiences become
the dominant currency of reputation, so the
shared experiences of employees, and the
people they interact with, continue
to grow in value.
The Future of Reputation is about
Building from the Inside Out
JasoN FranK & BrIan bUrGeSS
GLObal Co-lEadERS, EmPlOyEE PrActice, MsLGRoUP
TODAYS STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
Take just one large cross-industry survey from
the US (TARP), which suggests that almost
70% of customers who leave a business
or brand will do so because of a negative
experience with one of their employees
not for a lower price or better product.
In our increasingly knowledge and service-
based economies were moving quickly
from valuing our peoples IQ to their
Emotional Quotient (EQ) and now their
Social Quotient (SQ).
Success is about how we do things, not
what we do. In that context the things your
people say and do define reputations more
and more - not least because their words and
actions can be amplified across global digital
networks of influence in an instant either by
them or someone else.
50
Unprecedented risk
and Opportunity
From the Goldman Sachs Vampire
Squid saga on one hand, to the famous
smiling service of Pret-a-Manger fast
food staff on the other, it doesnt take
a genius to appreciate the growing risk
and return that lies in taking employees
more and more seriously as builders or
destroyers of reputations.
So, what are the implications for
all of us? How do we as corporate
communicators harness the power of
employees to build credible, sustainable
reputations, and how do we mitigate
against the risks?
Here are five tips to help you ensure
that your employees become a force
for good in your on-going quest to
build and protect reputations in todays
conversation age.

Make Them Part
of The Plan
Think & Embrance
Networks
Re-prioritise to
Reflect The New
Normal
Unleash The Power of
Content & Influence
Cross The
Functional Divide
steps to success
in building
reputations from
the inside out
51
Too often we see corporate communications
briefs with employees identified as a
secondary audience, receiving little if any
strategic consideration.
Too many opportunities to add greater reach,
power and credibility to our communications
are being missed by thinking in traditional,
largely external broadcast terms.
Whether its from a risk mitigation point of
view, or a more positive standpoint, we need
to move employees up the priority list
when devising communications strategies.
Dependent on the nature of the challenge
any of the following questions can be useful
to ask: How would employees react to this?
The growing reputational power of the
employee is evident in the number of
Corporate Communications Directors
assuming responsibility for communicating
with employees. This makes sense, but
its incredibly important that Corporate
Communicators are in regular conversation
with HR and other employee specialists
How can they help us by validating this or
adding credibility in some way? How can
they help us to ensure that the messages
reach more people? How could they derail
this? It may be that when you ask yourself
these questions you draw a blank, but those
instances are becoming increasingly rare
for our clients.
within the organisation. The value of working
together goes both ways.
HR can provide employee insight
and expertise, whilst Corporate
Communications can bring their expertise
to support the function that has such
a profound impact on employee
engagement levels.
At the most basic level Corporate and more
HR focused employee communications
need to be planned in a coherent, joined-up
way to avoid contradictions, duplications
and wastage. At a more sophisticated level
the Corporate Communications Director
needs to be fully in tune with the Talent /
HR agenda (and vice-versa). Its essential
that Corporate Communications are in
tune with the ebbs and flows of employee
engagement whether thats through formal
annual employee surveys or more informal
observations and feedback.
The relationship and mutual support between
HR and Corporate Communications is more
fundamental than ever to the art and science
of building and managing reputations. Time
spent in making it work is time well invested.
52
Make them
part of
the plan
Cross the
functional
divide
As the power of almost every available
transmission mechanism for corporate
messages wanes, the importance of
personal networks and shared experiences
continues to grow.
The reputational mathematics are crude but
powerful. Take a global services organization
of 160,000 people, typically something
like 75,000 people would have left the
organization in the last three years. If we
take a conservative figure of just twenty
relevant people in each of the 235,000
past and present employees personal and
professional networks, we quickly come to a
direct tier 1 network figure of 4.7 million.
Moreover, the reality is that many of these
people move to the other side of the fence
and become clients or potential clients.
Its little wonder that many of the worlds
leading services organisations are investing
heavily in alumni programmes, designed
specifically to engage former employees,
maintain relationships, and build networks.
Above all this is an opportunity. With the right
content, education and simple software tools
we can massively enhance the reach and
credibility of our communications through our
employees networks.
Weve seen it first hand through our own
experiments with simple social media plans,
education and amplification tools a 140%
increase in website traffic in two weeks speaks
for itself. Were now doing it for clients.
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53
Think
& embrace
networks
Almost every single organization were
working with is grappling with the issue of
how they effectively and efficiently source,
curate, store and distribute compelling
content that will enable them to sustain
valuable and meaningful dialogue with
their stakeholders.
If organisations can create a culture that
empowers people to create content, by
making it easy and by rewarding it, the job of
corporate communicators will become that
much easier. So much time is wasted tracking
down great people and their stories.
Imagine having a culture where people were
queuing up to share their amazing personal
and professional stories with you adding
depth, credibility and emotion to your
corporate narrative and messages. If you
can go some way towards fostering that sort
of culture in a controlled and focused
way youll become so much more effective
and efficient in satisfying the insatiable
demand for conversation and content
from your audiences.
Every time we work with clients to tap into
the vast storytelling power of their employees
were amazed by what we bring to the surface.
If only that could be sustained the
practice of corporate reputation building
could be transformed.
The second part of this equation is identifying
and empowering the real influencers. One of
my social media experts sent me a fascinating
article just a few days ago. It told the story
of a major organization that had recently
conducted a social network analysis exercise
to identify which employees were most
influential who had the most social Klout.
Unsurprisingly the influencers werent at the
top of the organization.
The lesson for all of us is that lurking within
our organisations are people with huge
untapped potential to be really authentic
and powerful advocates and influencers.
Of course we need to be mindful of not
compromising their authenticity, and think
very carefully about how we can support their
activities, but what an exciting opportunity.
A call to arms
The relationship between employee
engagement and corporate reputation is a
massive topic and weve barely scratched
the surface but its importance is clearly
on the rise, and the possibilities are
largely untapped.
In a world where the corporate voice is
falling on deaf ears and where the grip
of traditional channels is weakening,
the imperative to tap into this massive
opportunity is growing every day. Which
brings us neatly to step 5:
54
Unleash the
power of content
& influence
In virtually every organization expenditure
and effort on communicating externally vastly
outstrips efforts focused on employees. But
all the advertising, glossy films, websites, and
corporate spin in the world cant paper
over the cracks of a bad customer
experience, or drown out the noise of
negativity from employees.
Our learning from experience is simple,
and it applies equally to the TV-obsessed
Marketing Director as it does to the Corporate
Communications Director:
If organisations re-oriented just a small
percentage of that external spend and effort
to engaging employees with their visions,
values, and purpose, then overall reputation
building efforts would be more effective
and ultimately less costly. And the effects of
higher engagement levels will be multiplied
if you can really empower your people to
share their stories and enthusiasm.
55
Re-prioritise to
reflect the new
normal
56
Reputation Building by Stakeholder
Collaboration
Numerous companies and brands have
recently recognized the sign of the times
and moved on to create a new dimension
of interaction with their external and
internal stakeholders.
New opportunities open up due to the arrival of
new media, channels and platforms as new
challenges arise in the wake of eroding trust,
and the growing demand for participation in
the always-on conversation economy.
Which are the key factors of success, then, in
turning corporate and brand relations into a
lasting and mutually beneficial stakeholder
engagement? What are the most promising
choices in setting up Purpose + People
programs meant to effectively involve
customers and consumers, employees and
influencers, thought leaders and citizens? How
to best establish communications platforms
and programs to add to an attractive citizen
brand profile? Who could be the audiences
participating in the evolution of corporate
and brand reputation - through sustained and
constructive dialogue, productive ideation and
sustained co-innovation?
MaRtin DoHmEn
GERmany DiReCtor, CoRpOratE
& BranD CiTizenshIP/PUrPLe,
& ChiEF StRategY OfFiCer,
mSl GERmany
57
The Why: stay close to
your brand purpose but
follow the conversation.
An inquiry into the purpose-related
communications of major global
companies like MSLGROUPs
PurPle (Purpose + People) Index reveals
that most key topics around which brands
choose to initiate a dialogue fall into four
categories: health, environment, education
or human potential. Ideally, a brand purpose
forms a bridge between the brands DNA
and its most significant overall promise to
stakeholders and society alike.
Hence, pharmaceutical firms like Janssen
tend to collaboratively address health issues,
a global energy player like Shell is most
credible as thought leader and conversation
host on energy matters etc. Increasingly,
reputation hinges on stakeholders trust
in a brands future ability to address, and
successfully cope with, upcoming demands,
challenges and opportunities. Beyond
competence and responsibility, this belief
makes a decisive difference in securing brand
competitiveness and appeal.
TODAYS STAKEHOLDERS | Reputation Building by Influencer Collaboration
Video: Future Influencers: Unlocking the Energy
Challenge
IBMs Smarter Cities initiative has been a
good example for a company focusing on a
future agenda outside of its comfort zone.
The Future Influencers think tank initiated
by Siemens equally proves that current
business and technological expertise can
be made to bear fruit in collaborating with
decision-makers and influencers on larger
topics, like urban mobility and urgent global
sustainability issues.
Remaining flexible matters too: if fracking
in the United States turns part of the
global energy agenda upside down, brands
should be willing to follow and inspire the
meandering energy conversation.
IBM challenged people to build a smarter planet
58
The What: if you are not
up for a long-runner,
do not start to walk
(and talk).
Format options for collaborations range from
open crowdsourcing of ideas to exclusive
conceptual debate and from controversial
dialogue to collective co-creation.
When teaming up with some of the most
imaginative and inventive talents and start-
up entrepreneurs, GEs Ecomagination
Challenge offers a model for collecting and
rewarding innovative (business) ideas. If the
aim is to empower consumers to co-direct
the brands cause-related engagement
activities, the Pepsi Refresh Project still offers
a bold pioneer model, even though it has not
been continued.
Open collaboration formats are challenging,
not only in keeping out non-productive
participants. It is by no means less complex to
initiate, manage and stimulate more exclusive
or closed collaboration communities.
A well-planned and intense moderation (with
24/7 capabilities) is key in an external debate
for ideation or concept development, as in
any advanced corporate social intranet drive.
59
60
The How: networking
and own visibility beat
platform technology as
attractors.
State-of-the-art multi-media event
experiences and digital collaborative tools
indeed make a big difference to create
attractive environments for advanced
interaction. Yet, communicators tend to
overrate the technological platform factor.
Experience indicates that a strong
conversational agenda fuelled by authentic
and engaging storytelling has a much
stronger effect in attracting audiences
to become initially involved in
collaborative communications.
A high-level peer-group offering new
networking opportunities beyond the actual
dialogue, a chance to personally contribute
to a ground-breaking content production,
exclusive access to brand ambassadors and
thought-leading personalities, and, last not
least, added visibility as opinion-leaders
and influencers. These are key benefits
potential collaborators will be looking for and
appreciate as the build-up and evolution
of the Future Influencers community
has demonstrated.
Monetary or commercial incentives are
also able to drive participation, especially
in idea competitions.
In the long run, however, the trust
and reputation brands can gain from
intensified, more direct communications
and relations with their stakeholders will
only come through benefits beyond money
and only with a credible commitment to
make purpose-related collaborations
last and grow.
61
The Who: talking with
my generation if it
has influence.
Some general learnings apply, regardless
of whether company managers or analysts,
employees or environmental activists, brand
followers or academic experts are to be
involved in a collaboration. Stakeholder
communications grow outside in: the 90
(invitees) / 9 (inactive members) / 1 (active
participant) community principle roughly
holds true.
This makes it necessary to initially address
a much larger group than the one the
collaboration is planned to be eventually
carried out with. At the same time,
community engagement grows inside out.
This makes it an imperative to nurture the
most active players in the conversation
- because they are the ones spreading
the collaborative impulse to non-active
collaborators and to larger audiences outside
of the collaboration.
The need for initial awareness and attention
makes it highly desirable for a brand to focus
collaborations on those parts of its audience
which have the biggest influence - be it
through their professional authority (and
publishing track record) on my topic or
through their social media clout. Whoever is
capable and likely to spread the news about
the collaboration and the brands role in it is a
relevant candidate.
Finally, external stakeholders and audiences
including critical institutions like NGOs and
citizen advocates - have repeatedly made
it clear that they are not shy about facing
companies and brands which explicitly follow
their respective business rationale. It makes
sense to plan for multi-party collaborations
involving managers and employees,
customers and consumers, experts and
candidates at the same time. A diverse mix
will not only make the collaboration more
colourful and inspiring beyond conventional
audience wisdom, it can also help to
create and amplify conversational and
reputational interplay, inside and outside of
the collaboration.
90
Invitees
9
inactive
1
active
62
Siemens Future Influencers
Future Influencers is an online
community initiated by Siemens as
a global and exclusive think tank
with more than 180 international
young thought leaders and it is still
growing. Everyone taking part must
demonstrate an expertise and passion
for sustainability subjects and possess a
strong digital presence.
In several collaborations per year, the
Future Influencers pitch ideas, discuss
them and evaluate the most promising
concepts. The creators of the best
ideas are invited to appear at, and
participate in, major global events
connected with Siemens, like the World
Climate Summits.
Project partners include the World
Resource Institute and the Harvard
Business Review. MSL Germany and
Publicis Munich are supporting Siemens
in managing collaborations and building
the community.
Return on Collaboration:
shared value + share
value
An authoritative set of Global KPIs for
collaborative stakeholder communications is
not yet available due to the early evolutionary
stage of the shared value paradigm.
Projects like Siemens Future Influencers
have produced some first insights on
the benefits for companies and brands
investing in long-term collaboration
platforms and programs.
Siemens Future Influencers Community
futureinfluencers.com
63
Learning from the Future Influencers initiative
Companies and brands can gain access
to real conversations not tainted or
distorted by push communications
and wishful thinking. They can gain
valuable insights and ideas not available
otherwise from more superficial forms of
interaction and dialogue.
Listen and learn.
Co-produce content. Share and enlarge visibility. Conversational conversion rate.
Connect and attract.
Gain access to top talent and
future decision-makers.
Debates, ideas, concepts, research,
positions, publications etc. whether as
direct community output or as a result of
a larger cooperation, well-planned and
thoroughly managed collaborations lead
to relevant, interesting data, stories and
intelligence. The co-produced content is an
excellent addition to corporate and brand
communications and content marketing.
Collaborations are about talking to each
other and, most of all, about working
together to co-produce results. The
higher the number of collaborators
involved in this kind of conversational
community building, the higher the
brand attraction.
Any high-quality collaboration is a
vehicle and booster to spread the news
on the brands thought-leading and
conversation-leading competence and
contributions. The traceable multiplier
effect created by the collaborators
indicates the collaborations relevance
and attractiveness.
The combination of all other effects
will lend to an enhanced reputation,
create an increased interest from target
audiences and, eventually, more leads
and demand.
As a sustained working relationship is
more reliable than mere followship,
the engagement created with present or
future high potentials, influencers, opinion-
leaders and decision-makers (internally
or externally) also leads to a competitive
advantage in brand reach and clout.
Reputation Management: From
Risk Mitigation to Competitive
Advantage
From Ignition to Recovery:
The Components of Todays Crises
Nidhi Makhija,
Senior Manager Insights,
MSLGROUP
The Evolving Role of the Board
in Reputation Management
Brad Wilks,
MD, Midwest, North America,
MSLGROUP
How to Manage Your Reputation
in the Social Age
Tap into Big Data: The Transcript
of your Reputation
Merrill Freund,
MD, San Francisco,
MSLGROUP
Frederike den Ottelander,
Head of Digital & Social,
Netherlands,
MSLGROUP
VoLUME 3, IsSUE 1
nidhI MaKhija
SENiOr MaNaGer - inSiGhts,
MsLGRoUP
From Ignition to Recovery:
The Components of Todays Reputation Crises
66
In our hyper-connected globalized world,
we are seeing that reputation crises have the
potential to grow faster, spread wider and hit
harder than any time before. There are two
simple reasons for this:
1) People are well-connected on social
platforms, and actively share information
and opinions with their networks in
real-time. Its easier for people to organize
themselves and apply pressure to both
regulators and companies.
2) Companies are larger and widely extended,
with suppliers, employees and customers
spread out across culturally diverse
regions. As a result, both products and
news extend over a wider geography at a
faster pace.
An analysis of recent corporate and
brand crises - events that were buzzing
in international news sites and social
conversations in the last two years provides
us with a broad idea of the issues that
stakeholders care most about today.
A look at recent brand crises reveals that people care most about
67
REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Todays Crises
FAULTY PRODUCTS
MISCONDUCT
LEADERSHIP
DATA SECURITY
COMPANYS CONDUCT ECONOMY ENVIRONMENT HUMAN RIGHTS
TAX AVOIDANCE
LOW WAGES/
UNPAID SALARIES
MAN-MADE
DISASTERS
EXPLOITATION
DISCRIMINATION
HIRING BIAS
A companys
conduct and
its impact on
the economy,
environment
and human
rights.
68
The majority of crises fall into this category,
as several brands struggled to deliver on their
basic offer (e.g. the horse-meat scandal that
affected food manufacturers in Europe), and
as several companies, leaders or employees
misbehaved (e.g. Lululemon CEOs
comments after the see-through yoga
pants scandal).
Today, people are holding brands to deliver
on the product offer (as we saw in China,
when a celebrity blogger smashed a defective
Siemens fridge), and they are expanding
their expectations to include data security
(as catalyzed both by the NSA-snooping
scandal and the Target security breach which
compromised payment details of 40 million
customers in the US).
People also expect more out of corporate
leaders, and are not shy of punishing the
organization for its leaders actions or
Companys Conduct: Before and After Crises
1
comments (as in the case of Barilla CEO,
whose anti-gay remarks on a local Italian
radio sparked a global boycott).
Regulators are becoming more demanding
as well, especially in the financial services
sector, and are raising the severity of fines to
match the scale of misconduct (as auditing
firms such as PwC and Deloitte are finding
in the UK, and banks such as JP Morgan and
Bank of America are finding in the US).
69
Companys conduct
Armstrong doping
scandal
Cyclist Lance
Armstrongs doping
confession led to a drop
in support for his
charity Livestrong and
an end to its
partnership with Nike
See-through pants
Lululemons black
yoga pants were
recalled for being too
sheer and its CEO
was ousted for later
pushing the blame on
unfit customers
Security breach
Targets data security
was breached by hackers
over 19 days; credit and
debit card information of
40 million US
customers were stolen
Loan modification delays
Bank of Americas home
loan modification delays
came under the
regulatory scanner as
customers and employees
alleged that the delays
were intentional
Jimmy Savile sexual abuse scandal
BBCs decision to shelve a report about
their late employees criminal past led to
the organizations worst crisis in 50 years
and resignation of its Director General
Horse-meat scandal
Traces of horse-meat
appeared in beef products
in the UK, France and
Sweden, enraging the
public and regulators
Anti-gay comment
Barilla chairmans comment
that he would never feature a
same-sex couple in his ads
sparked a boycott and backlash
in several countries
Defective fridges
Siemens inaction to
address complaints
inspired a Chinese
internet-celebrity to
smash a fridge outside the
companys HQ in Beijing
Astroturfing
Samsung was fined by
regulators for posting
fake reviews and
comments against
competitors
Cruise mishaps
Carnivals safety record took a
hit as the Costa Concordia
sank, killing 32, and Carnival
Triumph suffered from an
engine failure the next year
Auditing failures
PwC and the Big 4 face
increasing pressure and
larger penalties from UK
regulators for their
broader role in the
financial crises
London Whale
A single JP Morgan trader
lost more than $6.2 billion
on derivative trades,
reigniting regulators
concerns about the banking
industry's practices and
risk appetite
FAULTY PRODUCTS MISCONDUCT
LEADERSHIP DATA SECURITY
Increasingly, people are paying
attention to a companys contribution
to state coffers and its strain on public
services. Companies, especially in
the US and UK, are coming under the
public and legal scanner for avoiding
corporate taxes (as Google, Amazon
and Starbucks saw in the UK) or for
having too many employees dependent
on tax-funded welfare programs (as is
the case with Walmart and McDonalds
in the US).
People are becoming more and more
aware of the larger picture they are
looking past organizational structures
and holding profitable parties at the
top responsible for the losses at the
bottom. This was well-illustrated
in the case of Kingfisher Airlines in
India, whose wealthy promoters have
been heavily criticized for delays in
employee salaries.
Four years after the BP oil spill and
three years after the Fukushima
nuclear reactor meltdown, people
seem determined to avoid similar
man-made disasters. Oil companies
are facing heat from activist groups
and regulators in new drilling projects
(as in the case of Shell, which has
had to shelve its 2014 arctic drilling
plans). Nuclear energy companies
are facing similar resistance following
the Tokyo Electric Power Companys
inadequacies in preventing and
alleviating the Fukushima disaster.
70
Impact on the Economy: Seeking Sustainable Growth
2
Impact on the Environment: Prevention before Cure
3
Economy and Environment
TAX AVOIDANCE
LOW WAGES /
UNPAID SALARIES
MAN-MADE
DISASTERS
Welfare queens
Walmart and McDonalds
employees rely heavily
on taxpayer funded
welfare programs,
fuelling the debate
around minimum wages
Tax avoidance
Google, Starbucks, Amazon
faced public and regulator
outrage in the UK over
low-to-zero tax payments in
the past decade
Unpaid salaries
Kingfisher Airlines failed to pay
employees for months before going
bankrupt, angering public and
regulators and hurting the
reputation of its successful parent
company and millionaire owner
Nuclear hazards
TEPCO, the operator of
the Fukushima nuclear
plant, was criticized for a
lack of safety precautions
and the way it handled
the meltdown, escalating
global concerns around
nuclear energy
Arctic drilling
Shell and Gazproms drilling programs
have been targeted by Greenpeace
activists, who are concerned that weather
conditions would make any disaster
response efforts impossible
71
A large number of brand crises revolve around human rights,
as people continue to fight gender inequality and demand
equal rights for the gay community and for workers of different
socioeconomic backgrounds.
The fight for gay-rights is a global one, with tremors felt at the Barilla
headquarters in Italy, at the Supreme Court in India, and at Sochi 2014.
People are sensitive about gay rights and it is common for activists
to publicly shame companies that fund anti-gay organizations (as in
the case of US fast food chain Chick-fil-a, which witnessed national
boycotts and appreciation-days as ideologies clashed).
Exploitation of low wage workers has recently emerged as a global
issue as well. People are unwilling to be a part of a system based
on exploitation, and are demanding brands be accountable for all
workers: including those across the supply chain and temporary
workers. Companies that have been publicly shamed include the
fashion industry for allowing unsafe working conditions in factories in
Bangladesh, Amazon for demanding too much out of its warehouse
workers, and FIFA for doing little to safeguard labour rights in Qatar.
Theres heat at the opposite end of the spectrum as well, with US
regulators clamping down on companies that hire people from
wealthy backgrounds in exchange for new business contracts
(as in the case of JP Morgan which is under investigation for
hiring Chinese princelings).
72
Impact on Human Rights: Equality for All
4
Human Rights
EXPLOITATION
DISCRIMINATION
HIRING BIAS
Chinese princelings
JP Morgans practice of hiring
sons and daughters of elite
Chinese in return for business
contracts led to legal troubles
in the US
Hiring based on looks
Abercrombie & Fitchs biased hiring
practices came under scanner as
activists argued that sales staff are not
models and should not be
discriminated against for their looks
Exploitation of migrant workers
Qatar 2022 and FIFA are facing
pressure from international human
rights bodies to improve treatment of
migrant workers and to address the
steep number of casualties
Exploitation of low-wage workers
Global fashion brands were
targeted by activists after a
clothing factory collapsed in
Bangladesh. Many European
brands were quick to sign a legally
binding safety accord, while
American brands refused and
faced much negative news
coverage. Brands such as Mango
were also criticized for inadequate
compensation to victims families
Scam ads
Ford was embroiled in
controversy when its ad agency
released unapproved and
distasteful scam ads that
depicted women tied up in the
boot of the Ford Figo
Slave camps
Amazon warehouses were
likened to slave camps as
journalists criticized the physical
demands and excessive
performance targets placed on
warehouse workers
Same-sex marriage
controversy
Chick-fil-as donations to
anti-LGBT rights political
organizations led to a public
debacle; with Chick-fil-a
boycotts clashing against
Chick-fil-a appreciation days
Lack of diversity
Twitter became the poster
boy of the lack of diversity
in Silicon Valley when it
revealed, in its pre-IPO
filings, that it had an
all-white all-male board
73
WHAT BOFA
DID
PEOPLES
RESPONSE
IMPACT
Crisis Catalysts: Three things to watch out for
In addition to the issues themselves, corporates and brands should also be prepared for three trends that can fuel crises:
steady stream of negative stories on social media and calls to
rally against the bank.
The impact? American Bankers 2013 Survey of Bank Reputations
shows that Bank of America scored lowest amongst customers
and even worse among non-customers.
Bank of Americas reputation took a hit during the financial crisis
of 2007-08 and continues to stay low because of the companys
non-empathetic response and the profit-first attitude it
continues to portray.
In the last few years, angry Bank of Americas customers and
employees reacted to delays and new unjust policies with a
74
Power of Individuals: the Bank of America case
1
Unjustified Interest Hikes to 30% -
even for customers in good standing
Customers shared stories on
YouTube, and one woman called for
a Debtors Revolt
Media picked up these stories
BofA resolved individual cases, thus
inspiring others to follow suit
Why Bank of America Fired Me
video received over 560,000 views
BofA ranks poorest in customer
service studies (ASCI, MSN)
Credit Unions received
1 million additional new
customers and over $4.5 billion
in funds in 2011-12
Employees & customers shared
stories and created a Banking Bad
mockumentary on YouTube
One customer created a Facebook
event that sparked a national
Bank Transfer Day movement
Intentional delays in modifying
loans leading to preventable
foreclosures & demoralized staff
First to introduce a $5
Debit Card Fee to preserve
high profits
In April 2013, the global fashion industry was accused of labour exploitation after the collapse of
the Rana factory in Bangladesh killed a thousand workers and injured two thousand more.
Activists and the media quickly revealed the brands whose apparel was manufactured at the
factory and mobilized people to petition the brands involved to sign The Accord on Fire and
Building Safety in Bangladesh a five year legally binding agreement to fund and uphold
minimum safety standards in the Bangladesh textile industry.
Less than a month after the collapse, 90,000 people signed the petition, pressuring 42 brands
to sign the agreement. Today, over 100 brands have signed the accord, and 26 additional brands
have created their own independent five-year safety plan.
As the one year anniversary looms ahead, activists and the media are pressuring the industry to
contribute to a $40 million compensation fund for victims.
In January 2013, horse DNA was found in frozen beef products in a British supermarket and
triggered a major breakdown in the traceability of the food supply chain.
Adulterated meat was found in 13 EU countries and millions of pounds of food was recalled
across Europe. Several hundred companies had received adulterated supplies of meat which
was later traced to slaughterhouses in Romania and Poland. Further tests detected traces of the
veterinary drug phenylbutazone, sparking fears for human safety.
Consumer-facing brands like Tesco and Findus suffered large drops in sales and changed
suppliers. Frozen meat products as a category witnessed a decline, and people in the UK are
opting instead for fresh traceable food and shopping at local butchers and farmers markets.
75
Speed of Activism: Bangladesh Safety Accord
2
Challenges of Scale: Horse-meat scandal in Europe
3
Recovering from crisis: Leading the Conversation
In times of crisis, people expect corporates and brands to step up and lead the conversation. Tired of denials, people want companies to
acknowledge their mistakes, implement quick solutions, and prevent similar events from occurring again.
Power of a Strong Offense: Target
While Target could have done more to
prevent the data breach in late 2013, the
company has staged a strong offense to
restore customer trust.
The company was a victim of a 19 day
security breach in which credit and
debit card information of 40 million
customers and personal information of
70 million customers was stolen.
A day after the breach was announced, the
company released an acknowledgement
and has since been working with federal
investigators, investing in cybersecurity
education and offering customers free credit
monitoring and identity theft protection.
In addition, Target is speeding up its plans
to introduce chip-enabled technology in
stores to boost security. A section of its
website is dedicated to explaining the
event to customers.
Power of a Clear Positioning: PwC
PwCs reputation with UK regulators took a
dip in 2011, when a House of Lords criticized
the auditor for its role in the financial crisis.
The firm responded by acknowledging the
lack of trust in the industry, appointing a head
of reputation strategy and positioning itself as
a part of the conversation - and the solution.
Already a strong content creator and thought
leader, PwC is using these strengths to
position itself as leader in addressing the
lack of trust plaguing its own industry
and its clients.
76
Power of Cultural Leadership: GE
A decade ago, GE was known as a leading
polluter. The company has since transformed
itself to a leading clean technology provider.
Since 2005, GE has committed large
investments to building ecomagination and
Healthymagination ranges of sustainable
eco products and affordable health products.
GE also launched open innovation challenges
and entrepreneurship programs to support
innovation internally and externally. The
company engages people around these
programs with short visual content packets,
optimized for quick consumption on social
networks. GE has an audience of 1 million
on Facebook.
Strong leadership, open innovation,
philanthropy efforts and participatory
programs have boosted GE to one of todays
leading global brands.
77
Components of a Reputation
Recovered
When it comes to crisis, its not a question of
just if and when, but also how. How will you
diminish the chances of a reputation crisis?
How will you respond when one hits?
From the many cases mentioned above,
its clear that strengthening and recovering
reputation is about
Changing the system doing the right
thing, standing for a purpose,
from the start.
Realizing that everything is connected
and that people already know it.
Being empathetic people are not
numbers, theyre individuals.
Being mindful some people may not be
influencers today, but they very well
could be tomorrow.
Its also about being realistic and knowing when to give in to peoples demands.
As Ellen DeGeneres poignantly observed at the Oscars:
Tonight, there are so many different
possibilities. Possibility number one:
12 Years a Slave wins Best Picture.
Possibility number two:
Youre all racists!
78
How to Manage your Reputation
in the Social Age
Establishing a great reputation used to be a
slow moving exercise it was more akin to the
turtle than the hare. Sure, there have always
been extreme instances in which respected
brands have taken major hits from huge crises
think the Tylenol scare of the 1980s but by
and large it has been possible to control and
sustain reputations if a company had a great
product and a consistent and compelling
branding and communications strategy.
MERrilL FrEund
md, SaN FrAnCiSCO,
MsLGRoUP
79
REPUTATION MANAGEMENT | How to Manage Your Reputation in the Social Age
80
In the era of social media, short attention
spans and one click hops, this isnt the case
anymore. With 500 channels, thousands of
blogs and billions of Tweets, how important
do the New York Times, CNN or Advertising
Age remain for maintaining a pristine
image? For example, a few years ago,
Internet and cable TV provider Comcast
received notoriety and fame when service
problems on its network were the subject
of on-going attacks on Twitter after which
they developed a rapid response to address
these damaging tweets.
Companies are adopting influencer
programs to drive greater user integration
into communications programs. While not
overtly co-opting users, it demonstrates
the new focus on Dave the Geek from
Orlando rather than David Pogue as
the taste masters driving the brand and
reputation.
1) Dont throw out the baby (let alone
the bathtub) with the bathwater
Unless 2 million readers a day mean
nothing, The New York Times is going
nowhere (even if they are giving away
millions of dollars a year due to a lack of a
cohesive online monetization strategy)
and what they publish still matters.
Ignore them at your peril.
2) But its not just a game of
volume focus counts.
A review of an online coupon site on the
Huffington Post is great but a mention in
a mommy blog with only thousands of
subscribers can be even better since they
are all socially vocal.
81
3) Whether Verizon wants to hear
this or not, churn is inevitable in
almost every industry.
Losing a customer happens in less time
than it takes to read this sentence. Its the
price you pay in an online world your
competitor is only one click away so any
micro-change to your brand, reputation
or experience and a loyal customer
could be gone. Learn to take this in stride
and better anticipate your customers
expectations and reactions.
5 Rules to Managing your Reputation in the Social Age
So given this new state of conventional wisdom, what rules should you apply to maintain,
improve or change your reputation or brand? Here are five to consider.
REPUTATION MANAGEMENT | How to Manage Your Reputation in the Social Age
4) You have to maintain the appeal
of a shiny object.
New social networks, gaming apps,
gourmet burger joints and airlines launch
every day and unless you maintain the
aura of innovation in your business, you
will lose much of what originally attracted
users. Social media and media is a beast
that requires constant feeding you have
to give people something to discuss
or silence will follow. A new feature,
new look and feel, new stunt. Just keep
moving. Preferably in the direction that
people are nudging you towards.
5) The world is now a 24-hour
network.
Reputation management has ceased
to be an eight-hour, five-day-a-week
exercise. You never know when a crisis
will erupt on Twitter that will demand
your attention (e.g. when an IAC PR
executive tweeted a racist comment and
then disappeared on a plane with no
internet access for 12 hours) or a golden
opportunity appears out of nowhere
(e.g., Oreos brilliant dunk in the dark
social media campaign during the Super
Bowl blackout).
Strategic brand campaigns still work
but the spontaneous events can end up
being far more important. Cutting edge
communications teams are building
always-on newsrooms not just to look hip
but because they need them.
Changes in the media and medium will
continue to impact reputation management
and brand control and todays best
practices will quickly become obsolete and
nostalgically irrelevant. With everyone now
having a voice, controlling your reputation
is kind of like skiing you can fool yourself
into thinking you control the ride. But thats
half the fun.
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Tap into Big Data: The Transcript of
your Reputation
As trusted advisors of our clients, we are
trusted to build, manage and protect our
clients reputations. Reputation equals
the licence to operate and the right to exist
as a company.
Reputation has never been harder to
manage and protect than in the new
communications landscape. The fundamental
change in communications is the power
of the individual. Every person is an
influencer because they have the platforms
and audience to express their opinion,
experiences, facts, knowledge and visions.
Which is terrifying and great at the same time.
FrEdEriKe dEN
OtTelandER
hEAd of DiGitaL & SociAl,
nEThErLanDS,
MsLGRoUP
83
REPUTATION MANAGEMENT | Tap into Big Data: The Transcript of your Reputation
84
The devil is in the unknown. The first reason
to tap into Big Data is the fact that Big Data
can help you prevent crises from happening.
A threat on Twitter. An increase of clients
complaining about the same thing.
A misunderstanding about your services.
A product that needs to be recalled. An
increase of adverse events. Issues are visible.
Ahead of the game: Prevent
crisis from happening
4 Reasons you should Tap into Big Data
1
Video: Google Flu Trends Overview
An audience of 2.3 billion people has access to the information
shared by 2.3 billion fellow individuals. This results in an impressive
and endless collection of data from traditional and digital sources
inside and outside your company that represents a source for
on-going discovery and analysis: Big Data.
The good news? You are one of those 2.3 billion people on this
planet and therefore you can tap into this Big Data. Here are four
reasons why you should.
Big Data giant Google is already cleverly
tracking a set of search terms to estimate
flu activity and identify outbreaks.
Any fire starting in even the darkest corner of
the internet can now be found and handled
before it turns into a crisis. If you missed the
fire and the crisis does happen, big data can
help you understand what the crisis is really
about and what issues need to be addressed
to take the sting out of the crisis.
85
Video-streaming provider Netflix learnt this
the hard way when it announced a new pricing
strategy. Customers posted over 15,000
comments to explain their outrage at this
decision on the companys blog itself
and countless more across social networks
and other websites.
Goodbye optimism bias:
Bridging the perception
reality gap
2
Organizations typically struggle with forming
an unbiased and accurate picture of their
reputation and the combination of factors
that impacts the reputation per stakeholder.
The danger is in thinking you know the target
audiences after working at the organization
for a few years and thus having a sugar coated
perception of the reputation you so proudly
work to build. An organization can use Big
Data to rid themselves of optimism bias and
bridge the gap between their perception of
their reputation and the real reputation.
Collecting data on how your stakeholders feel
about you has never been easier and more
confronting at the same time. Unlike a panel
of happy-to-give-feedback-and-get-paid
consumers, Big Data offers a cross-section
of how people really feel about you. And
about your competitors. And the industry.
And so on. Big Data is a transcript of
conversations real people have in
real life and therefore its the transcript
of your reputation.
Video: Introducing the Newsroom by Publicis Consultants
86
Knowing that information spreads with the
speed of light and that any bit of information
can have a huge impact on a reputation, it
seems only fair to say that a reputation can
turn 180 degrees within minutes. An annual,
monthly or even daily reputation report is only
an organizations own reassurance.
To really be able to manage your
reputation, you need real-time reputation
monitoring and even more importantly
the ability to interpret what the
monitoring tells you.
Who is saying what, and why? What are
people saying across specific target groups,
regions, genders, political backgrounds and
so on?
Big Data can also be used to measure the
impact of an organizations response to an
issue or crisis. How is your target audience
responding to your statements? Who are the
influencers and why do they say what they
say? Managing a reputation has never been
more exciting and transparent before: all this
data almost literally enables corporates &
brands to be the fly on the wall.
More and more companies today are creating
social newsrooms to monitor social data 24/7.
(Watch this introduction to newsrooms by
Publicis Consultants).
The fly on the wall: Real time
reputation
3
Video:
Samsung Galaxy S II
(The Next Big Thing)
Commercial
87
A 2.3 billion person R&D
department: Improve your
products & services
4
Not only does Big Data help you prevent
a crisis from happening and manage your
reputation real-time, it also helps you build
your reputation. You have an extended R&D
department out there. Hidden in jokes,
sarcasm, complaints, praises and wishes is
your room for improvement. Improvements
that will take away the advantage of your
main competitors. Improvements that will
make your target audience feel appreciated
and take ownership in your brand.
From changing the cap of the bottle because
it is too hard to open, to training your staff
to answer questions in a friendlier manner.
From adding a feature to your app because
people asked for it, to providing answers to
the simple questions your stakeholders ask.
These are small changes, easy to identify
by analysing Big Data, and can have a large
impact on your reputation.
Samsung analysed social conversations
to identify what people liked most in the
Samsung SII smartphone, and featured these
in its Next Big Thing commercial. Samsung
also used this data-driven approach to guide
its Super Bowl ad to launch the Galaxy
Note in 2013.
Based on 2.14 billion search results on
Google for Big Data, I am confident to say
we are aware of the phenomenon Big Data.
However, a quick research on Big Data shows
the topic is strongly related to technology,
research software, business and analytics.
It seems we only consider Big Data to be an
analytics and research tool, while actually it is
bigger that that. Big Data helps you manage
your reputation. Increasingly, it is your licence
to operate and your right to exist.
The global financial crisis and an on-going
drumbeat of corporate, government and other
institutional scandals have served to weaken
the already flagging reputations of many
leading institutions and companies around
the world. And, while the global economy
appears to be slowly mending, prospects
seem slim for any sort of
near-term reputation recovery for many
of our most important institutions and
leading companies.
88
BraD WilkS
md, MiDwEst, nortH amErica,
MsLGRoUP
The Evolving Role of the Board in
Reputation Management
Prospects seem slim for any sort of near-term
reputation recovery for many of our most important
institutions and leading companies.
What can be done to rebuild stakeholder trust
when public skepticism of business stands at
its highest levels in years? Unfortunately, for
many companies, the answer seems to be to
redouble communications efforts about their
CSR, sustainability and charitable initiatives
as a means of recovering their reputation.
And, while certainly such initiatives should
be universally applauded, reputation is more
complex than this it is an amalgam of
many perceptions across a wide spectrum
of stakeholders. Communications alone
will never be successful in reversing a poor
reputation thats the result of underlying
poor behavior or unsavory business practices,
unless it is accompanied by behavior change.
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REPUTATION MANAGEMENT | The Evolving Role of the Board in Reputation Management
Launching a New Paradigm
So perhaps its time to push for more
fundamental change in how reputation is
managed within our enterprises. Maybe we
should be challenging our organizations
to reevaluate their core values and
behaviors and make changes in
organizational governance, which may
over time have greater credibility in
rebuilding trust and reputation.
One model for addressing this issue would be
to establish a separate Reputation Committee
of the Board, which would have responsibility
for reporting back at each board meeting
the current status of the organizations
reputation, along with an assessment of
emerging reputational risks which must be
addressed. By elevating reputation oversight
to the Board of Directors, leaders will
begin to grasp the existential importance
of reputation, and shift their perspective
90
from that of purely risk mitigation to
seeing reputation as a strategic business
imperative which can drive competitive
advantage.
Having the topic of reputation elevated to
the boardroom might also encourage other
important governance decisions to be taken
within the context of their potential impact
on reputation for example, controversial
sourcing decisions or executive compensation
packages.
Its difficult to be an effective
steward of corporate
reputation when oftentimes
actions that negatively
impact reputation emanate
from higher within
the organization.
The Problem of Who
Owns Reputation
For although conventional wisdom says that
reputation is a critical asset that needs to be
invested in, nurtured and protected, the truth
is that for most companies, reputation is too
often an asset that everyone owns, which
usually means that nobody owns it.
Reputation is also difficult to measure,
although more and more attempts are
being made to measure and ascribe a value
to corporate reputation. One such example
is the Reputation Institutes RepTrak
model, which quantifies and analyzes
reputation across stakeholders, allowing
for predictive analytics and integrated
management dashboards.
Most of us tend to think of the Chief
Communications Officer as the primary
steward of corporate reputation, but its often
unclear who, if anyone truly owns corporate
reputation, has the ability to influence it, or is
held accountable when it is impaired.
Its difficult to be an effective steward of
corporate reputation when oftentimes actions
that negatively impact reputation emanate
from higher within the organization.
For example, in 2010, when Johnson and
Johnson was involved in at least 11 major
product recalls, CEO William Weldon
maintained the companys quality control
issues were not a systemic problem,
an assertion that damaged the companys
credibility with stakeholders,
including regulators.
91
In 2012, when it began to emerge that a trader
in JPMorgan Chases London office had taken
a huge bet on credit derivatives, CEO Jamie
Dimon initially pooh poohed the incident,
saying the Whale had been harpooned,
and predicting that no one would be talking
a year later about what turned out to be a
$6.2 billion loss, one of the largest in Wall
Street history.
When first confronted over the traffic scandal
involving the shutdown of the George
Washington Bridge, New Jersey Governor
Chris Christie went from joking, I worked the
cones, actually. Unbeknownst to everybody,
I was actually the guy out there. I was in
overalls and hat, to public contrition and
I am embarrassed and humiliated, within
just a matter of weeks, while seeing his
prospects fade as the GOP Presidential
front-runner in 2016.
92
In each of these instances, those responsible
for communications served under the
individual or group whose actions or
comments resulted in reputational damage.
So it seems clear that reputation needs
to be championed at a higher level within
the organization.
The Role of Directors
One of the biggest barriers to gaining Board
acceptance of reputation as part of their
oversight responsibility is that most directors
see their primary responsibilities as
fiduciary oversight to drive value creation
for shareholders.
Reputation is too often seen as an intangible
asset thats great to strive for, but impossible
to measure or value.
In this model, the boards primary focus
is setting the strategy, and then ensuring
that management is executing that
strategy to drive value while protecting
and growing tangible assets such as cash,
property, plant and equipment, accounts
receivables, IP and other things that
can be easily monetized for claimholders
in a bankruptcy.
Reputation, and its twin sister, human
capital, while priceless assets, are viewed
as impossible to value or transfer, which
means they often get relegated to lower
levels of priority.
One of the great ironies of reputation, both
personal and institutional, is that we take it for
granted when things are going well. Like the
air we breathe our reputation is absolutely
essential to our health and wellbeing, yet only
in its absence when were left breathless and
gasping do we truly come to appreciate it.
A key lesson of recent years is that corporate
reputation is fragile and ethereal something
that can evaporate in minutes like dew with
the rising sun.
Reputation is also not entirely within our
control subject to behaviors by groups and
individuals outside the corporate walls and
93
beyond our day-to-day sphere of influence -
part-time employees, freelance consultants,
outsourced departments, our global supply
chain and network of business partners,
or even trusted colleagues and employees
with mal intent.
Whats also true is that recovering from a
reputation collapse is much more difficult
and time consuming than it is to build and
maintain that reputation in the first place.
So the challenge in reputation
management is how do we build
and preserve it so as to mitigate
damage when things go poorly.
How do we build and
preserve reputation?
So how do we develop a paradigm to both
nurture and value reputation in this new
world, where the worlds most successful
companies can spring to life as multi-billion
dollar enterprises think Facebook,
Twitter, Snapchat and WhatsApp and yet
have few of the traditional measures of value
such as revenues, employees,
or manufacturing plants.
Clearly a disproportionate piece of the value
ascribed to these emerging behemoths must
be ascribed to human capital, IP, a unique
(and often untested) business model and
reputation. How can companies or their
boards possibly place a value on, protect and
preserve these most vital of assets, whose
worth can evaporate in an instant?
As more and more of the global economy
is built upon this knowledge based
foundation, reputation management is
increasingly top of mind within the C-Suite
and in boardrooms around the globe.
Surveys show that reputation risk is viewed
by the majority of executives and investors
as the most significant threat posed to a
companys global business operations. A
favorable reputation can translate into higher
sales, profits, the ability to recruit the best
and brightest, and a premium share price
multiple. Studies confirm there is a
favorable correlation between reputation
and share price in the M&A world,
premiums are paid for companies with
strong reputational capital.
Googles $3.2 billion acquisition of Nest,
a three-year old unprofitable company with
just 200 employees, is a case in point.
By creating a Board-level committee tasked
with reputation management, companies can
demonstrate how important this issue is to
those entrusted with its oversight.
However, to be successful, such a
committee would need to receive regular
information about the companys
performance as measured not only by
profits, but also in terms of how it is
perceived by key stakeholders.
The committee would have the ability to
solicit input from key stakeholders including
employees, customers, shareholders, as well
as have access to updates about conventional
and social media coverage of the company.
94
In instances where the news is bad,
performance goals should be established
that the board holds management and the
rest of the organization accountable for
achieving. Such performance goals would
result in actions to address not only the
communications surrounding the reputational
risk, but the underlying root causes of the
problem in terms of operations, human
resources, sales and marketing or supply
chain management.
In this way, the entire board of directors can
remain updated as to the current status
of the companys reputation based on a
regular survey of key stakeholders to identify
strengths and material weaknesses in the
companys reputation. Some companies
are already moving closer to this model by
establishing corporate social responsibility
or reputation committees appointed by the
Board which are charged with the oversight
of their social obligations and reputation as
responsible corporate citizens. Other leading
companies are expanding the discussion of
reputation within the context of their current
board committee structure. However, making
the commitment to reputation as an issue
that warrants its own Board Committee
remains an elusive goal.
If weve learned anything from the past few
years it is that only by regularly assessing
the state of a companys reputation,
auditing its reputational assets and
potential liabilities, and defining a
course of action to stave off actions which
might damage reputation, can Boards of
Directors truly demonstrate a model of
good corporate governance which will help
their organizations begin to regain trust.
95
Perspectives: Reputation
Around The Globe
China:
Facing the Challenges
of a Low-Trust Society
France:
Social Performance
Comes First
India:
The Awakening
Poland:
Invaluable Reputation -
Protects, Motivates, Sells!
Fabrice Fries,
President, France,
MSLGROUP
Par Uhlin,
MD, MSLGROUP in Hong Kong
and Vice Chair,
MSLGROUP China
Jaideep Shergill,
CEO, India,
MSLGROUP
Katarzyna Stamatel,
Head of Law & Consulting,
Poland,
MSLGROUP
VoLUME 3, IsSUE 1
France: Social Performance
Comes First
FaBricE FriES
PrEsidENt, FranCE,
MsLGRoUP
98
In France, the question of corporate
reputation is invariably seen in an ideological
context and historically one that is wary,
if not critical, of anything to do with business.
Surely the digital age, in a country particularly
connected to the internet, is changing the way
we engage, or disengage with brands. But
their perception of their presumed utility in
economic, social and environmental progress
remains a matter of debate.
To measure reputation, the French, more
than others, give greater importance to
aspects such as corporate governance
or good corporate citizenship. Inversely,
the quality of products and services is
substantially underweighted.
PERSPECTIVES | France: Social Performance Comes First
99
In France, a companys reputation is often hit by politics: in 2012, Arcelor Mittal came
under fire during the election campaign.
To measure reputation, the French, more than others,
give greater importance to aspects such as corporate
governance or good corporate citizenship. Inversely,
the quality of products and services is underweighted.
In other words, companies are expected to
be equally efficient in their working methods
as in what they do. Social challenges meet
commercial challenges.
The different barometers used to measure
corporate reputation in France demonstrate
this specificity. As such, the correlation is
immediately made between the role given
to any industrial sector during a particular
economic crisis, and the score it will be given
by the general public.
100
Over the past few years, banks have been
generally ranked poorly. Most recently,
following a series of restructuring and
redundancy plans, the automobile
industry has suffered as a whole.
In a more insidious manner and despite
undeniable progress in product and
How do different industries fare in France
service offerings, two sectors are
traditionally low in reputation rankings.
On one hand, the pharmaceutical
industry, suspected of putting private
financial interests before the interest
of public health.
And on the other hand, the telecom
industry, accused implicitly of taking
advantage of the consumer in price fixing
and collusion on offers.
Which companies are
ahead of the rest?
Finally, companies that have gained
the respect of the French, present
three characteristics:
1 They are historical industrial powerhouses,
intimately linked to the image of
French excellence.
2 They are brands from the digital era,
encompassing the positive attributes of
a connected society.
3 And they are brands that communicate
heavily on their commitments, particularly
in relation to the environment.
In a recent poll published by a leading
economic newspaper in partnership with
public relations agencies, three major names
made it to the top of the list.
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Danones commitment in emerging countries via the
Danone Communities initiative is a key factor of
Danones reputation.
Danone, a global leader in the food
industry benefits from a policy patiently
built around major social issues. This
strategy is largely based on the brands
strong commitment to two issues of
great social importance: health and
sustainable development. Until now,
this commitment has allowed Danone to
avoid the collateral damage of food and
health related crises that often challenge
other industry players.
First, Google, the symbol of promise
in the digital wave. Its products and
services, and its overall management
style and employability, generate
enthusiasm, especially among younger
generations.
Nevertheless, the French remain more
reserved than the rest of the world when
judging corporate performance. In fact,
this is the last criteria considered in
developing an opinion.
Despite the generally positive performance
ratings of bigger companies, the French
are substantially more interested in
the more social and societal aspects of
reputation; for example, employment is
considered as important as innovation.
In essence, the French consider that
performance is not a means to an end but
102
Finally, and somewhat
unexpectedly, Michelin,
the global leader in tires, is
perceived by the French public
as a particularly efficient brand in
terms of innovation, quality and
sustainability, and safety of their
products. The companys financial
results, reflecting its focus on
social dialogue in a context where
competitors are brutally cutting
jobs in France, also explains its
high ranking in public opinion.
Yves Rocher has built its marketing upon
the respect of nature for decades. This
key component of its reputation is now
developed on social networks.
rather that it should be part of the shared
vision of all stakeholders.
For example, the French are unfazed by the
spectacular financial performance of Total,
because the companys image is engulfed
in accusations of bad practices in some
developing countries. Inversely, the excellent
reputation of Yves Rocher is fundamentally
based on the companys longstanding
commitment to sustainable development.
Engaging the French
Consumer: Getting the
message and the
medium right
This French approach to reputation has
consequences on how consumers
impact brand reputations in the era of
digital conversation.
Thus, only one third of consumers base their
decision to follow a brand on market related
criteria such as products, services
and innovation.
For all others, what is essential are matters of
ethics, the way the company operates, or in
other words its immaterial dimension.
This observation requires that agencies
which, like Publicis Consultants, claim
an expertise in sustainable reputation,
create long-lasting and comprehensive
strategies with their clients.
Audiences are indeed increasingly
multifaceted and less segmented. There is no
use of developing the employability on one
side, without taking into account social utility
on the other. Transparency means being
unquestionable in all aspects of the game.
Especially since leaders, in France and
elsewhere, are well aware that reputation
constitutes the number one risk. This
change of mind is more clearly visible in
areas directly impacted by public debate,
such as health and energy, but nevertheless
applies to all brands. The speed with which
respected brands have been tarnished, such
as happened to Barilla in 2013, sends an
important signal.
Obviously amongst the leading risk factors
is social media. Beyond the necessary
technological agility, the expertise of our
network is judged by our clients on the quality
of our offer of content creation to build a
sustainable reputation. Consumer content
and Corporate content are not so distant
from one another. In fact, it is their
seamless articulation that can generate
reputational impact.
103
China: Facing the Challenges of a
Low-trust Society
PaR uhliN
md, MsLGRoUP iN honG
KoNg anD vicE ChaIR,
MsLGRoUP ChinA
The State of Trust
in China
Chinese society is suffering from a trust
crisis. This is partly due to recurring
scandals over the last decades, where
companies, government and even the
media themselves have tried to cover
up the truth.
The best known examples include the SARS
epidemic and the melamine milk scandal,
where farmers, dairy companies and local
officials all tried to avoid taking responsibility
for their part in a tragedy which caused the
death or hospitalization of hundreds of
infants. Numerous food safety and healthcare
incidents have involved everything from
water to pharmaceuticals to international
fast food chains.
104
COUNTRY PERSPECTIVES | Corporate Reputation in China Facing the Challenges of a Low-trust Society
PERSPECTIVES | China: Facing the Challenges of a Low-Trust Society
The central government faces a general trust
crisis both because of its role in censoring
media reports on these issues, and the
general perception of vested interests and
widespread corruption. Even the crackdown
on corruption initiated in the beginning of
2013 is often seen as only touching the tip
of the iceberg. Chinese people seem to be
asking themselves: is there anyone
left to trust, apart from my family and
closest friends?
At the same time, Chinese citizens have
become better informed, and tend to be
more critical and questioning than they
were just ten years ago.
This is partly thanks to increased openness
and transparency from the government
itself, but also due to the emergence of
social media and the consequent access
to information and forums for debate that
simply did not exist previously in China.
The paradox is that social media has also
brought a high level of misguidance and
false information.
Rumours are being spread and believed,
as people do not trust official sources of
information the way they used to.
Against this background, building a strong
corporate reputation in China is more
important than ever.
105
Corporate Image is crucial to stakeholder relations
The days when Chinese
authorities welcomed any
kind of foreign investment
with open arms are
long gone.
Corporate brand is seen
by Chinese consumers as
a guarantee for quality
and honesty.
With overcapacity in many areas of the
economy, a rapidly increasing cost level
and an higher environmental awareness,
the Chinese government is trying to
transform the economy from labour
intensive manufacturing to knowledge and
technology intense areas.
The approval of permits and licenses
needed for entry or expansion of the
business in China will of course be based
on the business case presented.
But corporate reputation is also playing
an increasingly important role, with
priority given to organizations with a
reputation for sustainable investments
in R&D and innovation, ethical business
conduct and social contribution.
Consumers in China are extremely
concerned about getting value for money
and to buy products that are safe to use.
Much time and effort is spent to find
products and services that actually deliver
what has been promised, and a strong
corporate brand and reputation that backs
up specific product claims is a huge asset.
This has been confirmed by a number of
research projects conducted in the past few
years. The importance of corporate brand
is also clear from the unique branding
strategy for China applied by leading
multinationals starting with P&G.
The corporate brand has a strong
presence on product packaging and is
used in communication, as a guarantee
of quality and trustworthiness.
This way of highlighting the corporate
brand for consumer marketing is very
different from communication in other
parts of the world.
106
The competition for talent
is one of the most crucial
challenges facing
any company in China.
Compensation and career opportunities
remain important factors when people in
China evaluate a job opportunity. Other
factors like job safety, company values and
the overall corporate reputation are also
becoming increasingly important.
People want to work for reputable large
companies that have clearly articulated
values, and companies making a
contribution to Chinese society.
107
Companies are waking up to this challenge, but often
launch initiatives before being clear on objectives
and expectations
When it comes to proactively building
a corporate reputation, the situation is
somewhat different.
Compared to a decade ago, the time and
effort invested in building up corporate
reputation has increased immensely. In
the past, companies were not expected to
contribute to society, and there was a low
awareness of environmental damage and
product safety. This has changed, and today
both politicians and the general public expect
companies to give back to society.
Many companies are implementing some
form of corporate citizen program, but many
of the programs are put in place because
we are expected to, without a long-term
strategy and clearly defined objectives. Other
programs conducted are modelled based
on global initiatives, with little relevance to
China.
There is a need to become more aware of
the purpose behind these initiatives, to
anchor the purpose and direction within
the organization, and to develop and
execute programs for a Chinese context.
Today, most large international companies in
China have systems and capabilities to protect
their reputation and handle communications
issues and crisis. Chinese media mainly target
foreign companies when writing negative
articles. Sometimes the scrutiny and criticism
is well deserved, sometimes not. Seeing
the way industry peers are treated in the
press, or sometimes learning first hand,
has made the necessity of investing in
these capabilities obvious.
108
109
3 China specifics one must have in mind when building
corporate reputation in China
Of course, every market is different, but some aspects of Chinas past, present and future direction make the
challenge of building corporate reputation in China unique.
The speed of development
in China is sometimes overwhelming
build long-term platforms,
frequently activated to stay relevant.
The transformation of China has taken
place at a pace never before seen in history.
Hundreds of millions of people have been
taken out of poverty, and the country has
gone from isolation to being a truly global
society in areas ranging from business
to fashion.
Life in China is extremely fast, and this has
strong implications on how a reputation can
be built over time. With all this change, it is of
course important to have a long term strategy
and direction that can guide company
activities and communication.
That said, activities must be carried out at a
much higher frequency to stay relevant, and
to be remembered.
What was done six months ago is easily
flushed away in the constant stream of news
and developments.
You have to earn your reputation every
day, and every week, and you cannot
put much reliance on a foundation built
up in the past.
With a limited number of long-term
platforms and programs that can be
activated frequently, one can ensure that the
communication is consistent and clear but
also conducted with the intensity needed
to stay relevant.
1
Manage shared values despite
high staff turnover Create strong
systems for knowledge management
and internal knowledge sharing.
An organizations character is reflected
by the people within, and the values and
vision behind corporate reputation must be
anchored internally. With an average staff
turnover at around 20% for private companies
in China, this becomes complicated.
It is important to work systematically to
keep employees informed, involved
and believing. If at any given time, one
out of four employees are new to
the company, an internal knowledge
management and sharing program needs
to be strictly enforced.
A reputation is built on actions. How the
company acts in critical situations as well
as in day-to-day operations. Actions are
decided by policies and habits, and these
are decided by the values the company
embraces.
Creating a system to clearly articulate,
document, share and inseminate these values
will decide if the organization can act as one
unified entity or just a group of individuals
working together. This will have a large
impact on the degree of success the
organization will have in creating a coherent,
well-founded reputation.
110
111
Keep it personal, and use media
that allow for this.
In a low trust environment in constant
change, people trust other people, not
faceless media or authorities. Taking
into consideration the increasing scepticism
towards government controlled media in
recent years, it becomes even more important
that communication can be traced back to
a credible sender - preferably a person that
people can relate to.
Alternatives to traditional media including
company owned media platforms and
social media channels become more
important.
Having a strong presence in mainstream
media is necessary to support awareness and
a wide exposure of company activities. But
given the credibility issues facing Chinese
media, a strong presence on social media
and other owned media channels like web
based magazines, internal and external
newsletters will increase the credibility of the
communication, and allow for more complex
and in-depth messages.
Word of mouth with own employees as
ambassadors is a convincing way to build
corporate reputation in a low-trust
society like China.
Regardless of whether the objective is
sales, recruitment or crisis management,
testimonials and endorsement from
company employees is highly trusted,
while the opposite situation where
employees are confused about company
values and actions can be extremely
damaging to reputation.
India: The Awakening
JaIdEep ShErGiLL
cEO, indIa,
MsLGRoUP
Reputation is a growing
concern
A New York Stock Exchange (NYSE) study
a few years ago of 205 CEOs reported that
75% of them track their firms reputations
through surveys, 44% said that their firms
reputations were more important then
than three years earlier, and 84% said that
they were taking action to protect their
firms reputations.
112
More than 80% of these CEOs undertook
informal discussions with relevant
stakeholders, 70% either held regular
interactions with employees or commissioned
surveys of them. About 65% regularly
tracked their rankings in surveys published by
credible sources.
Its clear, then, that reputation is a serious
business concern.
The modern business environment is
complex in the best of times, let alone during
a global economic downturn such as the one
were grappling with.
PERSPECTIVES | India: The Awakening
113
There are few markets as complex as India, and
corporations are discovering that traditional models
of reputation management are crumbling.
114
of CEOs track their
firms reputations
through surveys
said that their firms
reputations were more
important then than
three years earlier
According to an NYSE Study of 205 CEOs
This makes reputation even more important
because it is a priority for internal and
external stakeholders. Loss of reputation
can adversely impact share price, the
ability to attract and retain talent, customer
acquisition and retention, and government
and community relations.
This is as true in India as elsewhere.
There are few markets as complex as
India, and corporations are discovering
that traditional models of reputation
management are crumbling.
Stakeholders both internal and external
want real engagement and actions that match
their value systems and expectations.
Stakeholders today are empowered because
of the information explosion, and they
are not satisfied with merely information
about products or services. They instead
want a 360-degree perspective that
includes value for money, product lineage,
corporate philosophy, credibility, ethics
and sustainability. Sadly, in most corporate
messages, the factors that build belief
are missing.
Businesses are beginning
to revisit communications
strategies
For the public relations (PR) industry,
this is a huge opportunity.
Across the world, advertisings role as a
brand custodian is losing firmness.
Today, businesses need help through
integrated communications.
However, businesses have been slow to
recognise that PR is perfect for this role.
There is an urgent need to showcase the role
it can play in reputation management.
The good news is that businesses are
beginning to revisit communications plans.
Apart from synchronising paid and unpaid
communications, they are evaluating how
activation can lead to reputation building and
not be limited to media coverage.
Corporations and PR agencies need to work
on a partnership that is mutually beneficial.
If reputation management is to make a
genuine impact, the client and the agency
have to establish a sustained partnership in
which media coverage is incidental and the
primary focus is on achieving business goals.
According to an NYSE Study of 205 CEOs
Said that they were
taking action to protect
their firms reputations.
115
Already, we are witnessing important
changes within organisations:
Firstly, while marketing communication
is driven by the marketing team,
corporate communications is becoming
an increasingly important voice
in the business set-up. Corporate
communications desks are spending more
time with CEOs, who should
ideally be the business chief
corporate communicators.
Communications plans are being aligned
with business calendars and discussed
against a set of corporate objectives.
Media relations are being used to ensure
traction and long-term loyalty from various
stakeholders rather than merely for
exposure.
Communication to build reputation is
becoming part of top managements key
result areas. Again, the key is the use
of strategic communication to achieve
business objectives.
This is accompanied by the establishment
of stringent yardsticks to gauge the
effectiveness of communication.
For instance, in some organisations where
recruitment advertising budgets have been
slashed, the function heads are being
asked to use PR instead.
Communications teams are being linked
to central research desks an indicator
that for the first time PR is being
acknowledged as a brand building tool
on par with other tools.
116
The Indian PR Industry
must rise to meet these
demands
As an industry, however, PR needs to effect
some quick changes. First of all, it needs
better measurement systems. Our stress on
advertising value equivalents is hurting us.
We must focus instead on research-based
measurement of impact on reputation and
the achievement of business goals. Audits,
measurements, monitoring, accountability,
research and insights are missing from the
PR lexicon.
Our inability to project ourselves into the
bigger picture is primarily why bigger
budgets have eluded us.
Lastly, there is no substitute for robust client
engagement. In order to play the central role
in reputation management, PR consultants
must initiate a constructive education
campaign within the client organisation and
show it the path to long-term organic and
symbiotic growth.
If we can do all of this, there is no reason
why PR wont take its rightful place at the
forefront of the reputation business.
117
Poland: Invaluable Reputation -
Protects, Motivates, Sells!
KaTaRzyna
StAmatEL
hEAd of laW & CoNsultiNG,
PolaND, MsLGRoUP
118
What is reputation, and what is its value for
Polish companies and organizations?
We asked this question to representatives of
Polish and international companies, financial
institutions and industry organizations during
our conference Invaluable reputation -
protects, motivates, sales!
The conference was organized by
MSLGROUP and Harvard Business
Review Polska and took place on December
10
th
2013 in association with the Warsaw Stock
Exchange, the National Depository
for Securities and the Polish Institute
of Directors.
PERSPECTIVES | Poland: Invaluable Reputation - Protects, Motivates, Sells!
119
Corporate reputation is increasing in importance
in Poland, as organizations experience the
positive impact of a strong reputation on growth
and as the countrys youth begins to realize the
power of social media in driving change.
At the conference, MSLGROUP experts Roland
Klein, head of the CNC Communications office in
London, Andrew MacDougall, Senior Executive
Consultant at MSLGROUP London, and Anders
Lindberg, head of JKL, discussed the components
of reputation, methods of effective public
relations and new norms for responding to
the perfect storm.
Here are the points that resonated most with
the conference attendants.
Corporate reputation is increasing in importance in
Poland, as organizations experience the positive
impact of a strong reputation on growth
Key takeaways from the
conference
Reputation is a credit of trust
that allows companies to establish
relationships, conduct activities and lead
development of the organization. After all,
without trust the business cannot grow,
without reputation we cannot trust
the business.
Reputation begins with employees
Only when they become ambassadors of
the company and its products or ideas will
the company reach a wider audience.
Cultural specificities matter
Even though we live in a global world of
information and values, there are some
specific cultural circles, specific places
where you need to be especially careful
with your selection of approach tools and
the type of communication.
Reputation leads to
customer loyalty
In the B2C sector, in financial markets or in
open industries, reputation enforces sales
and helps to attract and to keep customers.
Reputation provides a
license to grow
In the B2B sector, a strong reputation
carries slightly different benefits. It can
provide access to capital, enable better
collaboration with business partners and
ensure a stronger relationship with market
regulators. Reputation gives companies
the license to operate and the
license to grow.
Companies and the Polish
government must be more
transparent and co-operative
Regardless of the industry, the most
important aspects are: maintaining full
transparency and clear communication
from both sides. Moreover, both the
government and the business partner must
act on long-term action plans to realize
valuable projects in a win-win model.
Companies should be more transparent
in projects they lead with the
government, and realize their work
supports their economy and impacts
their own market situation. From the
other side, governments can benefit
from international companies expertise
and good practices from other markets.
Governments should maintain balance
in newly introduced regulations,
especially within the banking sector,
as excessive liabilities may restrict their
ability to finance the economy.
120
Polish youth are embracing
social media
The young generation is a few years behind
their global counterparts in setting new
norms and in their attention to human
rights and corruption. However, on issues
such as tolerance and openness, Polish
consumers have changed significantly
and are verbal about their views. In Poland
there are currently over 8 million active
users on social media and that number is
growing rapidly. Veracity, good intentions,
transparency and honesty are important
elements when communicating with this
group over social media.
Polish customers are also
becoming more aware
They are no longer just at the end of the
chain, but want to actively create products
and affect companies offer. Increasingly,
they use social media, especially during
crises, to improve their negotiating
power or position.
Companies need to be
structured for speed
Todays crises are quicker and know no
boundaries. The perfect storm, a crisis with
significant consequences for both reputation
as well as the organizations business activity,
is more common and demands real-tile
responses. Today, crises spread with lightning
speed and often have a global impact.
121
When managing crises, companies must
communicate true information a rate
reflecting the social media reality. Speed is of
essence in crisis communication activities and
often requires new, more effective processes
within the organization.
PERSPECTIVES | Poland: Invaluable Reputation - Protects, Motivates, Sells!
PEOPLES LAB
Peoples Lab is MSLGROUPs proprietary
crowdsourcing platform and approach that
helps organizations tap into peoples insights
for innovation, storytelling and change.
The Peoples Lab crowdsourcing platform
helps organizations build and nurture public
or private, web or mobile, hosted or white
label communities around four
pre-configured application areas: Expertise
Request Network, Innovation Challenge
Network, Research & Insights Network and
Contest & Activation Network. Our community
and gaming features encourage people to
share rich content, vote / comment on other
peoples content and collaborate to find
innovative solutions.
The Peoples Lab crowdsourcing platform
and approach forms the core of our
distinctive insights and foresight approach,
which consists of four elements: organic
conversation analysis, MSLGROUPs own
insight communities, clientspecific insights
communities, and ethnographic deep dives
into these communities. The Peoples
Insights Quarterly Magazines showcase our
capability in crowdsourcing and analyzing
insights from conversations and communities.
Learn more about us at:
peopleslab.mslgroup.com/peoplesinsights | twitter.com/peopleslab
Contest and Activation Network:
Pearl Academy
In 2013, Indian fashion school Pearl
Academy used the Peoples Lab platform
to create Portfolio 2013 - a contest where
graduates could upload their work for
public voting. In 10 days, 10,000 people
visited the site, generating 100,000
impressions, and cast 7,000 votes with
NO media spend.
Research & Insights Network:
P&G Asia - Thank You Mom
In 2012, P&G Asia and MSL Singapore
used the Peoples Lab platform to create
a Social Media Regional Center, a secure,
private community where 100+ P&G
stakeholders and agency partners
shared content and best practices for the
Thank You, Mom campaign at the London
2012 Olympics.
122

Write to us to start a conversation on how we can help you distill actionable insights and
foresights from conversations and communities:
Pascal Beucler,
SVP & Chief Strategy Officer
(pascal.beucler@mslgroup.com)
Nidhi Makhija,
Senior Manager - Insights
(nidhi.makhija@mslgroup.com)
peopleslab.mslgroup.com/peoplesinsights/
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mslgroup.com
MSLGROUP is Publicis Groupes strategic
communications and engagement group, advisors
in all aspects of communication strategy: from
consumer PR to financial communications, from public
affairs to reputation management and from crisis
communications to experiential marketing
and events.
With more than 3,500 people across close to 100
offices worldwide, MSLGROUP is also the largest PR
network in Europe, fast-growing China and India. The
group offers strategic planning and counsel, insight-
guided thinking and big, compelling ideas followed
by thorough execution.

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