Monthly Archives: March 2010

Reputation, CSR, and Taking Responsibility
March 31, 2010

Corporate Social Responsibility – or any derivation of the term – can be confusing. Experts debate its value, its inherent meaning, its application to real life. There isn’t a well-established consensus on what it means for a company to be a “responsible” one. Unfortunately, it being the right thing to do doesn’t suffice. It must be more strategic than altruistic; must contribute in some way to the bottom line. And too often flashy cause marketing campaigns or big check writing masquerade as CSR.

But the April cover story in the Harvard Business Review tries to get us closer to common interpretation.

The quick rundown on an extensive (and full read-worthy) article: Its thesis is that the best measure of corporate responsibility is based on “internalizing” what the authors refer to as “externalities.” Externalities in this case are defined as impacts a corporation has on the world that they have until recently not been held to account for. These can be things like pollution, or obesity issues for snack makers, as examples.

The reasons to do so are threefold:

• The growing scale of companies and the commensurate impact
• Improved measures and sensors for gauging that impact (can’t claim ignorance)
• Heightened sensitivity of stakeholders (increasing transparency of information)

When stakeholders – consumers, NGOs, government, etc – find an externality they feel the corporation could take greater internal responsibility for, there are mechanisms to force that responsibility. Government regulation, consumer boycotts and protests, labor strikes etc.

Basically, for CSR and its subsequent affect on corporate reputation, it is far better to take responsibility than be made responsible.

And it is this key distinction where reputations are made.

We at MWW counsel our clients in a similar vein – that a hodgepodge of philanthropy, volunteering, and other good works do not create CSR. If they don’t connect to business or truly matter to stakeholders, then they might be nice things to do, but not necessarily responsible things. But if done through a consistent framework with all the consideration given other elements of business strategy, CSR helps identify efficiencies, creates competitive advantage, engages consumers and customers, and oh yeah, helps solve big problems.

Mike Sacks can be reached at msacks@mww.com.

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Practical Advice on Creating a Culture for Service
March 30, 2010

Some more great takeaways from the Conference Board event on Customer Service….5 Simple Steps for Creating a Culture Where Customer Service and Experience Is King:

1. Define success in an actionable way – Every company has something in their vision, mission or values that talks about creating a great customer experience. The organizations that are successful at achieving this break it down into meaningful actions, that are relevant to the day to day job activities…..providing not just a “what” but also a “how to.”

2. Track success through regular measurement – by the time your customer satisfaction scores are low, the damage is done. Identify the early warning indicators of success (or failure) and measure and track them so you can course correct along the way. Social media can be a great early warning system of what is going right, or not, long before you see it in your data.

3. Leaders must walk the talk – Ed Reilly of the AMA said it best “There is no substitute for unfiltered information.” CEO’s and leaders that work on the front line – for real, not for a reality TV show – who take customer service calls and are active and involved on an operational level on a regular basis have a real understanding of the issues. And because they are demonstrating the desired behaviors – not just talking about them – their team understands that this is a serious mandate and not a values statement to hang on the wall.

4. Make sure that all employees understand their role in customer service – not just customer contact employees. Customer delight begins with a great product (design and development and production), that is available where and when they want it (production, sales and inventory management).

5. Align performance measurement with these goals – You need to reward employees for the things that are important to your organization…and really, what could be more important than exceeding your customer’s expectations.

Simple to say. Harder to do.

Carreen Winters can be reached at cwinters@mww.com

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Customers Really Don’t Come First…..But Don’t Say That to Your Customers
March 29, 2010

Last week I had the privilege of moderating a panel at a seminar by The Conference Board on the customer experience. It was a great conference with leaders from iconic service and experience organizations like Disney, Starbucks and the Girl Scouts.

Our session was about creating a culture for service, and our panelists provided some great insights into this critical subject matter.

Stan Hart of Ritter & Associates talked about the importance of measurement in order to translate the language of the importance of service into action at all levels of the organization.

Ed Reilly of the American Management Association provided some great context around the reason that service and customer service has been elevated to a C-level imperative, and provided great guidance on how to provide the leadership and training that “walks the talk.”

For me the proverbial “a-ha” moment came during a session led by Michael Chen, CEO of GE Commercial Finance. He talked about the 4 I’s of creating a culture for success, and reminded us of the window of Batman’s girlfriend who told us (in Batman Returns) that actions are more important than intentions. He also said “Customers don’t come first – your employees do. Treat your employees like customers, and they will treat your customers like royalty.”

It’s great to hear that coming from a CEO, because this simple truth is so often forgotten as companies become entangled in creating measurement protocols, rolling out CRM programs and otherwise focusing their customer service resources externally. Your employees are the single greatest asset you have in achieving customer satisfaction – they impact every step in the process. And the power of social media means that you are only as good as the worst decisions of a single employee. Just ask Domino’s – who found itself battling a massive reputational threat after a couple of part time employees posted some distasteful video on YouTube.

Carreen Winters can be reached at cwinters@mww.com

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Tips for the Healthcare Campaign
March 26, 2010

The cheering this week at President Obama’s healthcare reform signing ceremony was loud, lusty and long, but the marketing of this momentous decision will be much longer and probably a lot louder.

I worked for fifteen years on healthcare reform, culminating in the struggle over the Clinton initiative in the mid-90’s, so I have some experience in mounting the PR campaigns that are necessary to sell healthcare reform and its hard-to-explain, my-eyes-glaze-over complexity to the American public. The Christian Science Monitor reported that the Obama administration has decided to mount a 7-month PR campaign to explain and promote this new reform package, all leading up to the midterm November election. Here are a few humble tips for the upcoming campaign from a veteran of the healthcare wars:

- Don’t oversell. The package that the Senate and then the House of Representatives cobbled together isn’t optimal, since it phases in over four years, doesn’t cover everyone, contains an individual mandate and has no public option. Building up unreasonable expectations and then slowly deflating them is the worst possible scenario, leading inevitably to disappointment, cynicism and more anti-government rhetoric.

- Call the insurance companies out on their premiums. America has an employer-based, private insurance system, and this reform doesn’t change that. Polls show consistently that Americans like their doctors and their hospitals, but don’t like their insurance companies – a fact the administration discovered late in the game when they changed the name of the campaign from health care reform to health insurance reform. What the resulting reform does do is place a few more restrictions on the insurance industry — but it does not incorporate any mechanism for constraining premiums. Now is the time for the administration to put the onus of responsibility for healthcare cost inflation on the health insurance industry, asking them very publicly to fully disclose their executive salaries and bonuses and their profit margins, and justify any big price increases to the already-covered.

- Stick to the facts. The President went over the benefits of the legislation this morning in his speech before signing the bill – but understandably, in that moment of triumph, didn’t list the drawbacks of the bill. His talking points over the next seven months, which Congressional leaders would do well to follow, should also point out the things the bill doesn’t do – constrain costs and premiums, cover everyone, or prevent insurance costs from rising steeply for the under-30 age group.

- And finally, don’t forget that just about every poll ever taken, including the many decades the Gallup Organization has asked the question, have shown that more than ninety percent of Americans consistently believe that healthcare is a right and not a privilege. We don’t agree on anything like we agree on that. In the whole “Life, Liberty and the Pursuit of Happiness” equation, life always comes first. If the administration bases its campaign on that one incontrovertible unifying factor, it will have a good shot at convincing the skeptics that this reform is in their interest.

David Langness can be reached at dlangness@mww.com.

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Note to Corporations That Do the Right Thing: Don't Fear the Facebook
March 24, 2010

Companies often find themselves in a dilemma that goes something like this: “I want to connect with people through social media but I’m worried about what I can’t control. People may say bad things about us.” So?

Companies that do the right thing have an understanding of their issues and risks and know in their hearts that they are taking appropriate steps to be good corporate citizens have nothing to fear. And, in fact, have an opportunity to tell their story through social media.

Take the recent palm oil debacle Nestle faced. It’s not as if Nestle didn’t know about Greenpeace’s concerns. Nestle and others in its space have been dealing with activist concerns for decades. And Nestle, like others in its space, have taken numerous steps and made active commitments to protect the environment in communities in which they do business. But, activist groups exist to push companies harder and Nestle knows that. So rather than get defensive — even belligerent — over Greenpeace’s use of social media to push Nestle, why didn’t Nestle use it as an opportunity to tell the story of their efforts to do good.

True, the dialogue would have continued and the activists would have critiqued but both sides of the story would have been aired and the story would have lived out its “news cycle”. Instead, by taking on the activists in a defensive manner, Nestle missed an opportunity. Nestle wouldn’t have handled a live encounter without arming themselves with their positive actions and positive messages, nor would they have dealt with a reporter without having the balanced story at hand. Social media is no different.

Establishing a social media policy — just like the media policy most companies use — is one way to avoid such situations while also taking advantage of the opportunity for transparent dialogue that is the primary value of social engagement.

Ame Wadler can be reached at awadler@mww.com.

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Cracking the Code on Being a Most Admired Company
March 23, 2010

Fortune’s Most Admired Companies list is undoubtedly sparking renewed conversations by reputation managers about their place on the list. This list is often used as the single greatest test of efficacy of reputation programs. While the editorial team at Fortune certainly holds influence, they are quite transparent about the process, which emphasis the opinion of executives/peers, directors and analyst. Geoff Colvin’s column in the latest issue provides great support for my point of view that reputation begins and ends with employee engagement.

Employees at all levels are the universal touch-point for all of your constituencies – and often, your reputation is only as good (or not) as the experience your customers, shareholders, business partners, communities and influencers have with those employees. Reputation begins at home. Colvin’s column states it eloquently:

“It turns out that this year’s leaders — the industry champs that really did come through the recession on top, such as UPS, Disney, McDonald’s, and Marriott International — differ from the stragglers in at least one way: They actually believe what every company proclaims about people being their most valuable asset.”

The Hay Group’s survey methodology debunks a lot of myths for reputation management practitioners, and indicates that the ability to attract and retain talent is their number 1 indicator – above all of the other Building Blocks of Reputation such as quality of management, innovation, long term investment value and even quality of product services.

As we look at the list of influencers on the Fortune survey – directors, peer executives, analysts – it makes a great case for the importance of executive visibility programs, such as our CEO EquityBuilder™ programs, which help create, reinforce and preserve the admiration of these influencers for leaders, and by association, their companies.

Clearly this list isn’t perfect….Toyota still ranks well, although the data would clearly be different if the survey were re-done today. But if you didn’t make the list, or want to improve your ranking, begin by looking within. Reputation begins at home.

Carreen Winters can be reached at cwinters@mww.com.

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Sweat the Small Stuff
March 16, 2010

Would you spend $250 for a bottle of water? How about $750? How about … well, pick a multiple.

Wondering what a simple bottle of water has to do with reputation? Sometimes, it’s everything. Let me explain.

A friend of mine recently traveled to wine country with his wife and 1-year old son. After a long drive, they checked into a lovely boutique hotel that prides itself on customer service. In fact, this particular hotel pledges to deliver “an exceptional customer experience every time.” They infuse this goal in most of their customer-facing marketing efforts, particularly on their Facebook fan page and their Twitter feed.

As they unpacked in their room, their son had one of those meltdowns that all of us parents can relate to. My friend called the desk and asked if a bottle of water could be sent up so they could prepare some baby formula. Sorry, the desk clerk told them. Room service was closed for the evening and there was no way to accommodate the request.

My friend quickly sent out a tweet about his experience to the several hundred people on his Twitter account. After he returned home, he posted a customer review on the popular social media site, Yelp!

So the hotel had a seemingly small misstep over a $1 bottle of water and the incident was chronicled on several social media channels. No big deal, right? After all, this hotel spends thousands of dollars annually on advertising, which will be much more powerful than a post on Twitter and Facebook. Unfortunately, the opposite is true; multiple consumer surveys show that nearly 80 percent of consumers trust peer recommendations, and less than 15 percent trust advertising.

So how much did that bottle of water cost? My friend won’t be returning, which means they lose several future nights of room and restaurant revenue. And an unflattering review on a travel referral site like Yelp! likely will drive others away, meaning more lost revenue. So it’s not hard to imagine that a $1 bottle of water actually cost this hotel $1,000 or more.

In this era of social media and citizen journalists, your reputation balances on a razor’s edge. Simple decisions and rote responses can have a lasting impact on your business. Now more than ever, the devil is in the details and businesses, from the CEO down to the night desk clerk, have to sweat the small stuff.

Bob Silver can be reached at bsilver@mww.com. Follow him on Twitter @Bob_Silver.

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The Shoemaker’s Children Get Shoes
March 12, 2010

As agency people, we spend hours each day thinking about clients and acting on their behalf. And for the corporate communications team at MWW Group, that means the ongoing Reputation Management activities for our clients.

Last night, at the PRWeek Awards, MWW Group’s own reputation got some care and feeding of its own. We were finalists for three client programs:

• Our labor and employee engagement work for Harrah’s Entertainment.
• Our deal work for Emerisque in their acquisition of Hartmarx
• Special event work for IKEA

We took home the prize in two out of three – Emerisque and Ikea.

Congrats to the agency for a great showing last night, and our colleagues in consumer marketing for the Ikea win. And a very special shout out to my colleagues on the corporate team who worked on these two very high profile, intense programs where the stakes were high, the nights were long and the challenges were plentiful.

I’d also like to thank Emerisque for being the ideal client – they are strategic about the use of communications and gave us a seat at the table. They are willing to take a risk when the payoff potential is great. And they appreciate great work, and make it fun along the way. It doesn’t get better than that.

For most of us, the most important metric of success is client satisfaction. But it is always great to be recognized by your peers. Thanks PRWeek!

Carreen Winters can be reached at cwinters@mww.com.

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Walmart and Why We Are All Reputation Managers
March 11, 2010

Someone was in a Walmart in Louisiana, and took a picture of a black and white Barbie, the exact same Barbie save for skin tone, sitting side by side on the shelf. The black Barbie was cheaper than the white Barbie.

The photo found its way to a humor website, then to a Latino website, and ultimately, into an ABC News report among others, then cycled back into the blogosphere.

I don’t believe for a second there was a sinister motivation on Walmart’s part. ABC had comment from experts that feel the same. I, like them, think it was just a stupid mistake. Perhaps “smart business,” based on very business-y calculations – inventory, demand, pricing. But not smart business – boneheaded, really – in that it ignored what a customer might think, how it might be perceived, and the challenges facing Walmart’s reputation in general.

Two things are salient here.

One is that social media and mainstream news are increasingly not separate things. It isn’t breaking news, but a customer with a cell phone camera can imperil your reputation. Have you ever watched the news – be it CNN or MSNBC or Fox – in the middle of the day? It’s dotted with reporting , a term I use loosely here, on what a celebrity said on Twitter or what video is ripping hot on YouTube. We have to consider this and think more critically.

The other is the sometimes yawning gap between intention and perception. That’s where reputation much of the time lives. The spokesperson for Walmart said “Pricing like items differently is a part of inventory management in retailing.” No question, makes sense, perfectly reasonable. But I’m sure they understand why in this particular case that’s not the whole story.

Reputation managers must advocate to their company or their client that we are all communicators now, like it or not, and we need to take our thinking one or two steps beyond our job description. Of course, with 20/20 hindsight, an inventory or pricing manager should have recognized the problem here.

We should try for the foresight.

Mike Sacks can be reached at msacks@mww.com.

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The True Value of Military Leadership in Corporate America
March 10, 2010

I just finished reading Fortune Magazine’s cover story on the rising popularity of recruiting military officers for leadership. It is easy to understand how a twenty-something whose leadership skills were honed in combat would be more qualified for leadership than the candidate whose only leadership test has been winning the Greek Week tug of war.

Studies show that companies with military leaders outperform their peers. And the correlation between military service and leadership ability is well documented. But the Fortune article misses the boat with a noticeably absent area of discussion – ethics and integrity.

The percentage of Military CEO’s has declined from more than half just a generation or two ago, to as low as 5% today, depending on the study. Over the same period we’ve also seen a steady rise in ethics-based scandals that have wiped out shareholders, required taxpayer bailouts, and created casualties like high unemployment, injury, sickness and even death.

Those who serve in our armed forces are guided by a code of honor. They live, and often die, by this code that requires service to their unit and their country before personal gain. Semper Fi. Be All You Can Be. They carry the wounded, and bury the dead. The slogans are voluminous, yet singular in their emphasis on the values that have been too often lost in corner offices and boardrooms around the world.

Yes, these men and women who launched their careers have battle proven leadership ability. But even more importantly they have honor. And the courage to do what is right, even if there is risk of casualties. They are worthy of respect and worthy of trust. They are ready to lead, with integrity. And they are looking to capture the corner office instead of the hill.

Carreen Winters can be reached at cwinters@mww.com.

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