Monthly Archives: June 2011
Say it Ain’t So Joe
June 28, 2011
The names Rickey, Robinson, O’Malley, Koufax, Alston, Drysdale and Sculley, among a pantheon of other stars made the Dodgers, be they Brooklyn or Los Angeles, one of sports’ most storied, popular and respected franchises with a stellar reputation irrespective of which coast they played on. They were a family that millions of families across the country lived and died for.
Just when you thought the current Dodger owners, the warring McCourts, known for extravagance, spite, vitriol, mismanagement and everything antithetical to the precepts of Dodger Blue, had done all they could to destroy the reputation of the team in a few short years, comes yesterday’s bankruptcy filing.
At the end of the day, sports is a business and successful corporate leaders know the importance of reputation and the powerful influence it has on the actions of consumers, investors and employees. A critical component of corporate reputation is the reputation of an organization’s executives and here is where the McCourts’ very public battles at the expense of the Dodgers made them and unfortunately the team they were fighting over, a mockery. The McCourts’ fiasco has been a turnoff for the Dodger faithful, a distraction for the players, a black eye for baseball and has seemingly destroyed the goodwill the team had accumulated in Los Angeles since 1958.
While Chapter 11 can tarnish a reputation, many companies survive and even flourish after a court protected restructuring (name your airline, retailer or car company). But these resurrections are frequently tied to new executives taking the helm and slowly rebuilding the trust of key audiences and the company’s reputation. Like the McCourts, Angelinos’ love affair with the Dodgers has waned. The first step in rebuilding the Dodgers’ reputation has to be to “throw them bums out.”
Labor’s big defeat
June 17, 2011
It took a while to resolve the Wisconsin labor strife since the frigid winter when thousands marched in the state capital to protest the impending limits on collective bargaining for public union workers. But it finally happened this week when the Wisconsin Supreme Court on Wednesday upheld the governor’s bill to limit such bargaining and require more substantial contributions to health and retirement benefits.
It’s been a long time since such massive labor protests erupted in such fury and many pundits at the time across the airwaves and in the blogosphere were heralding the resurgence of big labor not only in the public arena, but in the private sector as well.
Not so fast. With the state’s Supreme Court ruling, public unions are now going to contribute more to benefits just like other unions at other large public companies in Wisconsin and all over the country. Just like non-union employees do, too.
The 4-3 vote on the high court was close but now workers must recertify votes for public union representation annually and their membership dues paying is voluntary.
While the workers in the Wisconsin events are public sector employees, the message to companies with union representation cannot be overlooked. And that is while rancor and fury and threats may make for good TV in the short term, in the end, cooler heads will prevail and consider what’s fair and what isn’t considering a company’s, and yes even a state’s, financial condition.
With massive budget shortfalls in various union pension funds and soaring health-care costs all over the country – for both public and private entities – the fight is just beginning.
Companies and Politicians Get Cracking on Hacking
June 17, 2011
Last month, we discussed Sony’s fumbling public response to the hacking of 100 million Playstation/Online Entertainment accounts and how a company’s reputation, brand equity and even business is tied to how it deals with a crisis. We reiterated the precepts of crisis communications 101– the need to have a plan in place, getting factual information out quickly, taking responsibility, being transparent and exerting control of the story in a crisis situation.
In today’s Wall Street Journal, Ben Worthen and Anton Troianovski, reference the Sony case when commenting on the recent hacking incident at Citibank, and discuss how smart companies are bringing together a team of experts – lawyers, communications professionals and forensic investigators – to help plan the strategic and tactical response to a data breach incident.
If recent history and the Sony debacle is not a good enough reason for corporate executives and boards to get moving, Congress is working on some incentives of its own. Concurrent with hearings on Capitol Hill that delivered a public smackdown of Sony, legislation was introduced in the House and Senate seeking to institute uniform national standards for data security and data breach notification (currently the subject of a hodge podge of state laws). The bills contain requirements specifying that law enforcement needs to be informed within 48 hours after a breach occurs and customers must notify customers and the public 48 hours after an incident assessment is completed.
Data breaches will continue to be a reality in the digital age. Not a week goes by without a hacking story in the news and no sector is immune – retail, financial services, gaming, defense, data security and government have all had high profile data breaches in recent weeks. Any company that does not have a plan that covers when to disclose, how to disclose and the steps needed to reassure key constituencies regarding a data breach is risking not only its reputation but also its bottom line.
Celebrations and Citizenship
June 15, 2011
Today is IBM’s 100th Birthday….it is also my daughter’s 16th birthday – so it is a big day all around. Unlike the celebration I am planning – which includes a party bus and a jam-packed day (and night) of entertainment, IBM is celebrating their day with service to the community.
This is an important trend in a citizenship movement by major corporations…the notion that service to others is more important than simple philanthropy. Checks to support the arts, medical research and hosting galas are all fine. Indeed, many worthwhile causes couldn’t survive without it. But more progressive organizations are looking at their ability to impact their communities in a hands-on, service oriented way.
For CSR to meaningful, it must be relevant – internally and externally. A service-oriented approach bridges that relevance gap in one simple swoop. Employees who are involved in a hands-on service project feel better about their companies, and feel proud to be a part of them. And demonstration of philanthropy and citizenship is more accretive to reputation than talking about it.
Here are some examples of great companies and brands who bring this philosophy to life:
• Starbucks has partnered with the HandsOn Network, a non-profit that organizes volunteer projects, and has a goal to donate 1 million community service hours from its employees by 2015. This is in addition to the $22.4 million Starbucks distributed in 2010 in corporate giving and grants.
• Disney’s VoluntEARS program allows employees to volunteer for causes of their choosing and aids in raising money for charities that employees support. Disney VoluntEARS assist in more than 2,200 projects through 495,000 hours annually. Employees also raised $1.7 million through Disney’s assistance.
• Intel supports its employees to volunteer all around the world and matches every volunteer hour with a monetary contribution. Intel also uses its employees’ capabilities to establish technology in classrooms in developing countries.
Similar programs from MWW clients – Deloitte’s Impact Day, a massive celebration of the organization’s year-round commitment to workplace volunteerism, and Nikon’s work in local communities both home and abroad contribute to a service-oriented approach.
Relevant approaches to worthwhile causes, which is meaningful CSR.
On Leadership and Legacy
June 13, 2011
From the moment a leader takes office, his or legacy is being created. Some leaders think about it, a lot….others don’t. This piece on Forbes makes the point that legacy is created by the defining moments of leadership – like Steve Jobs introducing the iPad – and that you need to be thinking about your legacy from the first day in office.
I agree with the notion that defining moments have an impact on legacy…but we don’t always recognize a defining moment, or have the ability to plan for it. Take President George W. Bush – for me, September 11 provided two defining moments of his presidency (not including the Michael Moore footage of him in the classroom). The first, when he told the rescue workers “We’ve heard you, and the whole world hears you.” This was seemingly a spontaneous reaction to unimaginable devastation and heartbreak. He probably didn’t plan it, but it was an authentic defining moment – whether you are a Bush fan or not. The second was an orchestrated planned event where he declared “Mission Accomplished” – about a mission that was far from accomplished. Manufactured, forced and inauthentic. Two defining moments of a monumental event…both contributed to his legacy.
If those of us who work with leaders do our jobs properly, the moments we can plan for – the unveiling of a new product, a keynote address, announcement of a major corporate strategy – will accrue positive reputational points for our clients and contribute to a lasting legacy.
But to me, legacy is equally shaped by how leaders lead in the moments they couldn’t plan or anticipate. How do they weather adversity? Calm the troubled waters?
I would argue that leaders who are distracted by their legacy, from the first day they assume a position, may not be as effective at creating that legacy as those who focus on leadership instead. Make the most of those defining moments when they arise, but lead first….an enduring legacy will follow.
To Be a Thought Leader, You Have to Have Thoughts
June 10, 2011
To be a thought leader, you have to have thoughts.
It is up there with other PR industry truisms, like to get in the newspaper, you have to have news. (Which isn’t always true, but you get the point.)
Over the course of my 20-year career, I’ve been fortunate to work with many CEOs and CXOs, and am often asked to opine on what their platforms should be, or what they should “talk about.” This inevitably leads to a discussion about authenticity, ownability of a topic and relevance beyond the four walls of the organization.
But the most important thing of all is authenticity….does the executive really care about the topic? Is it his or her point of view? That’s why I was thrilled yesterday when I asked a client, well what does (CEO’s name here) think about this issue? And without skipping a beat she told me, succinctly, powerfully and emphatically, what he thought. That’s a good day.
Achieving relevance and connections among all of the noise is difficult. And the world we live in is complicated…by the time you’ve figured out the rules, they’ve changed. The twitter-verse is filled with advice about how to apologize, how to tweet, how to, how to, how to…. And much of the advice is good. But sometimes, complexity’s best remedy is simplicity.
Just tell people what you think? Because a thought leader has to have thoughts.
Reputation Begins At Home: Why Companies with “Top Reputations” Stay There, Despite Major Crises
June 9, 2011
What does that mean?
First, when it comes to lists and rankings, perception lags reality – good or bad. It takes time for the lists to reflect recent events. It also suggests that there is merit to the schools of thought around goodwill banks, and my personal POV that how you respond to the crisis can have more significance than the crisis itself. But there are some other interesting learnings here:
1. Reputation begins at home. A key driver of Google’s performance on this reputation score was their workplace culture, governance and citizenship. Perhaps Google.org wasn’t a bust after all. To be considered for the list, companies had to rank high in their home market as a “table stakes” for consideration.
2. The Art of Storytelling – a quick breeze through the Top 10 suggests that the ability to tell a great story – to stand for something beyond just your products or services…whether it is innovation and design (Apple), family, fun and entertainment (Disney) or the Volkswagen lifestyle.
3. You’ve got to be relevant to consumers, even if you don’t sell directly to consumers – It is no surprise the big winners on this list are consumer brands, but it isn’t a requirement. Intel, No. 9 on the list, doesn’t sell anything to consumer directly. But they’ve done a great job making “Intel Inside” relevant to an audience far beyond the decision maker at Dell, for example.
The Reputation Institute also points out a key fact – the leaders on this list don’t treat Reputation as a brand imperative – they treat it as a business imperative – ingrained into their policies, business practices and operations.
First Do No Harm
June 7, 2011
Those words from the Hippocratic Oath are the principle governing emergency medical services and also a maxim for crisis communications. Unfortunately, they are too often forgotten in the rush to respond to a crisis situation and get out information. Rather than discuss the compromising pictures and botched cover-up of the latest misbehaving Member of Congress, I would like to focus on the less salacious topic of Spanish cucumbers.
The deadly E. Coli outbreak in Europe has seen German officials scrambling to find answers and reassure a scared public that has largely stopped eating fresh vegetables (something my daughter is seeking to do to show her solidarity with her Swedish relatives). Unfortunately, the German officials violated the first rule of crisis communications – never speculate on the cause of the issue and only dispense information that you are sure is correct.
First, they blamed the outbreak on Spanish cucumbers, which devastated the local farming sector and put another dagger in the already tumbling Spanish economy. Nice try but not true. The authorities in Berlin next pointed the finger at bean sprouts from an organic farm in Northern Germany, causing that facility to close down. With testing of the sprouts near complete, it now appears that this also is not the cause. Strike two.
Meanwhile, greengrocers and farmers across Europe are reeling and consumers are ready to join them in taking up pitchforks. The only winners so far are livestock and zoo animals who are feasting on discarded vegetables at the peak of the growing season.
Getting out in front of a crisis and setting the tone for communications is critical, particularly in the digital age. But the need for speed must be tempered by the cautionary words of Hippocrates to “first do no harm.” Sadly, the German government disregarded this and has made a bad situation worse, damaging their reputation at the same time.
Harris Interactive came out recently with its annual Reputation Quotient Survey and there are some interesting developments.
The top spot in 2010 went to Berkshire Hathaway but not so this year after the Sokol fiasco, which we’ve previously written about here in Return on Reputation. Now Berkshire Hathaway is down to No. 4 – not bad, all things considered, but still a precipitous drop from a previous, largely untarnished image. Who dropped off the top 10 list entirely? Coke and Microsoft…replaced by Disney and Apple. Google moved up two spots to rank No. 1.
What does all this mean for companies who care about their reputation? That it’s a fickle thing and as Warren Buffett famously said, takes an instant to evaporate. Not only that, but everyone has a say these days in what kind of company you are. Google came in first for its financial performance and workplace environment…proof positive that all stakeholders weigh in when it comes to reputation.
Investors and employees clearly gave Google a boost on the ladder in today’s 24/7 interconnected world, and that matters. Every company spends a lot of time thinking about how they communicate with Wall Street – conference calls, press releases, one-on-ones with big institutional investors. But probably not as much time focusing on the way they talk to employees and how they empower their employees to talk about the company, too. Smart companies have “ambassador” employees blogging and participating on Facebook, Twitter, etc., after implementing forward-looking social media policies that lay out the ground rules. Google it and you’ll see.