Without being able to do an in depth analysis of the specifics and needs of the bank, I summarised his basic needs as:
1. There is a need to start a strategic conversation process in the Bank about Stakeholder Management
2. Stakeholder Management are currently fragmented and there is a need for a more unified and strategic approach to its management
3. Special Focus needs to be placed on changing social reputation issues and stakeholder actions
This is what I suggested to improve stakeholder relationship management within the Bank.
My approach has always been to marry the discipline of Stakeholder Management with that of Corporate Reputation Management . I believe that that is a sound approach – after all an organization’s most important asset is its reputation, yet it is also its biggest risk.
My approach rests on the fact that an organization’s reputation is derived from the way that an organization is seen, heard about, spoken about and written about by stakeholders.
Reputation Risk emerges when the reasonable expectations of stakeholders are not met when it comes to performance and behaviour. Thus, if an organization wants to optimise its reputation, it has to carefully manage the interplay between and relationships with various stakeholders.
Whatever is done in Stakeholder Management impacts directly on the reputation of the institution. It is much like juggling a number of balls. I believe that my interventions and consulting approach has something powerful and dynamic to add in that respect.
There are some clear benefits from what I suggest. I think that this process will enable you to raise the profile and positioning of the department (I am not suggesting the building of an empire – but more a knowledge management capability – one of influence and real power – not position power per se), raise the department’s level of influence and ultimately make an indelible impact on your own and the department’s reputation.
Here are the Stages of the Development Cycle as I see them:
Stage 1: Create a Common Reference & Framework
Ask any manager or SME in the Bank to define the word Stakeholder Management to you. Ask them what the Universal Clarkson Principles of SRM (Stakeholder Relationship Management) is about. Would I be right to say only a handful will know? Do the staff in CSI and Issues Management know these concepts? Do they know how important it is, to redefine stakeholders based on an issue or project every single time?
So the first objective will need to be to raise levels of awareness and understanding through the development of common definitions and terminologies. That we can do through a number of high-level presentations, workshops and other inclusive interventions.
1.1. Expose the Board and Executive Team to a short intervention (1 hour to 3 Hours max on Stakeholder Reputation) Reason: Waterfalls flow top to bottom
1.2. Expose the Marketing, Corporate Affairs and Communication team members to the concepts and ideas of Stakeholder Reputation Management by getting them to attend 2 day workshops on SRM (Example course outline - http://stakeholderreputation.invite43.com/). The reason I suggest this is that they are involved in aspects of stakeholder management and can act as catalysts to further the approach in the Bank – like a virus spreading.
1.3. Expose BU Executives, Line management and HOD’s to the concepts and ideas of Stakeholder Reputation Management by getting them to attend 2 day workshops on SRM . To do this will need high-level management commitment and support, liaison with Learning & Development, OD, and Performance Management executives.
1.4. Start a common language process within the Bank by using vehicles such as the internal newsletter and tools such as the Intranet to get the message out there.
1.5. Develop a Series of Management Protocols and Guidelines (The Strategic Rules of Engagement that I call them) that can be used as reference points in the Bank on how to establish relationships, leverage and enhance those relationships with Stakeholders (Please note that I did not say manage – I don’t think you manage a relationship, you can manage the people involved, the processes, the tools but not the relationship – if you differ of the opinion let’s debate it). These guidelines can be used as training, coaching and performance management tools and incorporated into the knowledge management system of the Bank.
The information for these guides will essentially come from the workshops that I run and record as well as literature research and other information, and the on-going communication from delegates as they deal with stakeholders and share that information with us.
Stage 2: Formalise Stakeholder Management
2.1 This stage will include a more standardised approach to measuring stakeholder relationships and will entail the development of measurement criteria and tools – as I suggested a type of dashboard effect. (It is at this stage where I see decisions be taken about the positioning of SSRM in the Bank).
2.2 It will entail the inclusion of Stakeholder Management into the Bank’s existing Performance Management system such as Balanced Scorecards etc.
My reasoning is that you cannot hold an employee accountable for relationships with stakeholders if you have not empowered him or her with specific knowledge on how to do so.
I used the example today of diversity training. Diversity training is a form of stakeholder training as it empowers people to understand their own inherent prejudices, deal with them and move on in ways that can only be positive.
Most important this whole process needs a Champion. Someone that will be prepared to take risk and have the passion to push for this within the Bank. This is a pivotal role. In my 25 years of internal and external consulting any process without a Champion have little chance of succeeding. (As Guy Pinchot wrote years ago: “Change activates the Corporate Immune Response”. You need to deal and push through those boundaries).
These are my immediate thoughts. Based on experience, this is not an overnight or a singular workshop experience. It will need resource application – dedication of effort, time and expertise.
Here is an interesting article that contains a number of important lessons for Stakeholder Managers – Reconnect business success with social progress.
In my mind, it speaks of the necessity to integrate sustainability thinking into the everyday processes of the organization, whether it is choosing paper for the photocopier or pressing a button spilling effluent into a pristine water ecosystem.
Creating Shared value fits into the Inclusive Stakeholder Management thinking model and is in line with the recommendations of the King 3 Code on Corporate Governance.
In a stakeholder inclusive approach, the organisation considers the legitimate interests and expectations of stakeholders on the basis that this is in the best interests of the company, and not merely as an instrument to serve the interests of the shareholder. What this means in practice is that in the ‘stakeholder inclusive’ model, the legitimate interests and expectations of stakeholders are considered when deciding in the best interests of the company.
The integration and trade-offs between various stakeholders are then made on a case-by-case basis, to serve the best interests of the company. The shareholder, onthe premise of this approach, does not have a predetermined place of precedence over other stakeholders. However, the interests of the shareholder or any other stakeholder may be afforded precedence based on what is believed to serve the best interests of the company at that point.
The best interests of the company should be interpreted within the parameters of the company as a sustainable enterprise and the company as a responsible corporate citizen. This approach gives effect to the notion of redefining success in terms of lasting positive effects for all stakeholders, as explained above.
Creating Shared Value for all.
Stakeholders expect it. And smart companies are doing it: integrating their reporting of financial and nonfinancial performance in order to improve sustainable strategy.
How can managers better identify, describe, and confront the issues of environmental and social sustainability that their companies increasingly encounter? One answer is One Report, a method of integrating information about financial and nonfinancial performance into a single, jargon-free document.
HBS senior lecturer Robert G. Eccles and coauthor Michael P. Krzus explain the benefits and value of the One Report method. Plus: book excerpt from One Report: Integrated Reporting for a Sustainable Strategy.
Leslie Gaines-Ross, Chief Reputation Strategist of Weber Shandwick, commented in the article that "In today’s multi-stakeholder and multi-channel society, CEOs are increasingly concerned about reputational risk, both for their company and themselves. Now is the time for CEOs to carefully explain their companies to stakeholders, engage in productive two-way conversations, and clearly communicate their contributions to the market and society.
If stakeholders are left on their own to unify all the information they need about an enterprise, companies could find themselves vulnerable to misinformation and hearsay and put their reputations at risk."
Just reading this quote also defines a new look at the use of social media in an organisation. How to integrate not just reporting but two-way conversations with stakeholders. And, the importance of integrating reporting and use of social media into a company’s strategic communications plan.
Interesting and essential reading for Stakeholder Reputation Managers.
In the not so distant past, complaints were regarded as a customer service issue and the responsibility of the Customer Service department to solve.
But no longer.
Social Media such as blogs, Twitter, Facebook and mobile phones have changed the potential impact of a negative experience into one that could potentially be harmful to not just a brand, but also the reputation of the organisation. It is now a Reputation Manager issue.
Let’s look at how the process of complaining have evolved.
A Complaint normally arises when there is an imbalance between a customer’s expectations and reality. Karl-Sven Erikson called this the Moment of Truth experience. The time when a brand and its values become real to the customer.
So this is how a customer would have complained:
1. Customer complains to Company (by telephone, face to face or by letter)
2. Company responds to Customer (typically by letter, e-mail or SMS)
3. If the complaint is ignored, he or she would write again or write to one of the complaint sections in the local newspaper, where their story might be published (Examples – The Star and Beeld newspapers)
4. Some would write and get their story mentioned on websites like http://www.hellopeter.co.za/
5. Based on how the complaint is dealt with, the Customer is either delighted (and may then tell their friends and colleagues in person) or dissatisfied (and will also tell their friends and colleague, but this time a very different story)
With social media, the traditional complaint pattern has been disrupted quite severely. Rather than a private exchange between Customer and Company, the first few steps are public from the very beginning.
From the minute the customer wants to complain their thoughts, experiences and attitudes (whether justified or not) are public knowledge. Complaining on a social network or via Twitter on a mobile phone, now changes the complaint from a rather private and contained experience to a public and widespread affair.
Years ago the experts cited figures that one dissatisfied person could affect 6 people, then the ratio increased to 20 and now I read somewhere the actuaries worked it out that one dissatisfied customer could affect at least 81 others. This on top of the story that we are only a sixth removed away from each other. Today people have the tools with which to damage, if they chose to do so – see my article, The Tools exist to do Damage (http://deonbinneman.wordpress.com/2008/07/24/the-tools-exist-to-do-damage/)
As you can see, it is no longer about responding to a single complaint, but to how to manage an attack that can damage brand reputation. It is now bigger than just a customer service issue.
Blogs, and social media more generally, are a great way for people to distribute their dissatisfaction and thoughts about their experiences. They can get it seen by a large number of people who can link to it, comment on it and reproduce it on their own sites. Very quickly a company has a story that is no longer private and is also no longer contained. Other people have linked to or reproduced the complaint on their own sites and forums. Some publicly and others in places that even companies cannot see.
The ripple effect can be dangerous.
How does a company know who might be reading the negative story? How do they know how many other people might react negatively?
So, how should a company protect itself.
1. Educate your staff about the danger of negative complaints and its impact not just on the brand but on the reputation of the institution. Show them the influence circle, so that they will clearly understand that every single complaint is serious.
2. Improve your monitoring of negative messaging. Ensure that you have good web and traditional media monitoring processes in place. Make sure that you encourage internal communication about delays, potential problems, snags and behavior, so that potential complaints can be minimised.
3. Develop a policy and procedure for responding to complaints – face to face, written and social media. Here is a very good article that was written about the subject, which includes a great process diagram developed by the US Air Force – http://blog.freshnetworks.com/2009/01/how-to-react-if-somebody-writes-about-your-brand-online/ that might help you.
It is essential that your company develop a response procedure that embodies transparency principles, caring principles, the values of the organisation and social media practices.
4. Create avenues for customers to communicate their thoughts and experiences DIRECTLY to the company and ensure that you listen and respond appropriately. Recently President Jacob Zuma had a hotline installed into his office to deal with issues of negative service delivery. He has nearly a hundred staff members attending to the volume. A Bold step, criticised by many, but definitely a step in the right direction.
One of the biggest lessons in Crisis Management can be used here. Bad things happen to good companies. Organisations make mistakes, BUT IT IS HOW we respond and DEAL WITH THE ISSUE that often can make the real difference.
This difference needs to be carefully defined and implemented.
I just read the results of the 10th Edelman Trust Barometer. There are so many lessons for Reputation Managers and those driving strategy and policy in these results.
The survey’s major finding is that nearly two-thirds of informed publics or stakeholders (62%) trust corporations less than they did a year ago.
When respondents in the United States were asked about trust in business in general, only 38% said they trust business to do what is right — a 20% plunge since last year — and only 17% said they trust information from a company’s CEO. Both are lower levels of trust than those Edelman measured in the wakes of Enron, the dot-com bust, and Sept. 11.
"It has been a catastrophic year for business, well beyond the evident destruction in shareholder value and need for emergency government funding," said Richard Edelman, president and CEO, Edelman. "Our survey confirms that it’s going to be harder to rebuild our economies because no institution has captured the trust that business has lost — trust is not a zero-sum game. Business must recast its role in society and move beyond simply generating ROI to its shareholders. It must partner with government and other institutions to assume societal responsibilities."
The Edelman Trust Barometers explores trust in four institutions: business, government, media, and NGOs.
Seventy-seven percent (77%) said they refused to buy products or services from a company they distrusted — the first time the survey explored people’s direct actions toward trusted and distrusted companies. Seventy-two percent (72%) criticized a distrusted company to a friend or colleague.
Respondents say being able to "trust a company" is one of the most important factors in determining a company’s reputation. Among a global audience of 25-to-64-year-olds, trust ranks just below the quality of a company’s products and its treatment of employees — more important than a company’s financial future, job creation, giving back to the community, and innovation in products and services.
Transparency, defined as frequent and honest communication, also outranks those attributes.
Sixty percent (60%) said they need to hear information about a company three to five times before they believe it. Specialists remain the most trusted purveyors of information about a company, with 62% globally saying an academic or expert on a company’s industry or issues would be extremely or very credible. Employees and peers are also considered credible sources of information about a company, with 47% trusting what they hear from "a person like yourself" and 40% trusting conversations they have with employees.
"To regain trust and re-earn the mantle of authority, business needs to make substantive shifts in both policy and communications," said Mr. Edelman. "This means forging partnerships, effecting real change in business practices from executive compensation to supply chain, and communicating all with transparency. Without this type of public engagement, which fuels trust, it will be difficult for business to help rebuild the financial system or earn the license to innovate, much less operate."
Other key findings of the 2009 Edelman Trust Barometer include:
- Trust in nearly every type of news outlet and spokesperson is down from last year. Trust in business magazines and stock or industry analyst reports — last year’s leaders — decreased from 57% to 44% and from 56% to 47%, respectively.
- Globally, only 29% trust information about a company from a CEO — down from 36% last year.
- Only 13% trust corporate or product advertising — down from last year’s low of 20%.
- In the U.K, France, and Germany, trust in business was already at a low level of 36% among our tracking audience of 35-64-year-olds — and stayed there this year. The only EU countries where business made a notable gain in trust were the Netherlands and Sweden.
Learning Points: As I tell audiences over and over, Reputation and trust goes hand in hand together. Violate trust, damage reputation.
About the Edelman Trust Barometer
The 2009 Edelman Trust Barometer is the firm’s 10th trust and credibility survey. The survey was produced by research firm Strategy One and consisted of 30-minute telephone interviews conducted using the fielding services of World One from November 5 – December 14, 2008. The 2009 Edelman Trust Barometer survey sampled 4,475 informed publics in two age groups (25-34 and 35-64). All informed publics met the following criteria: college-educated; household income in the top quartile for their age in their country; read or watch business/news media at least several times a week; follow public policy issues in the news at least several times a week.
Edelman is the world’s largest independent public relations firm, with 3,200 employees in 53 offices worldwide. Edelman was named "Large Agency of the Year" in 2008 by PRWeek and a top-10 firm in the Advertising Age "2007 Agency A-List," the first and only PR firm to receive this recognition. CEO Richard Edelman was honored as "2007 Agency Executive of the Year by both Advertising Age and PRWeek. PRWeek also named Edelman "Large Agency of the Year" in 2006 and awarded the firm its’ "Editor’s Choice" distinction. For more information, visit http://www.edelman.com/trust/2009/.
What’s the point of history other than to teach us ways not to repeat the same mistakes?
This is why it is so gratifying to hear Eskom CEO Jacob Maroga say that the last year’s load-shedding debacle was a learning experience for the organization.
In an article : http://www.southafrica.info/business/economy/infrastructure/eskom-260109.htm,Maroga said his organisation had put in place measures to prevent past mistakes, including putting in place a maintenance schedule,improving infrastructure and beefing up capacity and skills.
“The challenges we faced in the past have made us to be wiser to deal with other challenges,” he said.
Peter Senge was not wrong in his seminal text – The 5th Discipline. I always keep my 5th Discipline Fieldbook – Strategies and Tools for Building a Learning Organization, close to hand. This book I feel is vital reading for any manager driving change.
On Page 49 he writes: ”Learning in organizations means the continuous testing of experience, and the transformation of that experience into knowledge- accessible to the whole organization, and relevant to its core purpose”
Have you read the Fieldbook? It combines OD and practicalities in a way that makes it essential reading for Reputation Managers, Organizational Development and Performance Enhancement experts.
The Mandarin word for Crisis contains two ideograms, the one shows that the word presents opportunity and the other that it presents danger and potential disaster.
This implies that how we respond to challenges is crucial. It is a pity that Eskom had to first damage their reputation, before they started to learn, but it is commendable that they have been prepared to, and are doing so.
Positive action and behavior supplanted by major communication interventions will eventually restore a tarnished reputation.
Fortune’s annual list of 2008′s most laughable moves proves that, even in moments of crisis, stupidity lives on. From former Countrywide CEO’s accidental reply-all e-mail to reports of Steve Jobs’ death (he’s still alive), click through the gallery as Fortune picks the 21 dumbest moments in business for 2008. You won’t know whether to laugh or cry…..
Here is how to turn this list into an organizational learning intervention. (For more on organizational learning, study the works of Peter Senge).
Take each of these examples and turn them into a Lesson for your executives. Share it via e-mail, in the boardroom and face to face.
Organizational development is about enhancing executive leadership through coaching, communication & knowledge sharing.
Personally, I just laughed at Number 5- Mozilo’s ‘Disgusting’ Reply-All
“Already under attack as the overpaid, over-tanned and over-zealous pioneer of subprime mortgages, former Countrywide CEO Angelo Mozilo doesn’t do himself any favors in May after reading a customer’s e-mailed plea for help with his home loan. Intending to forward the missive to a colleague, Mozilo instead hits “reply all” and sends a response calling the beleaguered homeowner’s request “unbelievable” and “disgusting.” Mozilo’s heartfelt reply makes its way onto the Internet — and [he] finds himself out of a job after Bank of America acquires Countrywide in July”
So now we have had slip of the tongue, now we have slip of the finger!
And, how easily can that happen. Years ago we used to say in corporate communication circles that the easiest way to communicate in any organization, was to label a document top secret, and leave it in the office photocopier. Within an hour, the information would be country and company wide.
Now we have e-mail, Skype, Twitter, sms and other tools to add to the flow…..
No wonder the Chinese have a saying: ”Water will always find a way”
Skeletons in closets will be revealed and unfortunately simple errors and dumb moments will be magnified!
And be published and it will be on the Web, where it will remain and haunt you for a long time to come.
If you believed that green was not the in-thing then think again. The plethora of studies and articles certainly point out that your organization’s reputation will be at risk unless it pays close governance to matters relating to safety, health and the environment, especially in the supply chain.
Two stories caught my attention in particular and they are worthwhile taking a look at.
- Greenpeace Releases Supermarket Seafood Sustainability Scorecard
Despite numerous warnings about the crisis of unsustainable seafood, leading US supermarkets are still failing to raise their standards. According to the Greenpeace seafood sustainability scorecard, released today, only Whole Foods, Ahold USA, Target, and Harris Teeter have acceptable seafood practices.
The leading 20 supermarket chains continue to stock endangered seafood such as orange roughy, swordfish, and Chilean sea bass.
None of the companies examined in the survey guarantee that they won’t sell seafood from fisheries that harm sea turtles, dolphins, seals, sea lions, and other marine mammals.
If we aren’t careful, the luxury of having a variety of seafood to choose from at the supermarket may be a thing of the past.
- Time Magazine’s Picks for Top Green Stories of 2008
The stories ranked first, second and third respectively.
The other top green stories in descending order are:
4. The failure of the Warner-Lieberman national carbon cap-and-trade legislation
5. New rules that put a freeze on development of new coal plants
6. The ethanol bubble bursts
7. Polar bears listed as “threatened” under the Endangered Species Act
10. Word of the year: “hypermiling” — that’s squeezing every last mile out your tank by making adjustments to the car (like keeping the tires properly inflated) and making adjustments to driving habits and techniques.
What is your organisation doing about greening the environment? Are you a leader or just a follower?
Have you communicated your efforts? Do not wait until it is too late. Make a splash! Show your stakeholders your efforts!
So, maybe you thought Reputation Risk was just a passing phase.
Well, if you did, I urge you to read the story in the Business Day of Monday 29 September – “‘Tiger Brands cracks whip at the top”. You also may recall that I asked some questions about practices at the company in my blog post of May 2008:
The article in the Business Day mentions that the company secretary and two former executives will lose close on R19 million in share options after being reprimanded by the company for their role in anti-competitive practices involving the firm’s former healthcare subsidiary Adcock Ingram.
Ouch! The dangers of culture and decisionmaking practices.Leif Edvinsson and Michael S. Malone wrote in the book ”Intellectual Capital”, that “If we picture a company as a living organism, say a tree, then half of the mass or more of that tree is underground in the root system. And whereas the flavour of the fruit and the colour of the leaves provides evidence of how healthy that tree is right now, understanding what is going on in the roots is a far more effective way to learn how healthy that tree will be in years to come”
Tiger Brands are really acting now to root out unethical behaviour and restore their credibility. Acting in this visible and powerful manner certainly will assist.
I see that they also will be appointing a Group Compliance Officer. This is a good step, but at the same time it serves as a veiled warning for any company.
Compliance failure interestingly enough has been found to be a major source of Reputation Risk. Compliance has become a very important function and you just have to pick up the phone and contact the Compliance Institute of Southern Africa ( 27 11 642 7974) to learn about the growth in their membership.
Lack of Compliance has a number of impacts:
- It damages Trust and ultimately Reputation
- It is a Poor reflection of Company Standards
- It has Reputation impact – Can we trust you?
- It will invite further scrutiny – Studies for instance show that a company faced with a crisis is 75% more likely to have another crises in the next 30 days or so, because of increased scrutiny.
The term compliance describes the ability to act according to an order, set of rules or request; and the function of the Compliance Department is to ensure that the company provides and maintains an institutional framework that gives assurance that all applicable rules & regulations, laws, policies and procedures are adhered to.
This is the traditional view. Here I must caution that there are actually three levels of compliance to take into account in any framework:
1.Level 1 – compliance with external rules that are imposed upon an organisation as a whole
2.Level 2 – compliance with internal systems of control that are imposed to achieve compliance with the externally imposed rules.
3. Level 3 – This level is often ignored. This is the realm of stakeholder interaction and best practice in a court of public opinion. The conduct of rules govern the manner in which a business conducts itself in its relationships with stakeholders. These rules impose minimum standards of acceptable conduct upon regulated businesses, but what is acceptable?
What are the rules of stakeholder engagement and conduct? Compliance Officers will need to do their homework on the differing rules of engagement in dealing with various stakeholders. They will need to conduct research and attend workshops like the Stakeholder Reputation one so that they can understand which rules is appropriate.
Ultimately, there are 3 key lessons for us as managers from the Tiger Brands fallout and response:
- We need to comply with the laws, rules, regulations and policies that govern behavior of the organisation.
- Each of us is responsible for making sure that our own conduct and the conduct of those we supervise fully complies with all applicable laws and regulations.
- We must recognize that even the appearances of misconduct or impropriety can be damaging to the reputation of the organisation, and act to avoid them.
I have produced a white paper about the steps that I believe is necessary to foster a compliant culture in the organization. If you are interested in it, just e-mail me for a free copy.
An article on GreenBiz.com – ”Fortune 50 Lacks Transparency in Web-Based Environmental Reporting raises some really interesting questions”.
The article states that the majority of Fortune 50 corporations use the Internet to disclose some information on their environmental performance but most are missing opportunities to involve stakeholders, tap the interactive potential of the web, and provide transparency in their reporting, new research suggests.
Researchers at Brigham Young University and KDPaine and Partners set out to test a new model for transparency, a hot topic in the field of corporate communications. After studying environmental information reported in the websites of F50 companies, researchers found that a minority allow for any two-way interaction with stakeholders, which could inform and enhance the type of information they report.
“Make it more interactive,” said Bradley Rawlins, the report’s co-author and chair of Brigham Young’s department of communications. “Open it up and let people comment because you might think you’re doing a good job but until your stakeholders say this is what they need, you don’t know.”
The transparency standard researchers used to measure corporate environmental reporting includes four tenets:
- Stakeholder participation in defining the type of information being reported;
- Usefulness of information;
- Balanced reporting that holds the company accountable for their performance; and a
- Sense of openness in providing information that is easily available, easy to understand and timely.
“Measuring the Transparency of Environmental Sustainability Reporting Through Websites of Fortune 50 Corporations” found that few companies take advantage of the Interactive tools afforded by the Internet, such as blogs or discussion forums. Most reporting is static and one-way. For instance, the web allows for real-time reporting but all companies instead only report progress once a year.
Only 38 percent offered evidence of stakeholder involvement in the development of the reports. Most environmentally reporting was two to three mouse clicks away from the home page.
Many companies didn’t score well in providing balanced information or accountability. For example, only 36 percent reporting some sort of unfavourable result but only 6 percent included an explanation. Most lacked context to help readers understand the results. The results of only 13 percent of companies included third party verification.
Actions to take:
1. Revisit your disclosure practices.
2. I would get a number of SME’s in the same room to brainstorm better ways to disclose information. People from departments such as Corporate Communication, Training and Marketing. Invite consultants skilled in social media, corporate reporting, NLP and accelerated learning to the table.
3. Read books such as the New Rules of Marketing and PR – How to use News releases, Blogs, Podcasting, Viral Marketing & Online Media to Reach Buyers Directly by David Meerman Scott.
4. Benchmark what other companies are doing, not activity benchmarking but rather best practice benchmarking.
5. Alternatively commission research into Points 1 – 4. Reputation is a reflection of what others think about you. Finding ways to engage stakeholders and to communicate better is money well spent, as stakeholders will then understand your organization better and will be able to formulate better opinions.
Let’s talk about name recognition: Why is the Coca-Cola brand so universally identifiable?
Well Coke is consistently being advertised and promoted. It is constantly reinforced in your active mind span. For a consultant the secret will be to get into circulation and make your name be heard. Not only do you have to get into circulation – You have to stay in circulation, or as Christopher Leach has said: ” Nothing succeeds like the appearance of success”
Thus you have to start networking, circulate flyers, write articles, making the talks, advertising and creating publicity to expand your circulation.
Think of what you are selling and how you can improve its circulation. The word”circulation” comes from the Latin root: to form a circle. In terms of your marketing efforts view your efforts in terms of the circles you have or are forming:
Circles of friends, circles of acquaintances, circles of contacts, circles of leads, circles of influential people.
Then work those circles. Make sure they all know what you can offer. Are you on Linkedin? Do you use Twitter? Do you have a profile on Facebook and other social networks?
Coca-Cola South Africa today ran an advertisement thanking South Africa for once again voting…
- Coca-Cola”‘ as South Africa’s Favourite Brand (for the 4th year in a row!)
- Coca-Cola”‘ as SA’s Top Cold Drink
- Coca-Cola”‘ as South Africa’s Second Coolest Brand
- Coca-Cola”‘ as the country’s Second Favourite Advertiser
- Coca-Cola South Africa as the Company That Does The Most To Uplift The Community.*
- and Coca-Cola South Africa as the Third Most Reputable Company in the country.
# The first five ratings are from the 2008 Sunday Times/Markinor Brand and Branding survey, whilst the last rating is from the Reputation Institute Global RepTrak(tm) Pulse 2008 survey.
The Reputation Institute’s research model is built on 7 dimensions of reputation: Products/Services, Innovation, Workplace, Citizenship, Governance, Leadership, and Performance. What interested me was that when two drivers — Governance and Citizenship — are combined, they account for more than 30% of a company’s reputation. This proves that leadership at the top and corporate responsibility are critical to reputation today.
If an organization increases its lead or goes down it is because of the way they are perceived. I recall that in one study it showed that those companies who spend more on PR, tend to achieve higher scores on reputation barometer surveys.
That is not unusual. Out of sight, out of mind. Again we can learn from Coca- Cola. They share their successes and leverage them, so as to leave no doubt in your mind.
They are Number One on the psychological ladder of marketing when it comes to cold drink, and they make sure that they stay there.
One other thing – no company’s reputation is sacrosanct. The better you are, the bigger the chances that you will be under attack. Wikipedia feature a section called Criticism about Coke – it makes for interesting reading about where risks may come from:
Lesson – Leverage your successes and mitigate your risks!
Ah..Ah..! Finally a senior sports person makes a lasting and thought provoking comment.
The best is that it is not just Jackie Stewart but Sir Stirling Moss who said this. He said it would be difficult for Mosley to continue in his role.
“He’s done an enormous amount for motor racing around the world, not just Formula One,” the 78-year-old told the BBC. “I can understand how people feel about him, but I like Max. He’s an interesting and amusing person. Sir Stirling Moss reflects on Max Mosley’s tenure as FIA boss “However, I don’t think his position is tenable – he does not hold the stature he held before.”
Interesting isn’t it? If it was one of the FIA’s junior employees who got blamed for acting as a Nazi even if I just wore a ballerina dress…just in a passion play, what would have happened?
Court Martial? Please leave before we push you? Disciplinary hearing and off you go?
It seems as if the Executive market has a short term memory. Just a few years ago after Enron, questions were raised about the role of the CEO in governance.
I mean, does the words CEO mean?
- CEO: Chief Entertainment Officer. Someone that entertains the guests while everyone else do the work?
- Chief Embezzlement Officer? The one who knows every money market definition but cannot spell sustainability?
- Chief Ethics Officer. The one who knows every trick in the book including the local prosecutor you must phone to have the size of your speeding fine reduced.
- Chief Training Officer. The one who unlike Jack Welch, GE are just too busy to attend any training session, never mind show his face. After all an executive should know it all…. then please nail them when they trade in a close period.. they should have known…
Well, I could continue. I could mention leadership qualities, coaching abilities, …..
The point is that an organization’s reputation and that of a current CEO is intertwined. It is sometimes difficult to separate the two. This adds then to the stress levels of a leader. No longer are you separate to what you do.
Trees at the top gets the most wind and pay. Obviously this will add to your stress levels as a CEO…..
Your whole life and other aspects will be scrutinised.
I have in fact a lot of empathy and understanding for Ozzy Osbourne. He has been honest..BLUNLTY so, and no apology. He has messed up and tried to be better. By the way..tonight I phoned the member of a “leading South African metalcore and asked him for his opinion on the matter. This youngster’s words – I do not like Ozzy’s ideas about drugs, but I respect his attempt to be honest….
CEO’s – I hope you are listening?
Mugabe? Moises (Spanish Cyclist implicated in the Barloworld saga) ? Mosley? Is it it just me or is it all about the MMM”s?
I attended a very interesting presentation today called the “Evolution of Corporate Sustainability & Responsibility (CSR)” at KPMG’s Head Office.
The presentation was conducted by Dr Wayne Visser, an international expert on the subject. I found it very thought provoking and it showed that the field is evolving and not evolving. Evolving in that there are a shift in direction, and not evolving in that there is perhaps too much emphasis in many companies on mere compliance with codes and ethics.
As I was sitting there listening to him, I was struck by the notion that this is an ideal opportunity and time for organisations to become leaders and not just be followers. Innovators who set the tone and can show the rest of the world that their reputations are intact and sustainable.
Innovators who implement lasting structural and social changes in the dimensions in which they operate.
He also showed us an outline of the subjects that is covered in the book “THE A TO Z OF CORPORATE SOCIAL RESPONSIBILITY”. With almost 400 definitions and terms and contributions from over a hundred of the world’s leading thinkers, opinion formers, academics and business people, this book looks like it will become one of the seminal works on the subject. The book is published by Wiley with the ISBN number: 978-0-470-05710-0.
This book will need to be on every Reputation Manager, Stakeholder practitioner and Sustainability, Health, Safety & Environment manager’s bookshelf and I will be sure that you will be referring to it time and time again.
From a Communications point of view, it is absolutely vital to ensure that you and your target audience are on the same wavelength, when it comes to terms and definitions. Definitions sets boundaries, removes obstacles and ensures ”sharing of meaning”’.
If we can think alike about issues such as sustainability, it will go a long way to ensuring lasting changes that will impact on global warming and environmental issues.
On the 11th May I wrote an article on Tiger Brands in my blog.
This week the Finweek magazine’s leading article is ”Into the tiger’s lair – Is Peter Matlare the right man to restore Tiger Brands’ tarnished reputation?”
This is an interesting article with regards to Peter Matlare’s views on managing a crisis and I am quoted as well. The article is a good case study about CEO’s in general.
All in all it makes for interesting and worthwhile reading. Unfortunately you need to be a subscriber to access the article online, but should you wish to, you can do so online at http://www.fin24.com/finweek/FinweekEnglish.aspx
- Did you know that the word stakeholder refers to those individuals or groups that can have a legal, moral or economic stake in your organization?
- Did you know that your organization’s reputation is its greatest asset, but yet it’s Greatest Risk?
- Did you know that Reputation Risk has been shown in more than 5 international surveys to be the biggest and most difficult risk to manage by organizations?
- Did you know that there are three definitions of Reputation Risk, with Stakeholder Reputation Risk one of them?
- Did you know that Stakeholder Reputation Risk refers to the risk that emerges when the reasonable expectations of stakeholders about performance and behavior are not met?
- Did you know that Stakeholder Profiling should be done every time you tackle a new project, assignment or campaign?
- Did you know that there are stakeholder groupings which include categories such as though leaders?
- Did you know that the drivers of corporate reputation can be correlated with stakeholders?
- Did you know that the Universal principles on which Stakeholder Management is based originated from four conferences that were hosted by the Centre for Corporate Social Performance and Ethics in the Faculty of Management [now: the Clarkson Centre for Business Ethics & Board Effectiveness or CC(BE)] between 1993 and 1998?
- Did you know that some studies have shown that Corporate Reputation can influence as much as 55% of a company’s share price?
These are but some of the items that I will expand on at my next Stakeholder Reputation workshop on the 17th June.
How does a 100 year of company destroy its reputation, trust in it as well as its market capitalization?
Simple , really! It allows practices like price fixing and collusion to operate and flourish and become part of the way things are done in the company.
As a keen observer of organizational development (OD) and behavioural practices I am disturbed:
- Where were the OD experts in all of this? The outside consultants who should advise? Surely there must have been rumours, incidents and talk about these types of behaviour?
- Where were the Reputation Managers or was PR just another activity based exercise in the company?
- Where were the Compliance Officers in all of this?
- Where was the Internal Auditors and Risk Managers?
- Where were the internal employees who should be questioning unethical practices and conduct?
Surely there must be processes in any organization to determine smoldering risks. Smoldering risks are those risks that can result in unplanned visibility and reputation damage should it go public (Technically, a smoldering crisis is any serious business problem which is not generally known within or without the organisation, which may generate negative news coverage if or when it goes “public” and could result in fines, penalties or unbudgeted expenses). Surely there must be a process in any organization to act on those small insignificant issues that can potentially cause harm when they come into the open.
The Sunday Independent of today reports that Tiger Brands is continuing a company-wide review to root out anti-competitive behaviour, after a R53 million rand fine for collusive tendering was slapped on its medical supplies firm, Adcock Ingram, on Friday. And this, just after another fine because of price fixing in the bread industry.
Peter Matlare, the Chief Executive of Tiger Brands, promised journalists on Friday that ‘’We are intent on rebuilding our reputation through a culture of compliance and strong ethics, engagement with all of its stakeholders and the adoption of world class business practices’’.
Do I have a message for Mr Matlare!
Dear Mr Matlare, How are you going to do this?
Dear Mr Matlare, The means to do this starts with raising awareness and education and training.
The means to do this have existed for years. It just so happens that I have been addressing these issues the past 12 years, facilitating workshops in more than 8 countries. In the 12 years I have regularly sent notifications to companies like Tiger Brands and interestingly enough to Adcock in particular.
In 12 years only one delegate from Marketing attended one of my workshops. In fact I was told a few years ago by a then Adcock PR person to stop bothering them, they have got things under control. Sure, they did.
Oh, the fallacy of assumptions. As if a few people in a PR department can manage the reputation of a company.
There is clearly a misunderstanding by management teams in South Africa. Managing and protecting a company’s reputation is a multi-dimensional and holistic management function. It cannot be managed linearly by any one department.
In the case of Tiger Brands, their behaviour was the pivot to damage, and that behaviour was influenced by the thinking practices in the organization.
The Thinking practices within an organisation is defined as the mental activity of every member of the organisation….all the idea generation, learning & skill development, exchange of information, development of strategic directions, project planning, communication, market research, problem solving, process improvement and quantum leaps that make up the total intellectual activity of the organisation.
(Source: Transformation Thinking by Joyce Wycoff).
How come all of the above experts did not identify or do anything about these practices? Is it because of our tendencies to only identify tangible asset risk?
It surely is time for organizations to take a closer look at the intangible performance drivers in the business and how they interact with the tangible drivers.
What Mr Matlare is speaking about is called Radical transformation. Not transformation in the BEE sense, but real transformation. The thing is that transformation can occur in any organisation when every member of the organisation becomes an important, participating part of the whole….when every member is taught fundamental but powerful thinking skills and the dynamics of how to think together.
What is going to be necessary at Tiger Brands is a radical a change of direction on all levels within an organisation, a change of not only how they work, but how they think, interact, participate and perform.
Reputation makeover is not a short term process, but they can bounce back, provided they have the impetus to do it.
Dear Mr Matlare, here is a formula that you can apply to the Tiger Brands group.
Change == D+V+S+C
For change to happen a business has to:
- Be dissatisfied with its present state
- Have a clear Vision of where it wants to go
- Take the necessary steps to get there
- Create enough energy (or tension) to overpower the COST required (in terms of money, time and energy) to make the change happen
I hope that you all cherish your Reputation enough to make this change happen. Good Luck!
I am intrigued by how often I read that management express their commitment to Health & Safety Practices in an organization AFTER an accident had taken place.
I think it is time to take a look at why Health & Safety Practices in an organization becomes problematic.Years ago there was a book called Fishes rot from the Head – it had to do with governance practices.
However the title is apt and points to where it starts. Waterfalls flow top to bottom.
It does start at the top. Senior Management are normally exposed to the Occupational Health & Safety Act through a rudimentary overview session. Sometimes this session last only a few hours, because management cannot attend a longer work session since they are always so busy. Fair enough. But how come they can always find the time to pay attention to it after an accident had taken place? Now when it is too late!
Training Managers in Health & Safety is also affected by the traditional view that senior management do not need thorough training. I mean they are highly skilled, often MBA qualified graduates and after all Safety is just common sense.
Is it? What is so common about it?
Perhaps the problem also in the What, Why and When of training. Once-off training is like going to church, once only. After all if you get the message, why go again? No, you go over and over because Repetition is the mother of skill.
Golfers practice their swings over and over, they often go back to basics BUT for senior management it is not necessary after all their job is just to direct. Isn’t it?
In Defence Forces around the world they use a basic principle when training new soldiers. I would like to take just two aspects of this and apply it to the South African situation.
1. Proper Job Instruction – What methods of training are you using in your organization? Competency based training or just awareness sessions? How are you measuring transfer and application of learning? The traditional Sit by Nelly approach is fraught with dangers.
2. Proper Job Indoctrination – This is similar to what the Graduate School of Business at the University of Cape Town call the Immersion principle. For instance you carry your rifle around with you, you sleep with it, go to eat with it for at least a few weeks before you are even given bullets to shoot with at the shooting range. They make sure that you are able to handle your rifle in all types of situations before letting you loose.
In many organizations, PROPER and THOROUGH induction is non- existent. All you get is a vague overview.
I recall that about 15 years ago Xerox released the findings of a study that showed that there can be a loss of up to 98% of learning if there is no follow up, such as refreshers, mentoring and coaching back on the job.
Perhaps I need to share a practical example with you. My job is to advise companies on how to build, sustain and protect their organization’s reputation. Some time ago I was off to a meeting at a client when I walked past a paint spraybooth. In the booth a young man was working with oil veneer paints spraypainting an object. Now these types of paint is dangerous and the young man is supposed to wear a certain category of respiratory mask to protect himself against hazardous chemical exposure, except his mask was sitting on his forehead.
Since I like to use humour to get my points across, I shouted at him saying: ”Hey man, put your mask over your mouth – a women does not wear her bra on her forehead!”. He laughed and shouted back:”It won’t help, the damn thing is blocked’!”
Now, I could not leave it, because it was important to ascertain whether he knew why he was supposed to wear a mask. He did. When I asked him why he had not reported it, he said that he did so on many occasions, but that apparently there were no money in the budget.
So here is a young man, taking his life into his own hands and where are the managers who so succinctly wrote in the annual report – We care for people?
So now I was concerned. So off to management I went.When I asked the line manager to see his PPE register, he went blank.What is that, he asked.
Ok, to cut a long story short – the young man in the spray booth last got a new mask +/- 2 years ago. So where was senior management? Why were they not reinforcing standards, taking action. After all, they are the ones walking past him every day!
AND this was a branch of a listed company, one of the JSE Social Responsible index companies. Sitting on a time bomb. Sitting on a Reputation Risk time bomb.
The company was clearly non-compliant with the Occupational Health & Safety act. It clearly was not consistent – its actions, behaviours and communication was not aligned. For me an outsider it was clear that their values was not being demonstrated.
This may sound like being naive, but on my first visit to any company I can get one hell of an impression of the company just by looking at the state of the bathroom facility. In the Bible it is stated that if God cannot trust you in the small things, how can he trust you in the big things.
It is quite interesting that if you go and do root cause analysis of accidents, that it is often the small things that cause major damage.
Perhaps it is time for organizations to review their public commitment to Health & Safety, to do introspection and to rectify what is wrong. And that process can be started by senior management being willing to submit themselves to retraining and ensuring that they are up to date with the latest thinking in the field.
After all, waterfalls DO FLOW TOP to bottom.
Years ago, ISM (IBM in South Africa) had an advert that said ”If your failure rate is one in a million , what do you tell that one customer?” The same applies to other companies. If your death rate is one in a”million what do you say to that person’s family and loved ones?
I just read a very interesting article in today’s Star newspaper entitled “Keeping polluters in line no easy job, says Green Scorpions boss”
This article spells out an increased potential for reputation risk for organizations. The role of the Green Scorpions, the huge profile of global warming and green issues coupled with increasing stakeholder demands for 3rd party verification of environment and Corporate Social responsibility; will create problems for organizations.
The article also raises questions about an organization’s commitment to environmental impacts. My advice is that organizations need to clean up their act and pay special attention to the lessons this article spells out.
Outgoing director of government’s environmental policy enforcement body, Melissa Fourie is opposed to growth models which do not consider long-term consequences. She points to China as an example that South Africa should avoid. She says “We don’t want to end up like China. But if we don’t check up on industry, we stand to lose things such as our water resources….”
However South African companies have a long way to go. Of the 11 companies that the environmental management inspectorate investigated in the last year, Fourie says that only one came close to compliance standards setup by the inspectorate. “They other 10 were grossly non-compliant,” says Fourie, who leaves the inspectorate this month.
The inspectorate is is just under three years old. It rides on the powers given to it by the National Environmental Act. But even up to 2003, the act made no criminal provision for taking environmental polluters to task. Fourie though believes that the Inspectorate’s legal and technical muscle has started to take shape sufficiently for them to concentrate on the key areas of focus which are pollution and waste, biodiversity, protected areas, marine and coastal management and the monitoring of environmental impact assessment processes.
The inspectorate is currently made up mostly of lawyers and those with a technical and science backgrounds. They also collaborate with the police as well as the National Prosecuting Authority (NPA).
Currently there are just over 860 inspectors, most of them in SAN-parks. The planned deployment of inspectors to municipal structures is expected to bolster on the-ground inspections and initiatives to involve the public in their projects are also on the cards. Fourie, is confident that in the next three to five years the Green Scorpions will be able to “show big results”.
(*** Warning – you will be targeted. ”Getting the public involved” - I believe that the role of citizen reporters will increase. People today have mobile phones with cameras and with blogging technologies, social networking and other technologies, so bad news regarding an organization’s environmental practices can easily spread.)
I fully agree with her sentiment that it’s about getting to a point where companies take on true corporate responsibility; not committing to cleaning up only when they are caught out and forced to comply. An organization that cherishes its reputation will take efforts to adhere not just to minimum legal standards, but to act beyond the norm.
Currently the Scorpions are conducting Operation Ferro, an investigation into the iron, steel and ferroalloy industries. There will also be a focus on the paper and pulping industries. The priority air pollution zones of the Vaal Triangle as well as the Highveld will also get renewed attention. There are also increased efforts to enforce accurate on-site air quality monitoring so that companies are not able to hide behind ambient air quality monitoring, as is currently the case.
Fourie says it’s not only about issuing fines. “What hits companies more than a fine is a directive that forces them to change the way they operate and to change their facilities. It will mean that they are compelled to take the steps that will stop them from being polluters months and years down the line”
I recently addressed this issue in part on one of my Stakeholder Reputation workshops. If an organization derives its reputation from its stakeholders, and stakeholders value environmental issues highly, then it will be business suicide not to adhere to international best practices.
As I told my delegates, there is a definite link between stakeholder relationships, organizational behavior and social responsibility.
Some organizations, display:
- Reactive behavior – They deny responsibility and do less than is required
- Defensive behavior – They admit responsibility and do the least that is required
- Accommodative behavior – They accept responsibility and do only what is required
- Proactive behavior – They anticipate responsibility and do more than is required
What is your organization’s approach to environmental issues? Do you cherish your Reputation? Are you a Market Leader or a Follower?
These questions needs to be addressed if you want to protect your organization’s reputation.
I received this mail last night which should be of interest to all Reputation Managers.
The Research Network for Business Sustainability recently held a dialogue
forum on valuing business sustainability. The speakers and participants – 30
managers, 20 academics, and 15 government and NGO leaders – offered insights
on sustainability valuation from various perspectives.
These insights are summarized in a report available at
- Thirty-five years of research shows that there is a small,
positive relationship between superior corporate social performance and
corporate financial performance; more importantly, there is no financial
- Mainstream investors are starting to incorporate environmental,
social, and governance parameters into their investment decision-making
- Various tools are available to help managers put dollar values to
sustainability activities. For example, financial valuation analyses such as
discounted cash flow, economic value-added, and rules of thumb, can help
translate social activities in dollar values.
- Too often, managers ask ‘how much’ and ‘how far to go’ on
sustainability. This traps them in the old trade-off paradigm. Instead, they
should ask ‘why,’ which will encourage them to understand how sustainability.
- Activities can generate value for the firm and better position the firm to
harvest that value through innovation.
- While most consumers express support of corporate sustainability
initiatives, their behaviour in the marketplace often does not support this
view. Managers can influence customer behaviour more effectively by
adjusting the context in which they sell, rather than promoting a product’s
I quite like the emphasis on the asking of the "Why" question. In business we do tend to tell people what to do and how to do it, but we often forget the importance of selling the true and real benefits of a process.
Sustainable practices do have an outcome. Maybe not direct, but it impacts on corporate reputation. Look at the highlight – investors are starting to incorporate the triple-bottom line into their thinking & decision-making processes.
Quite simple, really! Do you invest in a company that soils the environment, kill people and have other scandals attached to their name? I don’t think so, unless there is a calculated risk and you believe that you can make a difference.
All in all, it makes for interesting reading!
One quote got my attention as well:“A future-oriented perspective of reporting is emerging to project future performance and value creation.” Alan Willis
Corporate Reputation is also based on future projections – I do business with you because of what I have heard about you. I put my trust in you. That is future focused thinking.
An article in this morning’s Star newspaper entitled "Adopt New York Crime Solution" caught my attention.
Justin Foxton, a Durban – based businessman and founder of the Stop Crime Say Hello campaign, is a proponent of the Broken Window Theory developed by US criminologists in the 1980′s.The theory uses the analogy that if a broken window in a building is left unrepaired for an extended period of time, the rest of the windows in the building will, over time, suffer the same fate.
That theory applies to crime, in that it is perpetuated in areas where there is disorder and disrespect.
Feng Shui experts talk about the fact that clutter and broken items destroy energy and the flow of positive chi.
I guess the same applies to companies, where little things are ignored. Where near misses are ignored and small fires not seen as indicative of bigger problems lurking in the wing.
Where issues are seen as trivial.
Are there broken windows in your organization? Do you let the little things slide in your department?
Take a look at your windows! Maybe they need repair or cleaning!