COMPETING IN THE
REPUTATION ECONOMY
Dr. Charles J. Fombrun
Chairman
2nd Latin American Conference on Reputation
28 October...
“Every individual... intends only his own
security; and by directing that industry in
such a manner as its produce may be ...
1.  The New Economics
2.  Who is Succeeding and Why
3. The Reputation Journey
4. Beyond Companies
5. New Rules

© 2013 Rep...
© 2013 Reputation Institute, all rights reserved.

4
Adam Smith’s Economics

The New Economics

•  Atomistic buyers/sellers

•  Powerful actors

•  Perfect Information

•  Asy...
Concentration of
Power with Corporations

The Rise of Enabling
Technologies

Concentration of
Power with Stakeholders

© 2...
In this brave new world,
what you say
doesn’t matter…
It’s a question of
whether you are trusted
& believed…

© 2013 Reput...
Shifting Composition of S&P 500 Market Value
100%

83%

68%

32%

20%
80%

81%

2005

80%

19%

2009

68%

60%
40%

32%

2...
Value of Intangibles
(Billions of USD)
USA	
  
Switzerland	
  
Australia	
  
United Kingdom	
  
France	
  
Canada	
  
Germ...
Source: Bloomberg (as at 17/9/2013), in billions of USD

© 2013 Reputation Institute, all rights reserved.

10
…a new marketplace in which people buy products, take jobs, and make
investments based primarily on their trust, admiratio...
© 2013 Reputation Institute, all rights reserved.

12
Reputation is an
emotional bond…

…that ensures

License to
Operate

Product
Preference

Top Talent
Acquisition

Access

A...
80.0%

% Respondents w ho Would Recommend

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%
30.00

40.00

50.00

60.00
RepT...
Industries
Countries
United	
  Kingdom	
  
USA	
  
Germany	
  
Italy	
  
Australia	
  
France	
  
Norway	
  
Mexico	
  
Br...
Company
Cobham
Deutsche Post
Indesit
Volkswagen
Siemens
Unilever
Virgin Group
Illy Cafe
FedEx
Boeing
Berkshire Hathaway
Ma...
© 2013 Reputation Institute, all rights reserved.

17
© 2013 Reputation Institute, all rights reserved.

18
“Stakeholder interests, risks, and
opportunities are deeply integrated in
every business decision that we take.
Every sing...
“We missed the issue of obesity and
the value of healthy and nutritional
food. We were behind, while Nestlé was
riding tha...
21
22
Business	
  
Ra*onale	
  

Integra*on	
  

Intelligence	
  &	
  
Strategy	
  

Management	
  &	
  
Accountability	
  

© 2...
Business
Rationale
Intelligence &
Strategy
Management
&
Accountability
Activation

50%
Say that they Definitely know the b...
FULL INTEGRATION INTO
LONG-TERM STRATEGY
& INVESTMENTS

© 2013 Reputation Institute, all rights reserved.

25
#1
#2

We are not leveraging the
knowledge we have to be relevant to
each stakeholder (45%)

#3
26

We don’t have a struct...
5%

Comparison with
financial metrics
(Telefonica)
● Reputation and
other Customer
Metrics compared
with a range of
Financ...
28
29
“…everything	
  we	
  do	
  affects	
  our	
  reputa*on,	
  and	
  
our	
  reputa*on	
  affects	
  everything	
  we	
  do	
 ...
© 2013 Reputation Institute, all rights reserved.

31
Increase exports

More tourists

Improved
public diplomacy
Attract FDI

Attract
knowledge & talent

32
Visit

Invest

Live

Work

What canBuy Fromto
you do
mitigate the risk?

33
Latin American Countries

Rank	
  
1	
  
2	
  
3	
  
4	
  
5	
  
6	
  
7	
  
8	
  
9	
  
10	
  

Country	
  
Brazil	
  
Pe...
44,45

29,14

Russia

37,62
33,79

Canada

UK

Germany
44,73

32,18

US

France Italy

Japan

41,69

38,41

37,75

Colombi...
53,25

51,84

Russia

50,64
53,47

Canada

UK
Germany
53,38

45,52

US

France Italy
Japan

48,49

45,03

50,20

Bogota Gl...
Country Reputations

City Reputations

37
8,5

IMPROVE
PERCEPTION

MAINTAIN
PERCEPTION

High importance and Lower
Ratings for Colombia

High importance and
strong r...
Overall Score

Reputation
Score < 50.0

Reputation
Score 50.0 70.0

Reputation
Score 70.0 +

Visit

43,97

29,95

60,18

8...
© 2013 Reputation Institute, all rights reserved.

40
Market Push

Products

Expressive Pull

Monologue

Authority
Messages
Clarity

© 2013 Reputation Institute, all rights res...
© 2013 Reputation Institute, all rights reserved.

42
© 2013 Reputation Institute, all rights reserved.

43
© 2013 Reputation Institute, all rights reserved.

44
© 2013 Reputation Institute, all rights reserved.

45
Gracias!

Argentina-Australia-Belgium-Brazil-Canada-Chile-China-Colombia-Denmark-Finland-France-Germany-Greece-India
Irela...
Upcoming SlideShare
Loading in …5
×

02 charles fombrun-reputation-institute_(eua)

362 views

Published on

Compitiendo en la economía de la Reputación. Presentación de Char

Published in: Marketing
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
362
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

02 charles fombrun-reputation-institute_(eua)

  1. 1. COMPETING IN THE REPUTATION ECONOMY Dr. Charles J. Fombrun Chairman 2nd Latin American Conference on Reputation 28 October 2013, Medellin, Colombia © 2013 Reputation Institute, all rights reserved. 1
  2. 2. “Every individual... intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” - Adam Smith (1776) © 2013 Reputation Institute, all rights reserved. 2
  3. 3. 1.  The New Economics 2.  Who is Succeeding and Why 3. The Reputation Journey 4. Beyond Companies 5. New Rules © 2013 Reputation Institute, all rights reserved. 3
  4. 4. © 2013 Reputation Institute, all rights reserved. 4
  5. 5. Adam Smith’s Economics The New Economics •  Atomistic buyers/sellers •  Powerful actors •  Perfect Information •  Asymmetric Information •  Moral Behavior •  Opportunistic Behavior •  Tangible Assets •  Intangible Assets •  Investment Capital •  Support Capital •  Coordinated by the Invisible Hand of the Market •  Coordinated by the Visible Hands of Stakeholders © 2013 Reputation Institute, all rights reserved. 5
  6. 6. Concentration of Power with Corporations The Rise of Enabling Technologies Concentration of Power with Stakeholders © 2013 Reputation Institute, all rights reserved. 6
  7. 7. In this brave new world, what you say doesn’t matter… It’s a question of whether you are trusted & believed… © 2013 Reputation Institute, all rights reserved. 7
  8. 8. Shifting Composition of S&P 500 Market Value 100% 83% 68% 32% 20% 80% 81% 2005 80% 19% 2009 68% 60% 40% 32% 20% 17% 0% 1975 1985 1995 Intangible Assets Tangible Assets Source: Ocean Tomo © 2013 Reputation Institute, all rights reserved. 8
  9. 9. Value of Intangibles (Billions of USD) USA   Switzerland   Australia   United Kingdom   France   Canada   Germany   Netherlands   India   Brazil   Hong Kong   China   Italy   South Korea   Japan   Total Global   $11,916   $978   $875   $2,050   $1,273   $1,012   $1,032   $466   $626   $648   $520   $1,169   $280   $221   $266   $28,305   % of Enterprise Value 68%   61%   58%   58%   54%   53%   52%   49%   48%   44%   42%   35%   28%   16%   6%   50%   Source: Brand Finance GIFT 2013 © 2013 Reputation Institute, all rights reserved. 9
  10. 10. Source: Bloomberg (as at 17/9/2013), in billions of USD © 2013 Reputation Institute, all rights reserved. 10
  11. 11. …a new marketplace in which people buy products, take jobs, and make investments based primarily on their trust, admiration and appreciation for the companies and institutions that stand behind them. 11 © 2013 Reputation Institute, all rights reserved.
  12. 12. © 2013 Reputation Institute, all rights reserved. 12
  13. 13. Reputation is an emotional bond… …that ensures License to Operate Product Preference Top Talent Acquisition Access Advocacy
  14. 14. 80.0% % Respondents w ho Would Recommend 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 30.00 40.00 50.00 60.00 RepTrak™ Pulse Score 70.00 80.00 Adj-R2 = 0.827
  15. 15. Industries Countries United  Kingdom   USA   Germany   Italy   Australia   France   Norway   Mexico   Brazil   Sweden   South  Africa   Switzerland   Ireland   Denmark   Canada   Portugal   Spain   Total   379   261   52   69   58   36   41   36   118   33   19   37   50   36   53   32   52   1362   228.3   151.3   84.1   74.9   60.7   59.4   43.6   39.9   12.7   -­‐5.1   -­‐15.8   -­‐45.6   -­‐46.3   -­‐53.4   -­‐105.9   -­‐144.4   -­‐225.9   112.6   Transport  &  Logis.cs   Financial  -­‐  Insurance   Airlines  &  Aerospace   Services   Financial  -­‐  Diversified   Energy   Consumer  Products   Telecommunica.ons   Chemicals   Tobacco   Automo.ve   Food  -­‐  Manufacturing   Construc.on  &  Engineering   Computer   U.li.es   Raw  Materials   Industrial  Products   Electrical  &  Electronics   Informa.on  &  Media   Conglomerate   Pharmaceu.cals   Retail  -­‐  Food   Beverage   Retail  -­‐  General   Financial  -­‐  Bank   Total   58   105   50   112   45   73   39   68   17   4   25   63   56   19   63   52   42   15   56   19   33   56   26   148   118   1362   62.9   51.0   47.7   47.4   41.3   37.5   26.6   26.1   22.8   18.5   17.0   15.4   13.1   10.6   10.0   8.8   6.6   3.5   2.4   -­‐15.1   -­‐15.9   -­‐17.7   -­‐18.4   -­‐46.1   -­‐243.3   112.6   © 2013 Reputation Institute, all rights reserved. 15
  16. 16. Company Cobham Deutsche Post Indesit Volkswagen Siemens Unilever Virgin Group Illy Cafe FedEx Boeing Berkshire Hathaway Mayo Clinic Lloyd's of London Statoil Ryanair BP Vestas HMV H&M La Caixa Danske Bank Country RepTrak® Pulse 2013 Change  in   RepTrak®  Pulse   (2007-­‐2013)   United Kingdom Germany Italy Germany Germany United Kingdom United Kingdom Italy USA USA USA USA United Kingdom Norway Ireland United Kingdom Denmark United Kingdom Sweden Spain Denmark 80.6 71.7 78.5 83.9 79.1 71.2 74.7 79.4 76.4 69.9 70.1 80.8 66.2 73.5 39.0 52.4 65.0 56.2 56.4 42.4 35.8 12.3   9.2   8.3   7.5   7.5   0.7   1.0   0.3   0.2   0.1   0.0   0.0   0.1   -­‐0.6   -­‐4.1   -­‐4.1   -­‐10.8   -­‐10.9   -­‐11.8   -­‐15.8   -­‐17.8   © 2013 Reputation Institute, all rights reserved. 16
  17. 17. © 2013 Reputation Institute, all rights reserved. 17
  18. 18. © 2013 Reputation Institute, all rights reserved. 18
  19. 19. “Stakeholder interests, risks, and opportunities are deeply integrated in every business decision that we take. Every single project or investment decision comes with reflections, risk maps, and mitigation actions around the particular topic that we’re discussing.” - Helge Lund, CEO 19
  20. 20. “We missed the issue of obesity and the value of healthy and nutritional food. We were behind, while Nestlé was riding that wave. Not being in tune with society, with the benefit of hindsight, can cost you dearly.” - Paul Polman, CEO 20
  21. 21. 21
  22. 22. 22
  23. 23. Business   Ra*onale   Integra*on   Intelligence  &   Strategy   Management  &   Accountability   © 2013 Reputation Institute, all rights reserved. 23
  24. 24. Business Rationale Intelligence & Strategy Management & Accountability Activation 50% Say that they Definitely know the business rationale for reputation management, which stakeholders influence the business, what specific business outcome they want from each, and how their company vision is relevant to them. 32% Say that they Definitely have ongoing perception tracking with key stakeholders and they understand what stakeholders expect from them and have translated that into a strong corporate narrative that is used to tell the enterprise story and be relevant to key stakeholders 26% Say that they Definitely are making the reputation strategy come to life for teams and functions through tools and training so that each one can use the intelligence to develop their stakeholder action plans. 38% Say that they Definitely are activating their corporate narrative across all these touch points and they are enabling stakeholders to participate in the story telling. Source: Reputation Institute, Reputation Leaders Study, 2013 24
  25. 25. FULL INTEGRATION INTO LONG-TERM STRATEGY & INVESTMENTS © 2013 Reputation Institute, all rights reserved. 25
  26. 26. #1 #2 We are not leveraging the knowledge we have to be relevant to each stakeholder (45%) #3 26 We don’t have a structured process for implementing reputation management into our business planning (57%) Internal silos prevent crossfunctional collaboration (34%)
  27. 27. 5% Comparison with financial metrics (Telefonica) ● Reputation and other Customer Metrics compared with a range of Financial Indicators 4% ● Reputation of Telefonica + Primary Competitor was found to be responsible for 17% of ARPU, 29% of churn and 11% of Financial Metrics Average globally 27
  28. 28. 28
  29. 29. 29
  30. 30. “…everything  we  do  affects  our  reputa*on,  and   our  reputa*on  affects  everything  we  do  –  this  is   why  we  need  to  manage  and    protect  it.”     -­‐  Dennis  Jönsson,  President  and  CEO,  Tetra  Pak  Group   30
  31. 31. © 2013 Reputation Institute, all rights reserved. 31
  32. 32. Increase exports More tourists Improved public diplomacy Attract FDI Attract knowledge & talent 32
  33. 33. Visit Invest Live Work What canBuy Fromto you do mitigate the risk? 33
  34. 34. Latin American Countries Rank   1   2   3   4   5   6   7   8   9   10   Country   Brazil   Peru   Puerto  Rico   Chile   Argen*na   Mexico   Hai*   Venezuela   Bolivia   Colombia   Country  RepTrak®   Pulse  2013   57.81   54.86   47.41   51.01   50.17   47.02   45.84   45.50   43.73   37.75   Latin American Cities Rank   1   2   3   4   5   6   7   8   9   10   11   12   13   City  RepTrak®  Pulse   2013   City   Montevideo   61.77   Cancun   59.40   San*ago   58.65   Rio  de  Janeiro   57.55   Buenos  Aires   57.52   Lima   56.63   San  Juan   56.36   Sao  Paulo   55.77   Santo  Domingo   54.05   Port-­‐au-­‐Prince   53.3   Bogota   50.20   Caracas   48.97   Mexico  City   47.17   34
  35. 35. 44,45 29,14 Russia 37,62 33,79 Canada UK Germany 44,73 32,18 US France Italy Japan 41,69 38,41 37,75 Colombia Global (G8) Score Above 80 70-79 60-69 40-59 Below 40 Excellent/Top tier Strong/Robust Average/Moderate Weak/Vulnerable Poor/Low est tier n= 639 35
  36. 36. 53,25 51,84 Russia 50,64 53,47 Canada UK Germany 53,38 45,52 US France Italy Japan 48,49 45,03 50,20 Bogota Global (G8) Score Above 80 70-79 60-69 40-59 Below 40 Excellent/Top tier Strong/Robust Average/Moderate Weak/Vulnerable Poor/Low est tier All G8 City RepTrak® scores are directional due to low counts. n= 203 36
  37. 37. Country Reputations City Reputations 37
  38. 38. 8,5 IMPROVE PERCEPTION MAINTAIN PERCEPTION High importance and Lower Ratings for Colombia High importance and strong ratings for Friendly & Welcoming Colombia Safe Environment 7,5 Lifestyle Enjoyable Effective Government Global (G8) Attribute Importance Contribution to Global Community Policies Operational Efficiency 6,5 Physical Beauty Quality Products & Services Business Environment Culture 5,5 Workforce Brands and Innovation 4,5 Education Technology OPPORTUNITY ATTRIBUTES LESS IMPORTANT ATTRIBUTES 3,5 29,0 Strong ratings of Colombia but of less importance Less importance and lower ratings for Colombia 31,0 33,0 35,0 37,0 39,0 41,0 43,0 45,0 47,0 49,0 51,0 53,0 55,0 57,0 59,0 61,0 63,0 65,0 Global (G8) Attribute Score n = 639 38
  39. 39. Overall Score Reputation Score < 50.0 Reputation Score 50.0 70.0 Reputation Score 70.0 + Visit 43,97 29,95 60,18 82,79 Invest 32,20 17,19 48,26 75,16 Live 30,79 15,86 47,17 75,19 Work 30,10 15,32 47,65 74,32 Buy 39,83 24,85 55,18 81,31 . Study 32,03 16,42 49,50 76,93 . 39
  40. 40. © 2013 Reputation Institute, all rights reserved. 40
  41. 41. Market Push Products Expressive Pull Monologue Authority Messages Clarity © 2013 Reputation Institute, all rights reserved. 41
  42. 42. © 2013 Reputation Institute, all rights reserved. 42
  43. 43. © 2013 Reputation Institute, all rights reserved. 43
  44. 44. © 2013 Reputation Institute, all rights reserved. 44
  45. 45. © 2013 Reputation Institute, all rights reserved. 45
  46. 46. Gracias! Argentina-Australia-Belgium-Brazil-Canada-Chile-China-Colombia-Denmark-Finland-France-Germany-Greece-India Ireland-Italy-Japan-Mexico-Netherlands-Norway-Panama-Peru-Portugal-Puerto Rico-Russia-South Africa-Spain-Sweden Switzerland-Turkey-Ukraine-United Arab Emirates-United Kingdom-United States © 2013 Reputation Institute, all rights reserved. 46

×