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Corporate Reputation in the Nordics: Leading with Purpose

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Burson-Marsteller commissioned research firm Penn, Schoen & Berland to survey more than 4,500 people in Denmark, Finland, Norway and Sweden. The Nordic Corporate Reputation Study identifies the key drivers of corporate reputation in the Nordics and ranks the top 100 Nordic companies across a range of metrics from trust and responsible behavior to innovation, leadership and financial performance. For comparison and benchmarking purposes, a number of leading international companies were included in the research. The resulting Purpose & Performance Index shows that customer service, treating employees well and engaging with local communities are all key drivers of trust and help turn Nordic customers into brand advocates.

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Corporate Reputation in the Nordics: Leading with Purpose

  1. 1. Ikea, Google and Microsoft Top In- Cteorrnpaotriaotnea Rle Bpruatnatdios n in the Nordics Leading With Purpose www.bmnordic.com
  2. 2. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 2 With a total population of around 25 million, the Nordic market constitutes the eleventh largest economy in the world. It is renowned for big, established brands such as Lego, Nokia and Volvo and - thanks to high levels of internet penetration and entrepreneurial activity - has also recently spawned a new generation of tech companies such as Skype and Spotify. The region is a stronghold of the oil and gas industries as well as clean tech-nologies and renewable energy. In a period of prolonged economic uncertainty, where trust in corporations is generally low and consumers are looking for reassurance that cor­porations are playing their part as responsible citizens, we set out to discover what drives corporate reputation in the Nordics. We asked over 4500 people from Denmark, Finland, Norway and Sweden what is important to them in their roles as consumers, employees, investors and not least citizens. We also asked them to rate the top 100 Nordic companies across a range of metrics from trust and responsible behaviour, to innova-tion, leadership and financial performance. For comparison and benchmarking purposes, a num-ber of international and additional Nordic compa-nies from key sectors were included in the research. The link between economic challenges and corpo-rate responsibility is clear. There is a perception that companies do not pay their fair share of taxation and the demand for companies to give back to society in other ways is high across all countries. Our findings confirm that having a clearly defined Corporate Purpose helps to build trust and a com-petitive advantage among Nordic stakeholders. Good customer service, treating employees well and engaging with local communities are all key drivers of trust and what turns customers into brand advocates. Research shows that a strong and well communicated Corporate Purpose can also impact financial performance up to 17%[1]. We hope that this Nordic market insight will help companies understand what drives corporate reputation in the Nordics and how to balance Purpose and Performance in their communications. Introduction [1] IMD’s regression analysis on industry standardised return on investments over two five-year periods (2205-2009 and 2007-2011). PURPOSE Trust Advocacy Responsible Behaviour Public Image Good Employer Environmental Responsibility Positive Contribution to Community PERFORMANCE Products and Services Financially Strong Innovation Strong Leadership Communicates in a relevant way
  3. 3. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 3 Part 1 Corporate Rankings
  4. 4. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 4 Purpose & Performance Index – TOP 10 Nordic Companies Top 10 Nordic COMPAEINS PURPOSE PERFORMANCE Taotl Sceor Tine 2.01 1.58 1.80 1.50 1.27 1.38 Norsk Tipping 1.54 1.89 1.72 Lego System 1.52 1.24 1.38 Valio 1.47 1.81 1.64 Novo Nordisk Arla 1.16 1.43 1.30 1.47 1.56 1.52 Carlsberg 1.31 1.28 1.30 KONE 1.60 1.28 1.44 SOK/S-ryhmä 1.24 1.28 1.26 Volvo PURPOSE Trust Advocacy Responsible Behaviour Public Image Good Employer Environmental Responsibility Positive Contribution to Community PERFORMANCE Products and Services Financially Strong Innovation Strong Leadership Communicates in a relevant way When asked to rank the top 100 Nordic companies on a range of metrics from trust and responsible behaviour to leadership and financial performance, Norwegian dairy producer Tine came out top overall, scoring particularly well on Purpose metrics. Danish toy company Lego was rated top on Performance. Only one Swedish company, Volvo, made it into the top 10 list. Danish companies score highly on both Performance and Purpose, with a tendency to rate better on Performance. Finnish and Swedish companies tend to do slightly better on Purpose metrics than Performance. Norwegian companies do very slightly better on Performance ratings than Purpose.
  5. 5. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 5 Purpose & Performance Index – Across all Sectors Consumer facing sectors such as manufacturing, technology, food and drink, and retail score best by far on the Nordic Purpose & Performance Index. Among the international companies included in the research for benchmarking purposes, the technology sector also tops the ranking. It is worth noting that the manufacturing and tech-nology sectors score particularly well on Performance metrics, whereas retail and food and drink companies are seen to have a stronger Corporate Purpose. As a sector, ‘business services’ is ranked lowest on the Nordic Purpose & Performance Index. Energy, construction, finance and telecoms are also sectors that do less well. The biggest discrepancy between Purpose and Performance is for the telecom sector which is rated particularly poorly on Corporate Purpose. Nordic telecom companies score low on trust, public image, responsible behaviour and their consumers are not prepared to act as advocates. ALL SECTORS -0.17-0.19 -0.22 -0.19 Shipping/ Logistics Paper/ Oil and gas Forestry Manu­facturing Technology -0.29-0.31 Food and drink Retail Telecoms Financial PURPOSE PERFORMANCE Total Score -0.42 Con­struction -0.45 Energy -0.77 Business Services 0.07 -0.05 -0.17 -0.07 -0.31 0.41 0.34 0.38 0.35 0.38 0.37 0.33 0.29 0.31 0.27 0.11 0.19 -0.5 -0.11 -0.31 -0.34 -0.36 -0.48 -0.57 -0.51 -0.7 -0.83 TOP SECTORS* BOTTOM SECTORS* *Nordic companies only
  6. 6. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 6 INTERNATIONAL COMPANIES SCORE BETTER ON PERFORMANCE When benchmarking against the international com­panies included in the research it becomes apparent that, whereas Nordic companies are generally seen as strong on Purpose driven metrics such as trust, non-Nordic brands score best on Performance related metrics like innovation and financial strength. Ikea tops the list, being perceived across the Nordics as financially strong, innovative and a company that communicates well with its customers. Although not headquartered in the region, Ikea is still perceived as Swedish and is popular in all four Nordic countries. Swedish stakeholders still describe Ikea as a “leading Swedish company”. Technology companies generally score highly on the Purpose & Performance Index because they are seen as financially robust and as having a well-developed products and services offering. They are also perceived as having a strong public image but being weak on environmental responsibility and not viewed as “caring about the environment”. “Companies need to think more than just about maximizing profits. They need to pay taxes in the coun­try they’re working in, not hiding it away.” “ I want to know that the company remains active in the community, using the profits to reinvest. This is an easy way to contribute to where they are active.” sweden FINLAND
  7. 7. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 7 Part 2 Corporate purpose and leadership
  8. 8. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 8 Corporate purpose drives trust Good customer service, treating employees well and engaging with local communities are all key drivers of trust. Not surprisingly, the most trusted companies within each market tend to be domestic. This is also true when comparing Nordic and inter-national companies where we see Nordic companies outperforming international ones thanks to higher Purpose scores. TOP 5 MOST TRUSTED COMPANIES BY MARKET 1 2 3 4 5 Denmark Lego Carlsberg Coop Novo Nordisk Mærsk Finland Fazer Kone OP-Pohjola Valio SOK/S-ryhmä Norway Tine Norsk Tipping Coop Gjensidige Forsikring Posten Norge Sweden ICA SKF Arla Scania Volvo “The company must operate openly and honestly in accordance to its values. It should treat its employees well and be honest with its customers.” “Trusting means that the company is open and honest about its finances, and also has a reputation as a good employer” Norway FINLAND MOST TRUSTED NORDIC COMPANIES 1. Tine 2. Carlsberg 3. Norsk Tipping 4. OP-Pohjola 5. Lego
  9. 9. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 9 Purpose Three Times More Important Than Financial Performance Two thirds of Nordic stakeholders believe that the CEO should be the public face of a company and that CEOs need to have a strong profile both internally and externally. Among those that feel that CEOs should have a strong profile, Corporate Purpose and vision were identified as the issues CEOs should be most concerned about both inside and outside of their organisation. In fact, communicating a company’s Purpose and core values are deemed to be more than three times as important as communicating a company’s financial performance. Danish companies are seen as having particularly strong leadership among Nordic stakeholders. Companies with strong leadership 1. Maersk 2. Novo Nordisk 3. Lego 4. Reitangruppen 5. Statoil Which of the following is closer to your view? CEOs do not need to be well known outside of their own company 62 % CEOs should be the public face of a company: they need to have a strong profile internally and externally 38 % “Good leaders should not only think in terms of profit, but should position the company to be part of the community, and act to the society’s benefit.” Norway “Company leaders must be responsive – inform the employees and then the media. They should be unafraid to apologise when there are errors and not let subordinates take the hit for them.” Sw eden
  10. 10. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 10 Sustainability is more than just the environment The environment is an important issue for the Nordic public and nearly 80% of stakeholders across the region say that they are concerned about the environmental impact of companies. But they also agree that, for a company, sustainability is more than just being environmentally friendly. Good working conditions, contributing to the local community, less focus on quarterly earnings and more of a long-term view on financial performance are all definitions of sustainability. Top 5 companies by topic 1 2 3 4 5 Vestas Coop Tine Valio SOK/S-ryhmä Tine Norsk Tipping Coop Posten Norge SOK/S-ryhmä Coop Tine Novo Nordisk Norsk Tipping Lego Seen to care about the environment Making a positive contribution to the communities where they operate Behaving in a responsible manner “A company should make sure that it does not harm the environment in the short and long term. Environmental considerations in particular should be taken into account for the life cycle of products.” Sw eden
  11. 11. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 11 Part 3 Consumer insight
  12. 12. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 12 Clear link between economic challenges and corporate responsibility Our research shows that Danes and Norwegians are more positive about the state of their nation than Swedes and Finns. Over half of Danes think their country is heading in the right direction compared with just one fifth of Finns. Danes and Norwegians are also more positive about the economy while only 13% of Finns feel their economy is going in the right direction. The link between economic challenges and corpo-rate responsibility is clear. In Finland particularly there is a perception that companies do not pay their fair share of taxes. Across the Nordics, there is a demand for com­panies to give back to society. Two thirds feel that companies have a responsibility to contribute to local communities and overall this is one of the metrics that the companies included in this survey performed worst on. Contributing to the community can, however, take many forms. Respecting the local environment, creating new jobs, paying taxes and contributing to charities are all important. Top 5 companies that ‘make a positive contribution’ by market 1 2 3 4 5 Denmark Lego Coop Carlsberg Mærsk Nortura Finland Fazer Valio SOK/S-ryhmä KONE OP-Pohjola Norway Tine Norsk Tipping Posten Norge Statoil Coop Sweden ICA Arla SCA Volvo SKF/Scania/Ericsson/Skanska Top Nordic Employers 1. SOK/S-ryhmä 2. KONE 3. Novo Nordisk/Valio 4. Tine/Lego 5. Carlsberg
  13. 13. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 13 The nordic Consumer 40 % Somewhat important 30 % Not very important 15 % Not at all important 14 % Very important Can you think of any companies that are particularly good at utilising social media? How important do you think it is for a company to have a strong presence on social media? Overall Nordics A company’s values are important for the Nordic consumer who is willing to pay a premium price for a product or service from a company they view as responsible. A quarter of Nordic consumers say they have advised someone to use or buy products from a company because it has acted responsibly. 41% of Nordic consumers would like companies to engage with them on the issues they want to hear more about: mainly the companies’ commitment to social responsibility and the wider impact they have on society and the economy. Social media is an effec-tive tool for customer engagement and Ica, Telenor and Ikea are companies that are seen as particularly good at utilising social media for engagement. “Engaging with me is how I become familiar with a company and its values and practices – and makes me more likely to be loyal to them.” Norway
  14. 14. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 14 FIVE Tips for Effective Communication in the Nordics 1. Define And Communicate Your Corporate Purpose Corporate Purpose has evolved from Corporate Social Responsibility (CSR) and sustainability and is today a distinct concept in itself. Whereas CSR is often seen as a bolt-on to a company’s core business, Purpose cuts across all business func-tions. Part of a company’s DNA and its raison d’être, Purpose guides and informs the basis of the mission, vision and values of a company. 2. Walk The Talk Corporate Purpose is key for both internal and external communication, however the Purpose comes first, it is not a communications tool. Pur-pose is central to strategy development and guides business decisions, allowing companies to take a holistic view and strategically align values, organisational culture and operations. This helps to avoid any disconnect between what companies say they do and how they actually operate. It also helps avoid accusations of “greenwashing”. 3. Maximise CEO Profile Internally and Externally There is a growing demand from consumers, employees, investors and other stakeholders for CEOs to be the public face of a company and to have a strong profile both internally and externally. A company’s Purpose and values are seen as the key issues a CEO should be most concerned with communicating both inside and outside the organization. 4. “Localise” Communication The 25 million people that make up the Nordic market are culturally and linguistically close to one another. The Nordic public also shares core values and beliefs around the role of companies in today’s society. However, as our research shows, the most trusted companies within each market tend to be domestic: communicating in local language, engaging with local communities, treating employ-ees well and having good customer service. 5. Use Social Media For Customer Engagement Nordic stakeholders want companies to engage with them, but not just for advertising and promo-tional purposes. Social media is an excellent tool for engagement if used correctly. As a first step, ensure that your own social media channels are used for discussions and dialogue rather than promotion. As a next step, participate in all the other discussions taking place on the web around your products and brands. “Performance with a Purpose is based on the belief that companies can – and must achieve business and financial success while also leaving a lasting and positive imprint on society” Indra Nooyi, C hairman, Pe psiCo
  15. 15. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 15 Methodology Burson-Marsteller commissioned leading research firm Penn Schoen and Berland to under-take an online quantitative survey of 4531 people in the Nordic region between July and September 2014. Quotas were set for gender, age and region to ensure that the sample is representative of each population. To find out more about your company’s Purpose & Performance ranking, please contact: Sara Alsén Managing Director, Strategy Nordic Region sara.alsen@bm.com +46 (0)761107057 The following companies are included in the research
  16. 16. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 16 Burson-Marsteller, established in 1953, is a leading global public relations and communications agency with unrivalled presence and expertise in the Nordic region. Our teams of experienced consultants in Copenhagen, Helsinki, Oslo and Stockholm work closely together on a day-to-day basis to provide clients with strategic insight and innovative public relations, public affairs, reputation and crisis manage-ment, digital strategy, advertising and other commu-nications services. Having wholly-owned offices in all Nordic countries, not only sets Burson-Marsteller apart from the competition but ensures that we can deliver seamless communications services across the region. Worldwide, Burson-Marsteller operates in 110 countries across six continents. www.bmnordic.com Penn Schoen Berland (PSB), a member of­Young & Rubicam Group and the WPP Group, is a global research-based consultancy that specialises in messaging and communications strategy for blue-chip political, corporate and enter-tainment clients. PSB’s operations include over 200 consultants and a sophisticated in-house market research infrastructure with the capability to conduct work in over 90 countries. The company operates offices in Washington, D.C., New York, London, Seattle, Los Angeles, Dubai, Delhi, Miami, The Dominican Republic and Denver, which are supported by an in-house fielding capability and are fully equipped to provide the complete creative solutions PSB clients need. www.psbresearch.com
  17. 17. Corporate Reputation in the Nordics – Leading With Purpose / Burson-marsteller 17 Burson-Marsteller Denmark Kronprinsessegade 54 1306 København K Tel: +45 3332 7878 Mail: info.dk@bm.com Foto: Shutterstock Burson-Marsteller Norway Kirkegata 17 0153 Oslo Tel: +47 23 16 45 00 Mail: oslo@bm.com Burson-Marsteller Sweden Mäster Samuelsgatan 56 111 21 Stockholm Tel: +46 8 440 1200 Mail: stockholm@bm.com Burson-Marsteller Finland Kalevankatu 20, PL 1062 00101 Helsinki Tel: +358 10 424 5900 Mail: info-pbm@bm.com

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