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Corporate reputation and risk management

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Presentation by David Geddes, evolve24, at Smart Content: The Content Analytics Conference, October 19, 2010, http://smartcontentconference.com

Published in: Business, Economy & Finance
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Corporate reputation and risk management

  1. 1. ©evolve24, 2010 Corporate reputation and risk management David Geddes, Ph.D. Vice President, Research & Development evolve24, a Maritz Research Company Saint Louis, Missouri New York, New York October 19, 2010
  2. 2. ©evolve24, 2010 2 About evolve24 • Global market intelligence through integrated analysis of traditional and social media • Integrated enterprise platform – Real-time document aggregation – Smart Content through advanced processing and analytics – Deep understanding of audience segments – Leading indicators of market shifts, risks and opportunities
  3. 3. ©evolve24, 2010 3 Approach 1. Document aggregation 2. Data processing 3. Analytics and rich tagging – Sentiment – Reputation – Risk – Topics and issues 4. Insights 5. Strategy and tactics
  4. 4. ©evolve24, 2010 4 Visualization of SmartContent
  5. 5. ©evolve24, 2010 5 What is corporate reputation? • Collective representation • Past behaviors • Expectations • Relationships • Networked world Sources: Duncan J. Watts & Peter S. Dodds (2007). Influentials, networks, and public opinion formation. Journal of Consumer Research, 34 and Communications Executive Council (2010). Influencing stakeholders in a networked environment.
  6. 6. ©evolve24, 2010 6 Where does reputation come from? What they do Reputation Customer experience What they say What is said about them Actions Words
  7. 7. ©evolve24, 2010 7 Where does reputation come from? Corporate actions Mainstream media Stakeholder impact Customer experience Media Mainstream media Social / WOM Social / WOM Exchange Relationships • Stakeholders • Publics Reputation • Cognitive & substantive • Affective & evaluative Social / WOM Mainstream media Customer impact Business outcomes
  8. 8. ©evolve24, 2010 8 Why does reputation matter? Resource Capital asset Sustainable competitive advantage Intangible Organizational goals
  9. 9. ©evolve24, 2010 9 What links Smart Content and reputation? • Agenda-setting theory – Scientifically-validated – > 400 research studies – Experimental studies – Corporate reputation
  10. 10. ©evolve24, 2010 10 What is risk? • State of uncertainty • Some of the possibilities involve a loss, catastrophe, or other undesirable outcome • Psychometric emotional risk model
  11. 11. ©evolve24, 2010 11 How do we manage using Smart Content?
  12. 12. ©evolve24, 2010 REPUTATION MANAGEMENT AND MUTUAL FUND CASH FLOWS Smart Content Case Study
  13. 13. ©evolve24, 2010 13 Situation • Leading mutual fund company • Cash flows ▲Industry peers ▼Client company • Management assumptions • Investment drivers
  14. 14. ©evolve24, 2010 14 Approach • Regression analysis of cash flows on financial variables and reputation Figure 1: Cumulative Funds Flows and xxxxx Reputation Equity (50,000) (40,000) (30,000) (20,000) (10,000) - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 fundsflows($millions) (7,000) (6,000) (5,000) (4,000) (3,000) (2,000) (1,000) - 1,000 2,000 3,000 ReputationEquity Cumulative Funds Flows (xxxxx) Cumulative Funds Flows / 10 (industry) Reputation Equity (xxxxx) Fund reputation Fund $ inflows Sector $ inflows
  15. 15. ©evolve24, 2010 15 Result • Primary drivers are financial • Significant role for reputation (R = .74)
  16. 16. ©evolve24, 2010 16 Application • Communications and outreach program – Trust – Performance • Largest gain in net flows in company history
  17. 17. ©evolve24, 2010 REPUTATION MANAGEMENT IN PHARMACEUTICALS Smart Content Case Study
  18. 18. ©evolve24, 2010 18 Situation • PharmCo, a major pharma company • FDA-ordered recall • Branded nutritional product
  19. 19. ©evolve24, 2010 19 Challenge • Listen • Organize and share • Understand stakeholder opinions – Cognitive – Emotions and risk factors – Messages • Identify • Engage • Fix
  20. 20. ©evolve24, 2010 20 Who was in the discussion? Visibility Sentiment Doctors Retailers Consumer groups Health orgs. Regulators JournalistsParents
  21. 21. ©evolve24, 2010 21 What were stakeholders saying? Stakeholder Key concerns Health organizations • Share information Medical professionals • Reassure parents Consumer groups •Open information access Parents • Loss of trust • Safety concerns • Quality • Price
  22. 22. ©evolve24, 2010 22 What were the emotional risk factors? Tuesday Wednesday Thursday Friday Saturday Sunday Emotional risk in product recall discussions Top 5 of 19 risk factors Vulnera- bility Dread Irreversa- bility Lack of control Untrust- worthy
  23. 23. ©evolve24, 2010 23 What were social moms saying? • Small reputation impact • Emotion drivers –Uncertainty –Irreversibility –Vulnerability
  24. 24. ©evolve24, 2010 RISK MANAGEMENT AND ALTERNATIVE ENERGY Smart Content Case Study
  25. 25. ©evolve24, 2010 25 Situation • Global manufacturer • European Union 20/20 alternative energy initiative • Corporate strategy and policy teams • European fiscal crisis • Political winds • Where to invest?
  26. 26. ©evolve24, 2010 26 Challenge • Monitor • Organize information • Gauge opinion • Weak signals • Threats • Anticipate • Reach out
  27. 27. ©evolve24, 2010 27 Political risk analysis by energy source Risk score Volume Events Weekly risk
  28. 28. ©evolve24, 2010 28 Political risk analysis: Wind by country Risk score Volume
  29. 29. ©evolve24, 2010 29 Political risk analysis: Topics and issues Risk score Risk contribution by topic Offshore wind Wind & economy Energy & jobs Wind opposition Wind & jobs
  30. 30. ©evolve24, 2010 30 Influencers Companies & organizations People Influence
  31. 31. ©evolve24, 2010 31 Political risk analysis: Wind summary • Increased discourse ▲Wind ▲Renewables • Wind ▼More negativity • Energy and financial crisis ▲France, Spain ▼UK, Ireland, Greece, Bulgaria • Offshore vs. onshore ▲Debate ●Polarization
  32. 32. ©evolve24, 2010 SUMMARY
  33. 33. ©evolve24, 2010 QUESTIONS? Thank you

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