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The Future of
Reputation
VOLUME 3, ISSUE 1
People’s Insights – the voice of SPRINT
People’s Insights is a collection of inspiring initiatives, insights and foresights shared by MSLGROUP’s
SPRINTers – our global team of 85+ strategic planners, researchers and insights experts.
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The Evolving Role of the Board in Reputation Management
Brad Wilks, MD, Midwest, North America, MSLGROUP
France: Social Performance Comes First
Fabrice Fries, President, France, MSLGROUP
China: Facing the Challenges of a Low-Trust Society
Par Uhlin, MD, MSLGROUP in Hong Kong and Vice Chair, 
MSLGROUP China
India: The Awakening
Jaideep Shergill, CEO, India, MSLGROUP
Poland: Invaluable Reputation - Protects, Motivates, Sells!
Katarzyna Stamatel, Head of Law  Consulting, Poland, MSLGROUP
Reputation Journey: The Now  The Next
Reputation Management: From Risk
Mitigation To Competitive Advantage
Perspectives: Reputation Around The Globe
The Reputation Complex: Seeking Sustainability 
in a Liquid World
Pascal Beucler, SVP  Chief Strategy Officer, MSLGROUP
Reputation and Corporate Image Today
Paulo Andreoli, Chairman, Latin America, MSLGROUP
Your Corporate  Brand Reputation is Now in the
Hands of Millennials
Scott Beaudoin, Global Practice Director, Corporate  Brand 
Citizenship, MSLGROUP
The Future of Reputation is about Building from
the Inside Out
Jason Frank and Brian Burgess, Global Co-leaders,
Employee Practice, MSLGROUP
Reputation Building by Influencer Collaboration
Martin Dohmen, Germany Director, Corporate  Brand Citizenship/
PurPle, and Chief Strategy Officer, MSL Germany
The Reputation Journey: What we can learn from the
financial services crisis
Olivier Fleurot, CEO, MSLGROUP
From Ignition to Recovery: The Components
of Today’s Crises
Nidhi Makhija, Senior Manager – Insights, MSLGROUP
How to Manage your Reputation in the Social Age
Merrill Freund, MD, San Francisco, MSLGROUP
Tap into Big Data: The Transcript of your Reputation
Frederike den Ottelander, Head of Digital  Social,
Netherlands, MSLGROUP
...66...12
...79
...20
...83
...33
...88
...98
...42
...104
...112
...49
...118...56
Today’s Stakeholders: Demanding,
But Open To Collaboration
FOREWORD
CEO, MSLGROUP
Olivier Fleurot
4 The Future of Reputation
Trust and reputation were underlying themes
at the World Economic Forum held in Davos
earlier this year. From the many sessions and
conversations, two trends were clear.
First, the trust crisis is still top of mind
for many international executives and
leaders. There was a general consensus that
organizations still need to restore trust and
actively manage their reputations.
Second, good reputation is considered good
for business and for smoother relations
with all stakeholders. There were many
discussions around the positive role that
business can play in society and leaders
seemed more willing to embrace sustainable
growth and corporate citizenship.
For corporates and brands, there is a strong
need to protect reputations and mitigate
risk and to leverage strong reputations for
competitive advantage. As trusted advisors to
our clients, we are dedicated to helping you
do both.
In this magazine, experts within MSLGROUP
dissect reputation to understand:
»	 What’s new, what’s same, what’s different,
what’s coming? Why does it matter to our
Corporate and Consumer clients?
»	 How does Reputation resonate with
Values, Purpose, Corporate Citizenship
and Talent Engagement?
»	 What should we know about the
Generation Gap, the new dynamics created
by the highly demanding GenY and soon
GenZ?
»	 How has the digital and social revolution
changed the game?
»	 From a North-American, Latin-American,
European, Chinese, Indian perspective,
what are the key components of a
reputation in the Conversation Age?
I hope that you will enjoy reading this report
and find that it simplifies the complex world
of Reputation.
5The Future of Reputation | Foreword
EXECUTIVE
SUMMARY
6 The Future of Reputation
SVP  Chief Strategy Officer,
MSLGROUP
Pascal Beucler
7The Future of Reputation | Executive Summary
People across the world are realizing the power of
social networks, valuing social performance ahead
of financial performance and demanding corporates
and brands contribute to local communities.
Reputation: The Now 
the Next
A lot has changed in recent years. In
particular, three shifts have boosted
reputation to the #1 Strategic Risk today, as
was found in a recent Forbes-Deloitte study.
1.	 Shift in stakeholders - From Powerless
to Empowered
2.	Shift in corporate ethics - From Social
Responsibility to Citizenship and
Sustainability
3.	Shift in purchase decisions - From buying
the Product to buying the Purpose
More and more, we are seeing these trends
emerge across markets. People across
the world are realizing the power of social
networks, valuing social performance ahead
of financial performance and demanding
corporates and brands contribute to local
communities. As a result clients across the
globe are embracing communications to
manage reputational issues.
In this issue of the People’s Insights
magazine, our experts explore the
concept of reputation to understand what
it is composed of, who is driving it, and
how brands can excel at building strong
reputations for the long term.
8
Already organizations are
engaging with millennial
customers, regulators,
shareholders, employees
and external influencers.
Not only is this
generation personally
driven to be better
citizens and make a
difference, it expects
businesses to do more
to address society’s
challenges.
The Future of Reputation
Today’s Stakeholders are
demanding, but open to
collaboration
In the past, companies catered primarily to
customers, regulators and shareholders, not
necessarily in that order. Today, thanks to the
social digital revolution, new stakeholders
have emerged:
»	 Millennials
born between the 1980s and 2000s, this
generation extends across all stakeholder
groups. Already organizations are
engaging with millennial customers,
regulators, shareholders, employees
and external influencers. Not only is
the generation personally driven to be
better citizens and make a difference, it
expects businesses to do more to address
society’s challenges
»	 Employees
past, current and future employees are
empowered by personal and professional
social networks. Through their actions in
both the real and virtual world, they can
have a direct impact on customer loyalty
and corporate reputation.
»	 External influencers
external subject matter experts are
passionate about shaping the future
and willing to co-create it. They exert
influence within their own networks of
like-minded peers or occasionally
through traditional media.
9The Future of Reputation | Executive Summary
Reputation Management:
From Risk Mitigation to
Competitive Advantage
These stakeholders represent a huge
untapped potential to be really authentic
and powerful advocates and influencers.
To engage them, companies must:
»	 Do the Right Thing – with ethical and
sustainable development plans
»	 (Re)engage with employees  tap into
their Social IQ – to harness authentic and
powerful voices
»	 Co-create the company’s offer and
strategy with influencers – to boost
innovation and add credibility to a brand’s
promise of sustainable development
»	 Engage around a shared purpose –
that aligns the interests of business
and stakeholders
In addition, corporates and brands can
leverage the latest social and digital tools to:
»	 Monitor what people are saying
with Big Data
Social conversations and data can be
analyzed to track the rise of negative
comments (who, what, where) and
intercept before they become crises,
understand how people really perceive
your brand and measure the impact of
communications in real-time.
»	 Communicate frequently and
consistently by becoming Social
Squared
Organizations should balance traditional
and new techniques – cater to influencers
with mass reaches while also tapping into
new influencers and niche communities
– and generate a steady stream of
meaningful content.
	 Finally, to succeed in the long term,
organizations must take measures to
elevate the importance of reputation
internally:
»	 Assign ownership to senior executives
at the Board Level
Senior buy-in is crucial to drive
meaningful change across the
organization and earn credibility
externally. By assigning responsibility
to the board or a dedicated executive or
team, organizations are better geared
to approach reputation as a competitive
advantage.
Today’s winning corporates and brands are
already inspiring young talent, benefiting
local communities, building a smarter
tomorrow, creating shared value and
committing to sustainability. Tomorrow’s
reputed organizations will be purpose-
led companies, good corporate citizens,
employers of choice and social squared
organizations.
We invite you to explore these ideas over the
next pages and to start a conversation with
us on how you can protect and project your
organization’s reputation.
Reputation Journey:
The Now  The Next
Olivier Fleurot,
CEO,
MSLGROUP
Pascal Beucler,
SVP  Chief Strategy Officer,
MSLGROUP
Paulo Andreoli,
Chairman, Latin America,
MSLGROUP
The Reputation Journey:
What we can learn from the
financial services crisis
The Reputation Complex:
Seeking Sustainability
in a Liquid World
Reputation and
Corporate Image Today
VOLUME 3, ISSUE 1
If there is one industry that has seen its
reputation seriously damaged in the last
decade it is undoubtedly the financial
services sector. Dubbed “the worst financial
crisis since 1929”, the Eurozone was, as we
know, severely shaken with several countries
ultimately facing embarrassing bail outs from
international creditors.
Olivier Fleurot
CEO, MSLGROUP
The Future of Reputation12
The Reputation Journey: What we can learn
from the financial services crisis
Financial services seemed
immune to failure
How did it all start? In the late 90s the economy was booming, liquidity
was abundant, and western banks were encouraging people to ‘live the
American dream’ and borrow ever more money.
A few bells started to ring in 2000 and 2001 when the high-tech
bubble burst and the Enron scandal unravelled. But trust in the
financial world was so deeply rooted that people perceived these
events as nothing more than isolated instances.
Riding on the people’s trust and ambitions, bankers continued to
chase higher profits and to offer more sophisticated and riskier
products. Hollywood and the media were quick to sensationalize the
ambition, hunger and, at times, greed of Wall Street.
The financial industry began to be perceived as a stairway to wealth –
an industry that was thought to be immune to failure. This perception
in turn attracted more and more investors and encouraged talented
people to join financial firms. Yet despite this vicious circle, a few lone
voices, mostly academics and analysts, began to warn that such growth
and expansion was simply not sustainable.
What finally made the bubble burst? In reality it’s impossible to
trace the cause of the crisis to any single event: experts often cite
deregulation, the rapid pace of innovation, lack of global regulation
and an industry-wide lack of accountability as critical factors.
REPUTATION JOURNEY | What we can learn from the financial services crisis 13
Trust vanishes: Reality goes beyond fiction in 2008
When the US housing bubble burst in 2007-08, trust in the financial world vanished. The extent of the damage
and the severity of the consequences were unprecedented and astonishing. Even worse: some banks and
institutions remained in denial and sought to hide the extent of potential losses.
In the five years that followed, we witnessed:
Bankruptcy
On both sides of the Atlantic, most notably
with Lehman Brothers going out of
business in the US.
Rebranding
Some banks changed their name to start
afresh (GMAC became Ally) or as a result
of being acquired (Northern Rock was
eventually absorbed by Virgin Money).
Penalties
The cost of the crisis in legal expenses and
settlement costs is still being paid – one
settlement reached as much as $13 billion.
Customer defection
Customers shared their negative
experiences and organized events such as
Bank Transfer Day on social networks.
The Future of Reputation14
Dramatic loss of public trust
Although many perhaps couldn’t understand
every single intricacy around financial
instruments, publics were certain that,
somehow, the financial world had betrayed
them. And their distrust extended beyond
the financial services industry, beyond rating
agencies and regulators, to the corporate
world as a whole.
Employee frustration
Dissatisfied employees too turned to
social networks, especially YouTube,
and news sites to share their stories.
Citizen activism
In 2011, young Spaniards launched the
“Indignados” movement, soon followed
by the global Occupy movement – groups
founded to enable the free and broad
expression of people’s outrage at the
economic crisis and anger towards
national governments.
Nationalization, Bailouts and
Forced Mergers
Central banks in the US and Europe injected
hundreds of billions into the system. They
nationalized and bailed out institutions and
orchestrated mergers to keep weak players
afloat. Governments in Asia too announced
large stimulus packages to offer some
stability to the system.
15REPUTATION JOURNEY | What we can learn from the financial services crisis
The Future of Reputation16
Rebuilding reputation
will take time
While trust in the financial industry has
improved since 2008, it remains lower
than in other industries and continues to
fluctuate, in response to post-crisis evidence
of misbehaviour and the emergence of new
scandals (such as the manipulation of interest
rates). The debate around executive pay and
bonuses still rumbles on in many countries,
especially in markets where taxpayer’s money
was used to bail out financial companies.
As we know, it can take years, at times
decades, for a company to build a good
reputation, and only a few days to destroy
it. The challenge of restoring trust and
good faith is made more complicated by
the challenge of communicating in the
information age.
People expect companies to engage in
two-way dialog in real-time and be consistent
across geographies. Beyond this, people
demand that companies look out for
all stakeholders and respect the larger
ecosystem in which they operate.
Becoming a genuine partner for entrepreneurs
Some banks launched efforts – both short and long term – to support local
businesses and entrepreneurs.
Over the last few years, banks have delivered on these expectations with initiatives that combine
Purpose, Participation, Performance and Sustainability. This meant…
Innovation
Challenges
Citipartneredwith
NBC’sEducation
Nation’sInnovation
Challengetofundentrepreneursin
theeducationspace.
Support
Communities
AmericanExpresslaunched
theonlinecommunityOPENForum,which
offersawealthofbusinessadviceandconnects
smallbusinesscustomers.
Australia’sBendigoBank
launchedthePlanBig
platformtohelp
entrepreneursachieve
theirgoals.
Change
Movements
Crowdsourcing
Campaigns
AmericanExpress
kickstarted
theSmallBusiness
Saturdaymovement,
toencourageAmericans,
andrecentlytheBritish,toshopatsmall
storesduringtheholidayseason.
KBCBanklaunched
TheGapintheMarket
tocrowdsourcebusiness
opportunitiesacrossBelgium.
17
Giving people a bigger say in citizenship programs
Some banks invited people to decide which organizations,
charities and even national monuments would receive the
largest share of funding.
Re-defining banking together
A number of banks engaged customers and students in
conversations and initiatives to build a better system.
REPUTATION JOURNEY | What we can learn from the financial services crisis
AmericanExpresslaunched
Member’sProjecttolet
customersmakeadifference
throughvotes,volunteerhoursor
donationoftheirAmEx
member’spoints.
ChaselaunchedChase
CommunityGivingtolet
peopledecidewhichcharities
wouldgetthebiggestshareof
grantmoney.
Barclaysintroduceda
new“co-created”
creditcard,
BarclaycardRing,to
givethecommunitya
sayinthecard’sfees,
policiesandrewards.
INGlaunchedNextGeneration
Bankingtochallengethe
‘bankersoftomorrow’to
envisionthefutureofbanking.
EvenformerRBSchiefStephen
HesterengagedstudentsatLSE
inacandiddiscussionabout
RebuildingBanking.
Video: World Economic Forum 2014: Pierre Goad
The Future of Reputation18
And, simply communicating better… or differently.
Several banks embraced new media to encourage financial literacy and differentiate
themselves from the ‘bad banks.’
In the last eighteen months, some banks have
indeed begun to successfully differentiate
themselves from the category and stand out.
As HSBC’s co-head of global communications
Pierre Goad shares, it is now a priority for
these institutions to actively improve their
reputation and manage reputational
issues early on.
Financial
Literacy
USBank
encouraged
teenagerstocreate
videosaboutthevalueofsaving.
Thewinningvideo-arapvideotitled
“Don’tforget‘boutyadebt!”
Humility
AIGusedvideoinfographicsto
communicateits“TurnaroundStory”
andannouncethatithadrepaidits
bailoutinfull.AIGfollowedthiswith
thefilm“ThankYouAmerica”-
albeittomixedresponse.Solidarity
DeutscheBank
expressedits
solidaritywith
customersagainst
unnecessarybankfeeswitha
tongue-in-cheekvideo“Youwouldn’t
acceptitfromyoursupermarket.”
WEF 2014: Sir Richard Branson and Arianna
Huffington talk about Plan B
19
A purpose-driven
tomorrow
Increasingly, companies are embracing
concepts of sustainable growth and corporate
citizenship – because they are indispensable
to attracting and retaining talent and because
they can also be good for business.
We are also seeing leaders make the case
for purpose-driven business (The Stengel
50) and partner with organizations and other
corporates to reinvent the way we do business
(Plan B). Indeed, this was the central theme
at the recent World Economic Forum at Davos
- Reshaping the World: Consequences for
Society, Politics and Business.
For banks, financial institutions and other
companies to recover, maintain and
build good reputations, we believe they
must implement six actions across the
organization, at all tiers and locations:
1.	 Establish a shared purpose
Identify a core purpose that drives the
organization and its people, and align
programs and strategies around this
shared heartbeat.
2.	 Co-create the future
Engage customers and other
stakeholders in helping defining the
organization’s policies, services and
corporate citizenship actions.
3.	 Lead the dialogue
Harness social, digital and other media
to lead, or at least contribute to the
continual dialogue around issues that
are important to customers.
4.	 Win over influencers
Demonstrate new priorities through bold
outreach to influencers, governments
and media.
5.	 Minimize risks
Anticipate and plan for issues that
may still negatively impact the
organization’s reputation.
6.	 Empower employees
Amplify good news by encouraging
employees to be strong ambassadors for
the good work the organization is doing.
These actions are not easy and transformation
will not happen overnight. But over the
long term, they will help safeguard a
company’s reputation and re-gain the
loyalty of stakeholders.
As Warren Buffett said,
“If you lose money for the company, I’ll be
understanding. If you lose a shred of the
company’s reputation, I’ll be ruthless.”		
	
REPUTATION JOURNEY | What we can learn from the financial services crisis
Pascal Beucler
Here are some tricky questions
our clients are dealing with today,
particularly at the C-Suite level:
What is the link between Business and
Reputation today? What is the value of
Corporate Reputation (the one of the firm,
not just of its brands, services  products),
whether in a B2C or B2B context?
Why and how is the Digital  Social
turmoil changing the whole game?
Why should we address
reputational issues
versus all stakeholders,
not just shareholders
but also customers of
course, employees and
partners, people and
communities?
Why is investing in Corporate
Citizenship critical today, from a
Reputation Management standpoint?
Is a silent firm
always defined
by others?
Why are silence or
secrecy not sustainable
options anymore?
SVP  Chief Strategy Officer, MSLGROUP
The Future of Reputation20
The Reputation Complex:
Seeking Sustainability in a Liquid World
21
The following analysis examines why reputation management is such a challenge in a world where transparency
is mandatory, social engagement is required, corporate citizenship is highly expected and content is king.
Corporate Reputation
is what supports
Corporate Equity
Basically, that’s what we mean with the
concept of “Reputation Complex” and the
way we define it:
The “Reputation Complex” is a moving
combination of various reputational
factors, components and drivers that
are linked in a close and complicated
way. This combination brings with it,
for all organizations, equal risks and
opportunities – the first to be managed
and the second to be exploited in
the right manner.
From this standpoint, Reputation
Management is probably today the most
demanding of our Global PR Practices, at the
intersection of Corporate  Brand Citizenship,
Financial Communications, Public Affairs,
Digital  Social and the Employee Practice.
As a matter of fact, Corporate Reputation
protects a company’s equity, plays a growing
role in investors’ eye, and strengthens
customer’s confidence in a firm’s products
and services. In fact, checking who’s behind
the brand/the product/the service – who
owns it? – is a fast-growing trend.
Corporate Reputation also nurtures key
opinion leaders’ appreciation, attracts the
best partners and helps recruit and retain
the best talents.
In a nutshell, Corporate Reputation is
cornerstone for all businesses. And, let’s
make this clear: Reputation is not fame,
admiration, image or esteem – all of these
can generate a positive halo, but none of
them is a founding factor. Let’s not mistake
the effect for the cause.
Last, contemporary Corporate Reputation is
not based only on cold analysis, rationale
and reason; it’s also linked to emotional
attributes, perceptions and empathy, all
of which are key drivers a genuine societal
commitment can help create.
REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
VOLUME 3, ISSUE 1
The Future of Reputation22
A fast-changing
ecosystem
Key attributes such as long-term investment
value, quality of products and services, and
financial soundness have been utilized year
after year by various rating systems asking
professional panels to evaluate firms on
X-point scales.
That’s for sure essential, but such classical,
endogamic and “coefficient centric”
approaches do not suffice anymore in a
world where ethics as well as the nature and
the level of engagement with people and
communities are cornerstone.
Corporate Reputation needs to be seen
through a different lens, with a much wider
focus and mind-set.
Who doesn’t see the terrible consequences
of the various scandals and crises the past
decade produced, starting with the Enron
earthquake and continuing today with the
2008-10 Wall Street “Big One” and post
crisis tremors? Each and every survey in the
L’air du temps: seen in a restaurant in
Berlin, January 23rd, 2014
past decade has described a very unfriendly,
suspicious, negative environment, with
unprecedented levels of public distrust
and anger.
Trust in all institutions, including corporations
and governments, remains at an all-time
low across the world, and this is worrying.
And it’s no surprise that the “Financial
Planet” continues to suffer from the poorest
reputation of all business sectors.
The age of low predictability
Liable to change rapidly, a Corporate Reputation is a composite of diverse and highly volatile
perceptions and emissions – most of which being hard to manage:
Few years ago, Reputation was a somewhat elusive intangible asset, in the hands of a small number of selected gatekeepers. Today, with the
explosion of social media, reputation can be enhanced or damaged in the blink of an eye. Most corporations are in the risk zone, where a low level
of public trust meets a high level of people’s empowerment. And this is exactly why every Reputation issue is potentially Global, Social, Viral.
23
It’s mostly out of control
of all the communications about an organization, very few
are within control today.
The comment is the message
be it employees or external stakeholders, people are generating far more
content about an organization than can be created by the organization itself.
We may like it or not, but it’s just what it is
some of the messages are positive, some of them are negative,
but together, it all reflects a firm’s or a brand’s reputation.
VOLUME 3, ISSUE 1
REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
Reputation as the #1 Risk in 2013
Changing perspectives is always a little slow, naturally, but the latest
“Exploring Strategic Risk” joint study by Deloitte  Forbes Insights
shows an impressive evolution over the past three years,
with Reputation rising to become the #1 Risk in 2013:
The “Exploring Strategic Risk” global survey included more than 300 respondents from the
Americas, EMEA, and Asia-Pacific. Nearly all respondents were C-level executives (263), board
members (22) or other risk executives (21). Surveyed companies came from all five major
industry sectors (consumer/industrial products, life sciences/health care, technology/media/
telecommunications, energy and financial services), and all had annual revenues in excess of
US$1 billion (or the equivalent).
Three years ago, reputation was already the top risk area in financial
services – and remains so today. Now, reputation is rated as the highest
impact risk area – not just overall, but for most individual sectors as well.
The Future of Reputation24
Why all of a sudden?
Social technologies are one of the main factors driving rising concerns
about reputation. Given the speed and global reach of social media,
companies today are losing control over how they are perceived
in the marketplace.
“One of the big changes in recent years is speed to market.”
“As a consequence of social media, reputations built up over
decades can be challenged in an instant. Customers are able
to make decisions on an organization based on social media
comment, potentially well before your ability to be able to defend
or articulate a response.”
- ANZ’s Jennifer Evans (Banking  Financal Products)
It takes 20 years to build a
reputation anD five minutesto
ruin it. If you think aboutthat
you’ll do things differently.
Warren Buffett
Q. Which of the following risk areas have the most
impact on your business strategy (three years ago,
today, and three years from now)?
41% | Brand
28% | Economic trends
26% | Reputation
2016Today2010
29% | Economic trends
26% | Business model
24%| Reputation -
Competition
40%| Reputation
32% | Business model
27% | Economic trends -
Competition
The “post-disintermediation” Age:
Reputation Management in times of Social Guerrilla
As the Deloitte-Forbes research clearly shows, reputation risk is now the biggest concern, due in large measure to the rise of social media.
Social media enables instantaneous global interactions that make it impossible for organizations to “control” the on-going conversation
about them, and the impact on their reputation.
This is true everywhere and for every organization, as shown in recent examples where public authorities were targeted
by citizens and forced to take action. Such viral initiatives are the “New Normal” today, and they prove to be very effective.
25
We clearly see a double move here:
From Influence to Engagement:
Influencing influencers silently, secretly, behind the scenes, has been the norm
for decades, and it still works in specific contexts. But it’s far from enough today:
in all industries and everywhere, disintermediation is rapidly, and profoundly,
changing the rules of the game.
Brokerage based businesses are all potentially under threat. Gatekeepers and
barriers are vanishing, while people use the boundless power of social media
to raise their voice and be heard by the decision-makers, be they politicians or
business executives.
1
REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
From Public Affairs to People’s Affairs:
Leaders – whether politicians or business execs - are put directly under people’s
heavy pressure through Twitter, Facebook or YouTube.
Within days, sometimes hours, they have to cancel an initiative, abandon a
controversial project or quickly act to address a pressing public demand.
2
AOL’s CEO Tim Armstrong
reversed a change in
policy following employee 
media backlash
(via washingtonpost.com)
Dutch Parliament intervened to
ensure a subsidy was provided
to the Metropole Orchestra after
the popularity of the Metropole
Tweetphony campaign
Russian politicians fixed city
potholes after a social guerrilla
campaign by news site Ura.ru
(Make the Politicians Work)
#TweetsFromTheDeep is another great example of
Social Guerrilla in the area of public affairs.
What would you do to help defend UK fishermen,
under permanent scrutiny for their alleged
exploitation of the sea’s resources: classical media
relations? It may not bring much attention from the
audience you wish to engage with. An ad campaign
in mainstream media? It will be a bit costly for a
professional association and, again, it won’t be
authentic, genuinely human-based, it will just be
one point of view versus the other.
Here’s what the National Federation of Fishermen’s
Organization did: give a fisherman access to their
Twitter account and let him tell his own story
himself, from deep in the ocean, with his own words
and tone of voice. Much more efficient. Brilliant!
The Future of Reputation26
Video: The NFFO Fisherman David Warwick
sends Tweets from the Deep
Whether it is a “real world” crisis (catastrophe,
sex scandal, oil spill) or a “flash mob” of
activism generated online (Greenpeace
vs. KitKat), the news curve and the crisis
curve are closely linked, and Social Media
is spreading the blame game at a very high
speed. The Bank of America case is a very
insightful one, as Nidhi Makhija demonstrates
in this report (see Page 74).
From low intensity controversies to high intensity crises: Reputation is at stake
27
Social Media’s impact on share prices is
critical too, particularly since the SEC ruled
in April 2013 that companies can disclose
important information on social media
accounts as long as they alert investors in
advance of which platforms and accounts
they will use. Now, in addition to spontaneous
celebrity social endorsements (Oprah’s
$150mn tweet), companies’  executives’
social media posts are impacting stock price
and movement.
For instance, Netflix CEO’s Facebook post
sparked a 13% rally in Netflix shares, sparked
an SEC investigation and resulted in a new
regulation allowing companies to make
announcements through social media. A
hacker’s tweet from the AP account, that
‘President Obama was injured in a White
House explosion,’ erased $200 billion from
US stock market for six minutes in April 2013.
Analysts blame algorithm trading systems
that scan news and social conversations for
the temporary drop.
Oprah’s spontaneous tweet 
instagram generated
and boosted Groupe SEB’s
market capitalization by
1 mn tweets-
$150 m
27
VOLUME 3, ISSUE 1
REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
The Reputation Complex: articulating Content  Engagement, to hit the sweet spot
Building and managing a reputation today is firstly building and managing a content strategy, then rightly
engaging around it with all relevant audiences.
•	 What do you stand for as a firm?
What’s your purpose?
•	 Does your Corporate Governance meet today’s societal
expectations: ethics, quality of leadership, social
responsibility and diversity?
•	 Is your business performance sustainable?
•	 What’s the social impact of your business on people,
communities and society at large?
•	 What does your Corporate Citizenship consist of?
•	 Are you an Employer of Choice?
CONTENT ENGAGEMENT
Content is King, and it all starts
by defining and expressing
the fundamentals of every
organization’s core strategy:
It’s then about rightly engaging
with all stakeholders:
The Future of Reputation28
•	 How can Communications better shape  share the story
	 about the firm’s history, legacy and strategy – both
internally and externally?
•	 Beyond the Investor’s Day, the priority is to craft a narrative
architecture to help larger audiences understand where the
company comes from and what it stands for.
•	 Why sustainability, value creation and innovation are
key pillars to its success?
•	 How the firm, wherever it is on Earth, is committed to
developing close links with people and communities?
•	 Why building a strong Employer Value Proposition is
crucial for today and tomorrow?
Over the past few years, some companies (from IBM to PwC) which happened to be at stake did better than others, because they better
managed what they wanted to focus on (content), and because the way they engaged with people was superior (relationship).
The Reputation Complex is thus a system of different levels and dimensions, as well as an on-going  iterative process with no beginning
and no end, blending beliefs, perceptions and representations, all based on a firm’s global behaviour. Helping our clients navigate the blur
and manage complexity is our main task today in the fast-changing world of PR – People Relations.
Before being good or bad – and moving from one state to the other doesn’t have to take very much time – a reputation firstly is:
A firm’s resistance, and potential resilience, very much depends upon these four points, when its reputation is at stake.
IBM announced its ambition
to create a Smarter Planet and
involved people, innovators
and local leaders in its mission
(People for a Smarter Planet
community, Smarter
Cities Challenge),
PwC appointed a head
of reputation to mend its
relationship with regulators,
and is positioning itself as
part of the conversation
around building trust
(Inspiring Trust report),
Coherent, or not,
with what a firm
actually is about,
and stands for
Consistent, or not,
with its core beliefs
and values
Solidly grounded,
or not, into a well-
told story
Managed, or
not, properly
21 3 4
29 29REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
From Philanthropy  CSR to Corporate Citizenship
This was again, over-demonstrated few weeks ago at the 2014 World Economic Forum in Davos.
To “reset” the world’s economy, restore some
sort of public confidence in the world of
business - particularly in the Financial sector,
as we see it - many top leaders highlighted
the fact that corporations need to speak
and act as Good Corporate Citizens. Such a
movement is here to stay, and it’s a growing
concern for all stakeholders.
As Unilever CEO Paul Polman loudly
claimed in Davos: “You don’t get attacked
for doing the right things!” Polman claimed
that if profits were necessary, they shouldn’t
be placed above purpose. He also claimed
that Unilever had a “moral obligation” to
help address the world’s problems: “If we
don’t work in transparency, we undermine
trust.” He admitted that this was not an easy
transition for companies to make: “To get
these values into the company is awfully hard
work and takes a long time.”
However, he used the example of Edward
Snowden to highlight what can go wrong
when companies come under attack in an
environment where “individuals can put
you out of business.”
This is the dominant trend today.
Philanthropy was the norm: giving back
discretely and without necessary links
between the business and the causes the
firm was supporting. Citizenship is the
new normal: it’s about putting the firm’s
Citizenship engagement at the heart of its
purpose and business strategy.
The Future of Reputation30
When the winds of change blow,
some people build walls and others
build windmills.
- a Chinese saying
31
VOLUME 3, ISSUE 1
REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
Purpose Led Company
Reputation Complex
Employer of Choice
Corporate Citizen
Social Squared Body
At this point, in most markets and industries, it
seems that the “protection” mindset is more
widespread than the “projection” one. It is our
mission to help our clients go for the windmill
option, as projection is the key for building a
sustainable Reputation in the liquid age.
The windmill will create a lot of value, if
corporations are genuinely purpose-led, acting
as respected Corporate Citizens and being
seen as proven Employers of Choice, and if
they behave as well-connected and
fully-engaged organizations.
And by the way, let’s remember that “Purpose”
and “Propose” have the same etymology:
a company with a solid Reputation is thus the one
which has a relevant purpose, translating into a
robust value proposition for all stakeholders.
32
So, should we build walls, or windmills?
The Future of Reputation32
At the dawn of capitalism half a millennium
ago, a business’s reputation depended
on the skill of its owner to display himself
in mansions designed by the foremost
architects, where he received people in
Faustian style under the gaze of family
portraits, preferably signed by great masters.
Corporate image in the mid-16th century
changed in direct proportion to luxury,
in a figurative attempt to use abundance
as a means of facing down any economic
catastrophe. And the method made sense,
because high risk businesses – trade, banking
or manufacturing – could keel over at a
moment’s notice as they suffered the side
effect of long-running and inconclusive wars,
plagues, piracy or the planned bankruptcy of
monarchs who underwrote bills of exchange
with no backing in order to patch up their
royal coffers.
Paulo Andreoli
Chairman, Latin America,
MSLGROUP
Origins of Corporate Image
REPUTATION JOURNEY | Reputation and Corporate Image Today 33
Reputation and Corporate
Image Today
Human intuition has always defined social hierarchy
through material possessions. With the triumph of capitalism,
respect also became a major factor and rapidly
grew in importance as trade expanded and the Industrial
Revolution and globalization came about.
Sumptuous pomp as a seal of legitimacy was
the driving idea that had developed through
the Middle Ages and had its roots as far back as
the Greek and Roman empires. Ostentatious
symbolism was so deeply rooted that Europe
embraced it, setting aside the modesty and
charity it preached.
Human intuition has always defined social
hierarchy through material possessions. With
the triumph of capitalism, respect also became
a major factor and rapidly grew in importance as
trade expanded and the Industrial Revolution and
globalization came about.
The Future of Reputation34
From healthy balance-
sheets to ‘Doing the
Right Thing’
However, a sudden and important change
recently occurred; this change became
increasingly clear during the last decade of
the past century when competition broke out
of national boundaries and gave consumers
an increasing number of choices – and when
faced with products or services presenting
similar attributes, these consumers are
showing a growing disposition to select the
supplier who “does the right thing.”
The result of this outpouring of citizenship
is the profusion of vegetables grown
without pesticides, organic wines, veal
from cattle slaughtered painlessly, lead-
free lipstick, the launch of hybrid cars,
green banks, delivery systems which pay
fines if deliveries are delayed as well as
investment funds which only purchase
stock in companies that do not use child
labour – among many other examples of
the imaginative methods used to tug on a
customer’s heartstrings.
In the wake of this crusade, the number of
executives responsible for Sustainability has
multiplied. These executives report directly
to the CEO and their actions are specifically
targeted at increasing the company’s
reputation (and bottom-line) by giving their
full attention to a wide variety of interests
intertwined with their everyday business
activities. Initiatives and other measures
along these lines have inspired corporate
communications, which have sought to
nurture empathy and engagement.
In the 21st
century, modesty and good
behaviour now rival healthy balance
sheets as a means of developing a strong
reputation, part of an attempt to draw a
dualistic and implausible contrast with
direct competitors who hesitate to
adopt the same approach.
35REPUTATION JOURNEY | Reputation and Corporate Image Today
The Future of Reputation36
Challenges of this new approach
Companies that decide to take this approach face at least two challenges.
A commonplace one is that every prosperous and
long-lasting company must adopt best practices,
pay its bills on time, comply with regulations, be
ethical, respect their employees, provide their
shareholders with adequate returns and take their
customers opinion seriously – basically, doing
the right thing, just without the quotation marks.
For a company like this, a flashy Sustainability
Department is simply redundancy; or rather, a
modern variation of the luxury that primitive
capitalism used to communicate solidity.
The second problem is a subtler one.
It is born out of the investment needed
to confirm that the Sustainability area
has an important and powerful role to play in
crucial company decisions. We used to have
just Social Responsibility, now we also have
Sustainability. Company executives are finding
themselves increasingly compelled to incorporate
new practices, which are actually nothing more
than simply doing the right thing – an inherent
value for all successful companies.
37REPUTATION JOURNEY | Reputation and Corporate Image Today
The speed with which information spreads
over social infrastructure has made
companies vulnerable and managers need to
be constantly aware of what their companies
are doing and how the public perceives their
products and services. They need to realize
that online interaction will be a benefit but
also that public exposure – from which they
will not be able to hide – will make them
more vulnerable. Being present is no longer
a choice but a reality.
Reputation has become an asset which is
at the same time essential for success
and also the greatest threat to that
success – one more challenge for
managers who, until recently, needed
only to concentrate on producing healthy
financial performance indicators.
Today, an attitude or a gesture by an irritable
employee can undermine several years of
positive reputation and can have a direct
effect on the company’s results and the way
it is perceived. Crisis management processes
are now online and a component of strategic
business management.
Like marketing, corporate communications
will increasingly depend on more accurate
information and analysis. This means that
the challenge is to anticipate trends based
on “Big Data” and depends on our ability
to interpret the “collective unconscious”
and provide companies with guidance
when taking decisions.
Every company’s sales, products,
human resources and corporate image
face highs and lows. In the real world,
business brings with it unexpected
fluctuations. This makes it all the more
important to keep doing – and
re-defining – the right thing.
The Future of Reputation38
39
CLICK TO SHARE
Walk the talk:
The need for Rational
and Long-lasting Action
The era of institutional hypocrisy has
ended. There is little point sponsoring a
film, a winning team, spending millions on
advertising if, for example, social media
challenges the poorly managed acquisition
of a foreign oil refinery. The worst type
of problem for a company’s reputation is
caused by incorrectly defining its objectives
and the way in which this message will
be translated into a language capable of
expressing it to non-specialists.
For example, if oil begins its life as a
pollutant, anyone who works with oil runs
an inordinate risk if they try and present
themselves as a producer of clean energy.
Companies that make statements in
an attempt to change the facts are only
creating problems for themselves. It is
surprising to see so many capable people
being tripped up by this approach, because
500 years of experience should by now have
taught business managers how to build
value and generate results through rational
and long-lasting action.
These experiences clearly showed that
a company’s reputation has intrinsic
weaknesses tied to its business, it can be
affected by natural disasters, by a poorly
concluded transaction, by a gesture, an
attitude and when hypocritical and/or
prideful statements are laid bare,
often at great cost.
This does not mean that corporate image
only comes in two colours: black or white,
without any grey. Legitimacy is a long-
lasting asset, it can stand up to abuse and
can be restored provided that every negative
experience is treated transparently, openly,
intelligently and with great professionalism.
39REPUTATION JOURNEY | Reputation and Corporate Image Today
Today’s Stakeholders:
Demanding but open
to collaboration
Your Corporate  Brand
Reputation is Now in the
Hands of Millennials
The Future of Reputation
is about Building from
the Inside Out
Reputation Building by
Influencer Collaboration
Scott Beaudoin,
Global Practice Director,
Corporate  Brand Citizenship/
PurPle, MSLGROUP
Jason Frank and Brian Burgess
Global Co-leaders,
Employee Practice,
MSLGROUP
Martin Dohmen,
Germany Director, Corporate 
Brand Citizenship/PurPle,
and Chief Strategy Officer,
MSL Germany
VOLUME 3, ISSUE 1
Scott Beaudoin
Global Practice Director, Corporate 
Brand Citizenship/PurPle,
MSLGROUP
For companies to win in the new reputation
economy, they need people to believe in
what they stand for and engage them in
their citizenship efforts. That is never truer
than it is with today’s Millennials who will be
roughly 75% of the global workforce by 2030.
Millennials are not only our current and future
employees (and bosses) but they are our
current and future customers. Understanding
their personal views and ideals will be the
only critical way to help us manage corporate
reputation now and well into the future.
The Future of Reputation42
Your Corporate  Brand
Reputation is Now in the Hands
of Millennials
While most Millennials (74%) believe business is having a
positive impact on society, by generating jobs (48%) and
increasing prosperity (71%), they think business can do
much more to address society’s challenges.
What Millennials Want
and Expect
According to Deloitte’s third annual Millennial
Survey, while most Millennials (74%)
believe business is having a positive impact
on society, by generating jobs (48%) and
increasing prosperity (71%), they think
business can do much more to address
society’s challenges in the areas of most
concern: resource scarcity (68%), climate
change (65%) and income equality (64%).
Additionally, 50% of Millennials surveyed want
to work for a business with ethical practices.
TODAY’S STAKEHOLDERS | Your Corporate  Brand Reputation is Now in the Hands of Millennials
43
Deloitte’s third annual Millennial Survey surveyed nearly 7,800
Millennials from 28 countries across Western Europe, North America,
Latin America, BRICS and Asia-Pacific about business, government
and innovation. The questionnaire focused on the role business plays
in society; its objectives, impact and outcomes; the responsibility
of business and government and how well each is addressing the
challenges faced by society.
Deloitte’s Millennial Survey also found that Millennials are eager
to make a difference. Millennials believe the success of a business
should be measured in terms of more than just its financial
performance, with a focus on improving society among the most
important things it should seek to achieve. Millennials are also
charitable and keen to participate in ‘public life’: 63% of
Millennials donate to charities, 43 percent actively volunteer
or are a member of a community organization, and 52%
have signed petitions.
This intersection of Millennials’ expectations and their eagerness
to make a difference provides an opportunity for companies and
brands if they are smart enough to seize it. You don’t have to look
far to find some companies already maximizing this opportunity and
a closer look will show you that these are the companies and brands
whose reputations are benefiting from it.
60%
40%
The study discovered that people’s willingness to buy,
recommend, work for, and invest in a company is driven 60%
by their perceptions of the company
And only 40% by their perceptions of the products
The Future of Reputation44
Three of the seven dimensions that drive reputation (citizenship, governance, and workplace)
fall into the CSR category—and analysis shows that 42% of how people feel about a company
is based on their perceptions of the firm’s corporate social responsibility practices.
In June of 2013, Reputation Institute, a
private global consulting firm based in
New York, invited about 47,000 consumers
across 15 markets to participate in a study
that ranked the world’s 100 most reputable
companies–all multinational businesses with
a global presence. In addition to finding the
companies with the best reputations,
the study discovered that people’s
willingness to buy, recommend, work for,
and invest in a company is driven 60% by
their perceptions of the company, and only
40% by their perceptions of the products,
says Kasper Ulf Nielsen, Reputation
Institute’s executive partner.
Each company earned a “RepTrak™ Pulse”
score representing an average measure of
people’s feelings for it. The scores were
statistically derived from four emotional
indicators: trust, esteem, admiration, and
good feeling. Reputation Institute then
analyzed what it calls the seven dimensions
of corporate reputation, including
workplace, governance, citizenship, financial
performance, leadership, products and
services, and innovation.
45TODAY’S STAKEHOLDERS | Your Corporate  Brand Reputation is Now in the Hands of Millennials
It turns out the corporation with the very best CSR reputation is Microsoft,
the Washington state-based software giant. Being a responsible global
corporate citizen is a commitment made at all levels of Microsoft.
It’s not a top-down effort, but rather bottom-up.
It’s a testament to the company’s worldwide employees and the
difference they are making in their local communities. While the
company has a small citizenship team at the corporate level, they
have citizenship champions across the globe and they work daily in
collaboration with a wide range of stakeholders on a range of issues
important to local communities.
In September 2012, Microsoft refocused much of their efforts around
creating opportunities for youth by launching Microsoft YouthSpark,
a major initiative to connect hundreds of millions of youth with
opportunities for education, employment and entrepreneurship.
The company is working to bridge the opportunity divide that
separates youth who have opportunities from those who don’t, with
the goal of helping young people secure their individual futures and
also the future of society.
Most reputable corporates  brands:
The Future of Reputation46
Most reputable
corporates  brands:
Google is also at the top of the list and
continues to be seen as the best company to
work for in the world.
Google’s strong workplace perception helps
secure its strong reputation overall and
within CSR.
In the Reputation Institute’s study, fifty
percent of consumers across the 15 countries
say they definitely think that Google treats its
employees fairly and takes their well being
into consideration.
Google knows how to put caring in the hands
of the younger generation. “Google China
Social Innovation Cup for College Students”
is a nationwide competition that aims to
empower China’s youth to become agents of
social change.
By soliciting project ideas from college
students and funding viable proposals, the
company hopes to instill in China’s future
leaders the values of social responsibility,
the importance of community welfare, and
the spirit of self-empowerment. Among all
colleges and universities that participate
in the competition, the 100 that top in the
number of proposal submission will share
500 Google “Campus Volunteer Stars”
Scholarships every year.
47TODAY’S STAKEHOLDERS | Your Corporate  Brand Reputation is Now in the Hands of Millennials
The Future of Reputation48
a sense of fulfillment. So why would we put our company’s
reputation in their hands? It’s easy. They have the potential to be a
company’s most ardent supporter and their voices are heard and
their messages will travel.
Creating opportunities for Millennials to engage in social
purpose is critical.
This could be anything from surveying employees on where to
donate a portion of the company’s charitable funds to creating a
volunteer program. Millennials are already open to engaging with
brands and look for purposeful work. It’s time to start leveraging
their potential and incorporating employees into the planning and
implementation of purpose goals.
With research indicating that 88 percent of Millennials make
employment choices based on a company’s CSR values and 86
percent consider leaving a company if its Corporate Citizenship
values no longer met expectations, it’s clear that to lead in the new
reputation economy, businesses must have strong voices when it
comes to their values and initiatives. The impact of citizenship on the
future of reputation is crystal clear.
Engaging Millennials around Social Purpose
End of Trust
Rise of
Shared value
Quest for
meaning
Power to
people
The Millennial generation has a reputation of being entitled, but this
is part of the result of their desire to engage with the world around
them. They feel responsible to themselves, their neighbors, their
communities and the planet. They grew up learning that their
actions directly affect the world around them. In return, they believe
companies should act the same way.
The tension lies in the fact that Millennials are notorious for having
high employee turnover rate, particularly if their job does not provide
49
The human truth
beyond the theory
You’ve managed people, and led them –
so have we. We don’t need convincing of
the impact of ‘employee engagement’
because we experience it first hand almost
every day. Forget the terse business
definitions, you can see ‘engagement’ in
someone’s eyes, their body language, the
things they say; and you can measure it in
anything from their attendance record to
their sales figures.
These tangible outcomes of ‘employee
engagement’ have equally tangible
implications for corporate reputations.
As shared personal experiences become
the dominant currency of reputation, so the
shared experiences of employees, and the
people they interact with, continue
to grow in value.
The Future of Reputation is about
Building from the Inside Out
Jason Frank  Brian burgess
Global Co-leaders, Employee Practice, MSLGROUP
TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
Take just one large cross-industry survey from
the US (TARP), which suggests that almost
70% of customers who leave a business
or brand will do so because of a negative
experience with one of their employees –
not for a lower price or better product.
In our increasingly knowledge and service-
based economies we’re moving quickly
from valuing our people’s IQ to their
Emotional Quotient (EQ) and now their
Social Quotient (SQ).
Success is about ‘how’ we do things, not
‘what’ we do. In that context the things your
people say and do define reputations more
and more - not least because their words and
actions can be amplified across global digital
networks of influence in an instant – either by
them or someone else.
The Future of Reputation50
Unprecedented risk
and Opportunity
From the Goldman Sachs ‘Vampire
Squid’ saga on one hand, to the famous
smiling service of Pret-a-Manger fast
food staff on the other, it doesn’t take
a genius to appreciate the growing risk
and return that lies in taking employees
more and more seriously as builders or
destroyers of reputations.
So, what are the implications for
all of us? How do we as corporate
communicators harness the power of
employees to build credible, sustainable
reputations, and how do we mitigate
against the risks?
Here are five tips to help you ensure
that your employees become a force
for good in your on-going quest to
build and protect reputations in today’s
conversation age.
Make Them Part
of The Plan
Think  Embrance
Networks
Re-prioritise to
Reflect The New
Normal
Unleash The Power of
Content  Influence
Cross The
Functional Divide
steps to success
in building
reputations from
the inside out
51TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
Too often we see corporate communications
briefs with employees identified as a
‘secondary’ audience, receiving little if any
strategic consideration.
Too many opportunities to add greater reach,
power and credibility to our communications
are being missed by thinking in traditional,
largely external broadcast terms.
Whether it’s from a risk mitigation point of
view, or a more positive standpoint, we need
to move employees up the priority list
when devising communications strategies.
Dependent on the nature of the challenge
any of the following questions can be useful
to ask: How would employees react to this?
The growing reputational power of the
employee is evident in the number of
Corporate Communications Directors
assuming responsibility for communicating
with employees. This makes sense, but
it’s incredibly important that Corporate
Communicators are in regular conversation
with HR and other employee specialists
How can they help us by validating this or
adding credibility in some way? How can
they help us to ensure that the messages
reach more people? How could they derail
this? It may be that when you ask yourself
these questions you draw a blank, but those
instances are becoming increasingly rare
for our clients.
within the organisation. The value of working
together goes both ways.
HR can provide employee insight
and expertise, whilst Corporate
Communications can bring their expertise
to support the function that has such
a profound impact on employee
engagement levels.
At the most basic level Corporate and more
HR focused employee communications
need to be planned in a coherent, joined-up
way to avoid contradictions, duplications
and wastage. At a more sophisticated level
the Corporate Communications Director
needs to be fully in tune with the Talent /
HR agenda (and vice-versa). It’s essential
that Corporate Communications are in
tune with the ebbs and flows of employee
engagement – whether that’s through formal
annual employee surveys or more informal
observations and feedback.
The relationship and mutual support between
HR and Corporate Communications is more
fundamental than ever to the art and science
of building and managing reputations. Time
spent in making it work is time well invested.
The Future of Reputation52
Make them
part of
the plan
Cross the
functional
divide
As the power of almost every available
transmission mechanism for corporate
messages wanes, the importance of
personal networks and shared experiences
continues to grow.
The reputational mathematics are crude but
powerful. Take a global services organization
of 160,000 people, typically something
like 75,000 people would have left the
organization in the last three years. If we
take a conservative figure of just twenty
relevant people in each of the 235,000
past and present employees’ personal and
professional networks, we quickly come to a
direct ‘tier’ 1 network figure of 4.7 million.
Moreover, the reality is that many of these
people move to the ‘other side of the fence’
and become clients or potential clients.
It’s little wonder that many of the world’s
leading services organisations are investing
heavily in alumni programmes, designed
specifically to ‘engage’ former employees,
maintain relationships, and build networks.
Above all this is an opportunity. With the right
content, education and simple software tools
we can massively enhance the reach and
credibility of our communications through our
employees’ networks.
We’ve seen it first hand through our own
experiments with simple social media plans,
education and amplification tools – a 140%
increase in website traffic in two weeks speaks
for itself. We’re now doing it for clients.
2,35,000 20 4.7mN
160,000
75,000
EmploYees (Past And pResent) Tier 1 networKRelevAnt sOcial
ConneCtions
53
Think
 embrace
networks
TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
Almost every single organization we’re
working with is grappling with the issue of
how they effectively and efficiently source,
curate, store and distribute compelling
content that will enable them to sustain
valuable and meaningful dialogue with
their stakeholders.
If organisations can create a culture that
empowers people to create content, by
making it easy and by rewarding it, the job of
corporate communicators will become that
much easier. So much time is wasted tracking
down great people and their stories.
Imagine having a culture where people were
queuing up to share their amazing personal
and professional stories with you – adding
depth, credibility and emotion to your
corporate narrative and messages. If you
can go some way towards fostering that sort
of culture in a controlled and focused
way you’ll become so much more effective
and efficient in satisfying the insatiable
demand for conversation and content
from your audiences.
Every time we work with clients to tap into
the vast storytelling power of their employees
we’re amazed by what we bring to the surface.
If only that could be sustained the
practice of corporate reputation building
could be transformed.
The second part of this equation is identifying
and empowering the real influencers. One of
my social media experts sent me a fascinating
article just a few days ago. It told the story
of a major organization that had recently
conducted a social network analysis exercise
to identify which employees were most
influential – who had the most social ‘Klout’.
Unsurprisingly the influencers weren’t at the
top of the organization.
The lesson for all of us is that lurking within
our organisations are people with huge
untapped potential to be really authentic
and powerful advocates and influencers.
Of course we need to be mindful of not
compromising their authenticity, and think
very carefully about how we can support their
activities, but what an exciting opportunity.
A call to arms
The relationship between employee
engagement and corporate reputation is a
massive topic and we’ve barely scratched
the surface but its importance is clearly
on the rise, and the possibilities are
largely untapped.
In a world where the corporate voice is
falling on deaf ears and where the grip
of traditional channels is weakening,
the imperative to tap into this massive
opportunity is growing every day. Which
brings us neatly to step 5:
54
Unleash the
power of content
 influence
The Future of Reputation
In virtually every organization expenditure
and effort on communicating externally vastly
outstrips efforts focused on employees. But
all the advertising, glossy films, websites, and
corporate spin in the world can’t paper
over the cracks of a bad customer
experience, or drown out the noise of
negativity from employees.
Our learning from experience is simple,
and it applies equally to the TV-obsessed
Marketing Director as it does to the Corporate
Communications Director:
If organisations re-oriented just a small
percentage of that external spend and effort
to engaging employees with their visions,
values, and purpose, then overall reputation
building efforts would be more effective
and ultimately less costly. And the effects of
higher engagement levels will be multiplied
if you can really empower your people to
share their stories and enthusiasm.
55
Re-prioritise to
reflect the new
normal
TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
The Future of Reputation56
Reputation Building by Stakeholder
Collaboration
Numerous companies and brands have
recently recognized the sign of the times
and moved on to create a new dimension
of interaction with their external and
internal stakeholders.
New opportunities open up due to the arrival of
new media, channels and platforms – as new
challenges arise in the wake of eroding trust,
and the growing demand for participation in
the always-on conversation economy.
Which are the key factors of success, then, in
turning corporate and brand relations into a
lasting and mutually beneficial stakeholder
engagement? What are the most promising
choices in setting up “Purpose + People”
programs meant to effectively involve
customers and consumers, employees and
influencers, thought leaders and citizens? How
to best establish communications platforms
and programs to add to an attractive “citizen
brand” profile? Who could be the audiences
participating in the evolution of corporate
and brand reputation - through sustained and
constructive dialogue, productive ideation and
sustained co-innovation?
Martin Dohmen
Germany Director, Corporate
 Brand Citizenship/PurPle,
 Chief Strategy Officer,
MSL Germany
57
The Why: stay close to
your brand purpose but
follow the conversation.
An inquiry into the purpose-related
communications of major global
companies – like MSLGROUP’s
PurPle (Purpose + People) Index – reveals
that most key topics around which brands
choose to initiate a dialogue fall into four
categories: health, environment, education
or human potential. Ideally, a brand purpose
forms a bridge between the brand’s DNA
and its most significant overall promise to
stakeholders and society alike.
Hence, pharmaceutical firms like Janssen
tend to collaboratively address health issues,
a global energy player like Shell is most
credible as thought leader and conversation
host on energy matters etc. Increasingly,
reputation hinges on stakeholders’ trust
in a brand’s future ability to address, and
successfully cope with, upcoming demands,
challenges and opportunities. Beyond
competence and responsibility, this belief
makes a decisive difference in securing brand
competitiveness and appeal.
TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
Video: Future Influencers: Unlocking the Energy
Challenge
IBM’s Smarter Cities initiative has been a
good example for a company focusing on a
future agenda outside of its comfort zone.
The Future Influencers think tank initiated
by Siemens equally proves that current
business and technological expertise can
be made to bear fruit in collaborating with
decision-makers and influencers on larger
topics, like urban mobility and urgent global
sustainability issues.
Remaining flexible matters too: if fracking
in the United States turns part of the
global energy agenda upside down, brands
should be willing to follow and inspire the
meandering energy conversation.
IBM challenged people to build a smarter planet
The Future of Reputation58
The What: if you are not
up for a long-runner,
do not start to walk
(and talk).
Format options for collaborations range from
open crowdsourcing of ideas to exclusive
conceptual debate and from controversial
dialogue to collective co-creation.
When teaming up with some of the most
imaginative and inventive talents and start-
up entrepreneurs, GE’s Ecomagination
Challenge offers a model for collecting and
rewarding innovative (business) ideas. If the
aim is to empower consumers to co-direct
the brand’s cause-related engagement
activities, the Pepsi Refresh Project still offers
a bold pioneer model, even though it has not
been continued.
Open collaboration formats are challenging,
not only in keeping out non-productive
participants. It is by no means less complex to
initiate, manage and stimulate more exclusive
or closed collaboration communities. A well-planned and intense moderation (with
24/7 capabilities) is key in an external debate
for ideation or concept development, as in
any advanced corporate social intranet drive.
59TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
The Future of Reputation60
The How: networking
and own visibility beat
platform technology as
attractors.
State-of-the-art multi-media event
experiences and digital collaborative tools
indeed make a big difference to create
attractive environments for advanced
interaction. Yet, communicators tend to
overrate the technological platform factor.
Experience indicates that a strong
conversational agenda fuelled by authentic
and engaging storytelling has a much
stronger effect in attracting audiences
to become initially involved in
collaborative communications.
A high-level peer-group offering new
networking opportunities beyond the actual
dialogue, a chance to personally contribute
to a ground-breaking content production,
exclusive access to brand ambassadors and
thought-leading personalities, and, last not
least, added visibility as opinion-leaders
and influencers. These are key benefits
potential collaborators will be looking for and
appreciate – as the build-up and evolution
of the Future Influencers community
has demonstrated.
Monetary or commercial incentives are
also able to drive participation, especially
in idea competitions.
In the long run, however, the trust
and reputation brands can gain from
intensified, more direct communications
and relations with their stakeholders will
only come through benefits beyond money
– and only with a credible commitment to
make purpose-related collaborations
last and grow.
61
The Who: talking with
“my” generation – if it
has influence.
Some general learnings apply, regardless
of whether company managers or analysts,
employees or environmental activists, brand
followers or academic experts are to be
involved in a collaboration. Stakeholder
communications grow outside in: the 90
(invitees) / 9 (inactive members) / 1 (active
participant) community principle roughly
holds true.
This makes it necessary to initially address
a much larger group than the one the
collaboration is planned to be eventually
carried out with. At the same time,
community engagement grows inside out.
This makes it an imperative to nurture the
most active players in the conversation
- because they are the ones spreading
the collaborative impulse to non-active
collaborators and to larger audiences outside
of the collaboration.
The need for initial awareness and attention
makes it highly desirable for a brand to focus
collaborations on those parts of its audience
which have the biggest influence - be it
through their professional authority (and
publishing track record) on “my” topic or
through their social media clout. Whoever is
capable and likely to spread the news about
the collaboration and the brand’s role in it is a
relevant candidate.
Finally, external stakeholders and audiences
– including critical institutions like NGOs and
citizen advocates - have repeatedly made
it clear that they are not shy about facing
companies and brands which explicitly follow
their respective business rationale. It makes
sense to plan for multi-party collaborations
involving managers and employees,
customers and consumers, experts and
candidates at the same time. A diverse mix
will not only make the collaboration more
colourful and inspiring beyond conventional
audience wisdom, it can also help to
create and amplify conversational and
reputational interplay, inside and outside of
the collaboration.
90Invitees
9inactive 1active
TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
The Future of Reputation62
Siemens Future Influencers
Future Influencers is an online
community initiated by Siemens as
a global and exclusive think tank
with more than 180 international
young thought leaders – and it is still
growing. Everyone taking part must
demonstrate an expertise and passion
for sustainability subjects and possess a
strong “digital presence”.
In several collaborations per year, the
Future Influencers pitch ideas, discuss
them and evaluate the most promising
concepts. The creators of the best
ideas are invited to appear at, and
participate in, major global events
connected with Siemens, like the World
Climate Summits.
Project partners include the World
Resource Institute and the Harvard
Business Review. MSL Germany and
Publicis Munich are supporting Siemens
in managing collaborations and building
the community.
Return on Collaboration:
shared value + share
value
An authoritative set of Global KPIs for
collaborative stakeholder communications is
not yet available due to the early evolutionary
stage of the shared value paradigm.
Projects like Siemens Future Influencers
have produced some first insights on
the benefits for companies and brands
investing in long-term collaboration
platforms and programs.
Siemens Future Influencers Community
futureinfluencers.com
63
Learning from the Future Influencers initiative
Companies and brands can gain access
to “real” conversations not tainted or
distorted by push communications
and wishful thinking. They can gain
valuable insights and ideas not available
otherwise from more superficial forms of
interaction and dialogue.
Listen and learn.
Co-produce content. Share and enlarge visibility. Conversational conversion rate.
Connect and attract.
Gain access to top talent and
future decision-makers.
Debates, ideas, concepts, research,
positions, publications etc. – whether as
direct community output or as a result of
a larger cooperation, well-planned and
thoroughly managed collaborations lead
to relevant, interesting data, stories and
intelligence. The co-produced content is an
excellent addition to corporate and brand
communications and content marketing.
Collaborations are about talking to each
other and, most of all, about working
together to co-produce results. The
higher the number of collaborators
involved in this kind of conversational
community building, the higher the
brand attraction.
Any high-quality collaboration is a
vehicle and booster to spread the news
on the brand’s thought-leading and
conversation-leading competence and
contributions. The traceable multiplier
effect created by the collaborators
indicates the collaboration’s relevance
and attractiveness.
The combination of all other effects
will lend to an enhanced reputation,
create an increased interest from target
audiences and, eventually, more leads
and demand.
As a sustained working relationship is
more reliable than mere “followship,”
the engagement created with present or
future high potentials, influencers, opinion-
leaders and decision-makers (internally
or externally) also leads to a competitive
advantage in brand reach and clout.
TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
Reputation Management: From
Risk Mitigation to Competitive
Advantage
From Ignition to Recovery:
The Components of Today’s Crises Nidhi Makhija,
Senior Manager – Insights,
MSLGROUP
The Evolving Role of the Board
in Reputation Management Brad Wilks,
MD, Midwest, North America,
MSLGROUP
How to Manage Your Reputation
in the Social Age
Tap into Big Data: The Transcript
of your Reputation
Merrill Freund,
MD, San Francisco,
MSLGROUP
Frederike den Ottelander,
Head of Digital  Social,
Netherlands,
MSLGROUP
VOLUME 3, ISSUE 1
Nidhi Makhija
Senior Manager - Insights,
MSLGROUP
From Ignition to Recovery:
The Components of Today’s Reputation Crises
66 The Future of Reputation
In our hyper-connected globalized world,
we are seeing that reputation crises have the
potential to grow faster, spread wider and hit
harder than any time before. There are two
simple reasons for this:
1)	 People are well-connected on social
platforms, and actively share information
and opinions with their networks in
real-time. It’s easier for people to organize
themselves and apply pressure to both
regulators and companies.
2)	Companies are larger and widely extended,
with suppliers, employees and customers
spread out across culturally diverse
regions. As a result, both products and
news extend over a wider geography at a
faster pace.
An analysis of recent corporate and
brand crises - events that were buzzing
in international news sites and social
conversations in the last two years – provides
us with a broad idea of the issues that
stakeholders care most about today.
A look at recent brand crises reveals that people care most about
67REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
FAULTY PRODUCTS
MISCONDUCT
LEADERSHIP
DATA SECURITY
COMPANY’S CONDUCT ECONOMY ENVIRONMENT HUMAN RIGHTS
TAX AVOIDANCE
LOW WAGES/
UNPAID SALARIES
MAN-MADE
DISASTERS
EXPLOITATION
DISCRIMINATION
HIRING BIAS
A company’s
conduct and
its impact on
the economy,
environment
and human
rights.
68
The majority of crises fall into this category,
as several brands struggled to deliver on their
basic offer (e.g. the horse-meat scandal that
affected food manufacturers in Europe), and
as several companies, leaders or employees
misbehaved (e.g. Lululemon CEO’s
comments after the see-through yoga
pants scandal).
Today, people are holding brands to deliver
on the product offer (as we saw in China,
when a celebrity blogger smashed a defective
Siemens fridge), and they are expanding
their expectations to include data security
(as catalyzed both by the NSA-snooping
scandal and the Target security breach which
compromised payment details of 40 million
customers in the US).
People also expect more out of corporate
leaders, and are not shy of punishing the
organization for its leaders’ actions or
The Future of Reputation
Company’s Conduct: Before and After Crises1
comments (as in the case of Barilla CEO,
whose anti-gay remarks on a local Italian
radio sparked a global boycott).
Regulators are becoming more demanding
as well, especially in the financial services
sector, and are raising the severity of fines to
match the scale of misconduct (as auditing
firms such as PwC and Deloitte are finding
in the UK, and banks such as JP Morgan and
Bank of America are finding in the US).
69
Company’s conduct
Armstrong doping
scandal
Cyclist Lance
Armstrong’s doping
confession led to a drop
in support for his
charity Livestrong and
an end to it’s
partnership with Nike
See-through pants
Lululemon’s black
yoga pants were
recalled for being too
‘sheer’ and its CEO
was ousted for later
pushing the blame on
‘unfit’ customers
Security breach
Target’s data security
was breached by hackers
over 19 days; credit and
debit card information of
40 million US
customers were stolen
Loan modification delays
Bank of America’s home
loan modification delays
came under the
regulatory scanner as
customers and employees
alleged that the delays
were intentional
Jimmy Savile sexual abuse scandal
BBC’s decision to shelve a report about
their late employee’s criminal past led to
the organization’s ‘worst crisis in 50 years’
and resignation of its Director General
Horse-meat scandal
Traces of horse-meat
appeared in beef products
in the UK, France and
Sweden, enraging the
public and regulators
Anti-gay comment
Barilla chairman’s comment
that he would never feature a
same-sex couple in his ads
sparked a boycott and backlash
in several countries
Defective fridges
Siemens’ inaction to
address complaints
inspired a Chinese
internet-celebrity to
smash a fridge outside the
company’s HQ in Beijing
Astroturfing
Samsung was fined by
regulators for posting
fake reviews and
comments against
competitors
Cruise mishaps
Carnival’s safety record took a
hit as the Costa Concordia
sank, killing 32, and Carnival
Triumph suffered from an
engine failure the next year
Auditing failures
PwC and the Big 4 face
increasing pressure and
larger penalties from UK
regulators for their
broader role in the
financial crises
London Whale
A single JP Morgan trader
lost more than $6.2 billion
on derivative trades,
reigniting regulators’
concerns about the banking
industry's practices and
risk appetite
FAULTY PRODUCTS MISCONDUCT
LEADERSHIP DATA SECURITY
REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
Increasingly, people are paying
attention to a company’s contribution
to state coffers and its strain on public
services. Companies, especially in
the US and UK, are coming under the
public and legal scanner for avoiding
corporate taxes (as Google, Amazon
and Starbucks saw in the UK) or for
having too many employees dependent
on tax-funded welfare programs (as is
the case with Walmart and McDonald’s
in the US).
People are becoming more and more
aware of the larger picture – they are
looking past organizational structures
and holding profitable parties at the
top responsible for the losses at the
bottom. This was well-illustrated
in the case of Kingfisher Airlines in
India, whose wealthy promoters have
been heavily criticized for delays in
employee salaries.
Four years after the BP oil spill and
three years after the Fukushima
nuclear reactor meltdown, people
seem determined to avoid similar
man-made disasters. Oil companies
are facing heat from activist groups
and regulators in new drilling projects
(as in the case of Shell, which has
had to shelve its 2014 arctic drilling
plans). Nuclear energy companies
are facing similar resistance following
the Tokyo Electric Power Company’s
inadequacies in preventing and
alleviating the Fukushima disaster.
70 The Future of Reputation
Impact on the Economy: Seeking Sustainable Growth2
Impact on the Environment: Prevention before Cure3
Economy and Environment
TAX AVOIDANCE
LOW WAGES /
UNPAID SALARIES
MAN-MADE
DISASTERS
Welfare queens
Walmart and McDonald’s
employees rely heavily
on taxpayer funded
welfare programs,
fuelling the debate
around minimum wages
Tax avoidance
Google, Starbucks, Amazon
faced public and regulator
outrage in the UK over
low-to-zero tax payments in
the past decade Unpaid salaries
Kingfisher Airlines failed to pay
employees for months before going
bankrupt, angering public and
regulators and hurting the
reputation of its successful parent
company and millionaire owner
Nuclear hazards
TEPCO, the operator of
the Fukushima nuclear
plant, was criticized for a
lack of safety precautions
and the way it handled
the meltdown, escalating
global concerns around
nuclear energy
Arctic drilling
Shell and Gazprom’s drilling programs
have been targeted by Greenpeace
activists, who are concerned that weather
conditions would make any disaster
response efforts impossible
71REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
A large number of brand crises revolve around human rights,
as people continue to fight gender inequality and demand
equal rights for the gay community and for workers of different
socioeconomic backgrounds.
The fight for gay-rights is a global one, with tremors felt at the Barilla
headquarters in Italy, at the Supreme Court in India, and at Sochi 2014.
People are sensitive about gay rights and it is common for activists
to publicly shame companies that fund anti-gay organizations (as in
the case of US fast food chain Chick-fil-a, which witnessed national
boycotts and appreciation-days as ideologies clashed).
Exploitation of low wage workers has recently emerged as a global
issue as well. People are unwilling to be a part of a system based
on exploitation, and are demanding brands be accountable for all
workers: including those across the supply chain and temporary
workers. Companies that have been publicly shamed include the
fashion industry for allowing unsafe working conditions in factories in
Bangladesh, Amazon for demanding too much out of its warehouse
workers, and FIFA for doing little to safeguard labour rights in Qatar.
There’s heat at the opposite end of the spectrum as well, with US
regulators clamping down on companies that hire people from
wealthy backgrounds in exchange for new business contracts
(as in the case of JP Morgan which is under investigation for
hiring ‘Chinese princelings’).
72 The Future of Reputation
Impact on Human Rights: Equality for All4
Human Rights
EXPLOITATION
DISCRIMINATION
HIRING BIAS
Chinese princelings
JP Morgan’s practice of hiring
sons and daughters of elite
Chinese in return for business
contracts led to legal troubles
in the US
Hiring based on looks
Abercrombie  Fitch’s biased hiring
practices came under scanner as
activists argued that sales staff are not
models and should not be
discriminated against for their looks
Exploitation of migrant workers
Qatar 2022 and FIFA are facing
pressure from international human
rights bodies to improve treatment of
migrant workers and to address the
steep number of casualties
Exploitation of low-wage workers
Global fashion brands were
targeted by activists after a
clothing factory collapsed in
Bangladesh. Many European
brands were quick to sign a legally
binding safety accord, while
American brands refused and
faced much negative news
coverage. Brands such as Mango
were also criticized for inadequate
compensation to victims’ families
Scam ads
Ford was embroiled in
controversy when its ad agency
released unapproved and
distasteful scam ads that
depicted women tied up in the
boot of the Ford Figo
‘Slave camps’
Amazon warehouses were
likened to slave camps as
journalists criticized the physical
demands and excessive
performance targets placed on
warehouse workers
Same-sex marriage
controversy
Chick-fil-a’s donations to
anti-LGBT rights political
organizations led to a public
debacle; with Chick-fil-a
boycotts clashing against
Chick-fil-a appreciation days
Lack of diversity
Twitter became the poster
boy of the lack of diversity
in Silicon Valley when it
revealed, in its pre-IPO
filings, that it had an
all-white all-male board
73REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
WHAT BOFA
DID
PEOPLE’S
RESPONSE
IMPACT
Crisis Catalysts: Three things to watch out for
In addition to the issues themselves, corporates and brands should also be prepared for three trends that can fuel crises:
steady stream of negative stories on social media and calls to
rally against the bank.
The impact? American Banker’s 2013 Survey of Bank Reputations
shows that Bank of America scored lowest amongst customers
and ‘even worse’ among non-customers.
Bank of America’s reputation took a hit during the financial crisis
of 2007-08 and continues to stay low because of the company’s
non-empathetic response and the profit-first attitude it
continues to portray.
In the last few years, angry Bank of America’s customers and
employees reacted to delays and new ‘unjust’ policies with a
74 The Future of Reputation
Power of Individuals: the Bank of America case1
Unjustified Interest Hikes to 30% -
even for customers in good standing
Customers shared stories on
YouTube, and one woman called for
a Debtor’s Revolt
Media picked up these stories
BofA resolved individual cases, thus
inspiring others to follow suit
Why Bank of America Fired Me
video received over 560,000 views
BofA ranks poorest in customer
service studies (ASCI, MSN)
Credit Unions received 
1 million additional new
customers and over $4.5 billion 
in funds in 2011-12
Employees  customers shared
stories and created a “Banking Bad”
mockumentary on YouTube
One customer created a Facebook
event that sparked a national
Bank Transfer Day movement
Intentional delays in modifying
loans – leading to preventable
foreclosures  demoralized staff
First to introduce a $5 
Debit Card Fee – to preserve
high profits
In April 2013, the global fashion industry was accused of labour exploitation after the collapse of
the Rana factory in Bangladesh killed a thousand workers and injured two thousand more.
Activists and the media quickly revealed the brands whose apparel was manufactured at the
factory and mobilized people to petition the brands involved to sign The Accord on Fire and
Building Safety in Bangladesh – a five year legally binding agreement to fund and uphold
minimum safety standards in the Bangladesh textile industry.
Less than a month after the collapse, 90,000 people signed the petition, pressuring 42 brands
to sign the agreement. Today, over 100 brands have signed the accord, and 26 additional brands
have created their own independent five-year safety plan.
As the one year anniversary looms ahead, activists and the media are pressuring the industry to
contribute to a $40 million compensation fund for victims.
In January 2013, horse DNA was found in frozen beef products in a British supermarket and
triggered a ‘major breakdown in the traceability of the food supply chain.’
Adulterated meat was found in 13 EU countries and millions of pounds of food was recalled
across Europe. Several hundred companies had received adulterated supplies of meat which
was later traced to slaughterhouses in Romania and Poland. Further tests detected traces of the
veterinary drug phenylbutazone, sparking fears for human safety.
Consumer-facing brands like Tesco and Findus suffered large drops in sales and changed
suppliers. Frozen meat products as a category witnessed a decline, and people in the UK are
opting instead for fresh traceable food and shopping at local butchers and farmer’s markets.
75
Speed of Activism: Bangladesh Safety Accord2
Challenges of Scale: Horse-meat scandal in Europe3
REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
Recovering from crisis: Leading the Conversation
In times of crisis, people expect corporates and brands to step up and lead the conversation. Tired of denials, people want companies to
acknowledge their mistakes, implement quick solutions, and prevent similar events from occurring again.
Power of a Strong Offense: Target
While Target could have done more to
prevent the data breach in late 2013, the
company has staged a strong offense to
restore customer trust.
The company was a victim of a 19 day
security breach in which credit and
debit card information of 40 million
customers and personal information of
70 million customers was stolen.
A day after the breach was announced, the
company released an acknowledgement
and has since been working with federal
investigators, investing in cybersecurity
education and offering customers free credit
monitoring and identity theft protection.
In addition, Target is speeding up its plans
to introduce chip-enabled technology in
stores to boost security. A section of its
website is dedicated to explaining the
event to customers.
Power of a Clear Positioning: PwC
PwC’s reputation with UK regulators took a
dip in 2011, when a House of Lords criticized
the auditor for its role in the financial crisis.
The firm responded by acknowledging the
lack of trust in the industry, appointing a head
of reputation strategy and positioning itself as
a part of the conversation - and the solution.
Already a strong content creator and thought
leader, PwC is using these strengths to
position itself as leader in addressing the
lack of trust plaguing its own industry
and its clients.
76 The Future of Reputation
Power of Cultural Leadership: GE
A decade ago, GE was known as a leading
polluter. The company has since transformed
itself to a leading clean technology provider.
Since 2005, GE has committed large
investments to building ecomagination and
Healthymagination – ranges of sustainable
eco products and affordable health products.
GE also launched open innovation challenges
and entrepreneurship programs to support
innovation internally and externally. The
company engages people around these
programs with short visual content packets,
optimized for quick consumption on social
networks. GE has an audience of 1 million
on Facebook.
Strong leadership, open innovation,
philanthropy efforts and participatory
programs have boosted GE to one of today’s
leading global brands.
77REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
Components of a Reputation
Recovered
When it comes to crisis, it’s not a question of
just ‘if’ and ‘when,’ but also ‘how.’ How will you
diminish the chances of a reputation crisis?
How will you respond when one hits?
From the many cases mentioned above,
it’s clear that strengthening and recovering
reputation is about…
•	 Changing the system – doing the right
thing, standing for a purpose,
from the start.
•	 Realizing that everything is connected –
and that people already know it.
•	 Being empathetic – people are not
numbers, they’re individuals.
•	 Being mindful – some people may not be
influencers today, but they very well
could be tomorrow.
It’s also about being realistic and knowing when to give in to people’s demands.
As Ellen DeGeneres poignantly observed at the Oscars:
Tonight, there are so many different
possibilities. Possibility number one:
12 Years a Slave wins Best Picture.
Possibility number two:
You’re all racists!
78 The Future of Reputation
How to Manage your Reputation
in the Social Age
Establishing a great reputation used to be a
slow moving exercise – it was more akin to the
turtle than the hare. Sure, there have always
been extreme instances in which respected
brands have taken major hits from huge crises
– think the Tylenol scare of the 1980s – but by
and large it has been possible to control and
sustain reputations if a company had a great
product and a consistent and compelling
branding and communications strategy.
Merrill Freund
MD, San Francisco,
MSLGROUP
79REPUTATION MANAGEMENT | How to Manage Your Reputation in the Social Age
80 The Future of Reputation
In the era of social media, short attention
spans and one click hops, this isn’t the case
anymore. With 500 channels, thousands of
blogs and billions of Tweets, how important
do the New York Times, CNN or Advertising
Age remain for maintaining a pristine
image? For example, a few years ago,
Internet and cable TV provider Comcast
received notoriety and fame when service
problems on its network were the subject
of on-going attacks on Twitter after which
they developed a rapid response to address
these damaging tweets.
Companies are adopting influencer
programs to drive greater user integration
into communications programs. While not
overtly co-opting users, it demonstrates
the new focus on “Dave the Geek from
Orlando” rather than David Pogue as
the taste masters driving the brand and
reputation.
1)	 Don’t throw out the baby (let alone
the bathtub) with the bathwater
Unless 2 million readers a day mean
nothing, The New York Times is going
nowhere (even if they are giving away
millions of dollars a year due to a lack of a
cohesive online monetization strategy)
and what they publish still matters.
Ignore them at your peril.
2) 	But it’s not just a game of
volume – focus counts.
A review of an online coupon site on the
Huffington Post is great but a mention in
a mommy blog with only thousands of
subscribers can be even better since they
are all socially vocal.
81
3) 	Whether Verizon wants to hear
this or not, churn is inevitable in
almost every industry.
Losing a customer happens in less time
than it takes to read this sentence. It’s the
price you pay in an online world – your
competitor is only one click away so any
micro-change to your brand, reputation
or experience and a loyal customer
could be gone. Learn to take this in stride
and better anticipate your customers’
expectations and reactions.
5 Rules to Managing your Reputation in the Social Age
So given this new state of conventional wisdom, what rules should you apply to maintain,
improve or change your reputation or brand? Here are five to consider.
REPUTATION MANAGEMENT | How to Manage Your Reputation in the Social Age
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine
The Future of Reputation - People's Insights Magazine

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The Future of Reputation - People's Insights Magazine

  • 2. People’s Insights – the voice of SPRINT People’s Insights is a collection of inspiring initiatives, insights and foresights shared by MSLGROUP’s SPRINTers – our global team of 85+ strategic planners, researchers and insights experts. We feature the best of these initiatives as People’s Insights monthly briefs, and original insights and foresights – from our SPRINTers and other MSLGROUP experts - in our People’s Insights magazines. We share these reports on our social platforms and distribute them freely to inspire more engaging campaigns. People’s Insights covers the latest trends in engagement on both the consumer and corporate side: • For the latest in consumer engagement, read our ten-part annual report, The Future of Engagement or our magazine The Future of Money. • For the latest in corporate engagement, read our magazine The Future of Employee (Re)Engagement and watch out for our upcoming magazine The Future of Citizenship. People’s Insights is available as a blog, a series of easy-to-read powerpoint decks and infographics, white papers and magazines, a Kindle eBook and even an iPad app. People’s Insights monthly briefs NowNext iPad app People’s Insights quarterly magazines Big ideas that are rooted in strong insights and foresights have never been as important, and conversations and communities have become the most important sources of insights. Follow us on Twitter at @PeoplesLab or subscribe to our newsletter to receive our monthly briefs and quarterly magazines.
  • 3. The Evolving Role of the Board in Reputation Management Brad Wilks, MD, Midwest, North America, MSLGROUP France: Social Performance Comes First Fabrice Fries, President, France, MSLGROUP China: Facing the Challenges of a Low-Trust Society Par Uhlin, MD, MSLGROUP in Hong Kong and Vice Chair, MSLGROUP China India: The Awakening Jaideep Shergill, CEO, India, MSLGROUP Poland: Invaluable Reputation - Protects, Motivates, Sells! Katarzyna Stamatel, Head of Law Consulting, Poland, MSLGROUP Reputation Journey: The Now The Next Reputation Management: From Risk Mitigation To Competitive Advantage Perspectives: Reputation Around The Globe The Reputation Complex: Seeking Sustainability in a Liquid World Pascal Beucler, SVP Chief Strategy Officer, MSLGROUP Reputation and Corporate Image Today Paulo Andreoli, Chairman, Latin America, MSLGROUP Your Corporate Brand Reputation is Now in the Hands of Millennials Scott Beaudoin, Global Practice Director, Corporate Brand Citizenship, MSLGROUP The Future of Reputation is about Building from the Inside Out Jason Frank and Brian Burgess, Global Co-leaders, Employee Practice, MSLGROUP Reputation Building by Influencer Collaboration Martin Dohmen, Germany Director, Corporate Brand Citizenship/ PurPle, and Chief Strategy Officer, MSL Germany The Reputation Journey: What we can learn from the financial services crisis Olivier Fleurot, CEO, MSLGROUP From Ignition to Recovery: The Components of Today’s Crises Nidhi Makhija, Senior Manager – Insights, MSLGROUP How to Manage your Reputation in the Social Age Merrill Freund, MD, San Francisco, MSLGROUP Tap into Big Data: The Transcript of your Reputation Frederike den Ottelander, Head of Digital Social, Netherlands, MSLGROUP ...66...12 ...79 ...20 ...83 ...33 ...88 ...98 ...42 ...104 ...112 ...49 ...118...56 Today’s Stakeholders: Demanding, But Open To Collaboration
  • 4. FOREWORD CEO, MSLGROUP Olivier Fleurot 4 The Future of Reputation
  • 5. Trust and reputation were underlying themes at the World Economic Forum held in Davos earlier this year. From the many sessions and conversations, two trends were clear. First, the trust crisis is still top of mind for many international executives and leaders. There was a general consensus that organizations still need to restore trust and actively manage their reputations. Second, good reputation is considered good for business and for smoother relations with all stakeholders. There were many discussions around the positive role that business can play in society and leaders seemed more willing to embrace sustainable growth and corporate citizenship. For corporates and brands, there is a strong need to protect reputations and mitigate risk and to leverage strong reputations for competitive advantage. As trusted advisors to our clients, we are dedicated to helping you do both. In this magazine, experts within MSLGROUP dissect reputation to understand: » What’s new, what’s same, what’s different, what’s coming? Why does it matter to our Corporate and Consumer clients? » How does Reputation resonate with Values, Purpose, Corporate Citizenship and Talent Engagement? » What should we know about the Generation Gap, the new dynamics created by the highly demanding GenY and soon GenZ? » How has the digital and social revolution changed the game? » From a North-American, Latin-American, European, Chinese, Indian perspective, what are the key components of a reputation in the Conversation Age? I hope that you will enjoy reading this report and find that it simplifies the complex world of Reputation. 5The Future of Reputation | Foreword
  • 6. EXECUTIVE SUMMARY 6 The Future of Reputation SVP Chief Strategy Officer, MSLGROUP Pascal Beucler
  • 7. 7The Future of Reputation | Executive Summary People across the world are realizing the power of social networks, valuing social performance ahead of financial performance and demanding corporates and brands contribute to local communities. Reputation: The Now the Next A lot has changed in recent years. In particular, three shifts have boosted reputation to the #1 Strategic Risk today, as was found in a recent Forbes-Deloitte study. 1. Shift in stakeholders - From Powerless to Empowered 2. Shift in corporate ethics - From Social Responsibility to Citizenship and Sustainability 3. Shift in purchase decisions - From buying the Product to buying the Purpose More and more, we are seeing these trends emerge across markets. People across the world are realizing the power of social networks, valuing social performance ahead of financial performance and demanding corporates and brands contribute to local communities. As a result clients across the globe are embracing communications to manage reputational issues. In this issue of the People’s Insights magazine, our experts explore the concept of reputation to understand what it is composed of, who is driving it, and how brands can excel at building strong reputations for the long term.
  • 8. 8 Already organizations are engaging with millennial customers, regulators, shareholders, employees and external influencers. Not only is this generation personally driven to be better citizens and make a difference, it expects businesses to do more to address society’s challenges. The Future of Reputation Today’s Stakeholders are demanding, but open to collaboration In the past, companies catered primarily to customers, regulators and shareholders, not necessarily in that order. Today, thanks to the social digital revolution, new stakeholders have emerged: » Millennials born between the 1980s and 2000s, this generation extends across all stakeholder groups. Already organizations are engaging with millennial customers, regulators, shareholders, employees and external influencers. Not only is the generation personally driven to be better citizens and make a difference, it expects businesses to do more to address society’s challenges » Employees past, current and future employees are empowered by personal and professional social networks. Through their actions in both the real and virtual world, they can have a direct impact on customer loyalty and corporate reputation. » External influencers external subject matter experts are passionate about shaping the future and willing to co-create it. They exert influence within their own networks of like-minded peers or occasionally through traditional media.
  • 9. 9The Future of Reputation | Executive Summary Reputation Management: From Risk Mitigation to Competitive Advantage These stakeholders represent a huge untapped potential to be really authentic and powerful advocates and influencers. To engage them, companies must: » Do the Right Thing – with ethical and sustainable development plans » (Re)engage with employees tap into their Social IQ – to harness authentic and powerful voices » Co-create the company’s offer and strategy with influencers – to boost innovation and add credibility to a brand’s promise of sustainable development » Engage around a shared purpose – that aligns the interests of business and stakeholders In addition, corporates and brands can leverage the latest social and digital tools to: » Monitor what people are saying with Big Data Social conversations and data can be analyzed to track the rise of negative comments (who, what, where) and intercept before they become crises, understand how people really perceive your brand and measure the impact of communications in real-time. » Communicate frequently and consistently by becoming Social Squared Organizations should balance traditional and new techniques – cater to influencers with mass reaches while also tapping into new influencers and niche communities – and generate a steady stream of meaningful content. Finally, to succeed in the long term, organizations must take measures to elevate the importance of reputation internally: » Assign ownership to senior executives at the Board Level Senior buy-in is crucial to drive meaningful change across the organization and earn credibility externally. By assigning responsibility to the board or a dedicated executive or team, organizations are better geared to approach reputation as a competitive advantage. Today’s winning corporates and brands are already inspiring young talent, benefiting local communities, building a smarter tomorrow, creating shared value and committing to sustainability. Tomorrow’s reputed organizations will be purpose- led companies, good corporate citizens, employers of choice and social squared organizations. We invite you to explore these ideas over the next pages and to start a conversation with us on how you can protect and project your organization’s reputation.
  • 11. Olivier Fleurot, CEO, MSLGROUP Pascal Beucler, SVP Chief Strategy Officer, MSLGROUP Paulo Andreoli, Chairman, Latin America, MSLGROUP The Reputation Journey: What we can learn from the financial services crisis The Reputation Complex: Seeking Sustainability in a Liquid World Reputation and Corporate Image Today VOLUME 3, ISSUE 1
  • 12. If there is one industry that has seen its reputation seriously damaged in the last decade it is undoubtedly the financial services sector. Dubbed “the worst financial crisis since 1929”, the Eurozone was, as we know, severely shaken with several countries ultimately facing embarrassing bail outs from international creditors. Olivier Fleurot CEO, MSLGROUP The Future of Reputation12 The Reputation Journey: What we can learn from the financial services crisis
  • 13. Financial services seemed immune to failure How did it all start? In the late 90s the economy was booming, liquidity was abundant, and western banks were encouraging people to ‘live the American dream’ and borrow ever more money. A few bells started to ring in 2000 and 2001 when the high-tech bubble burst and the Enron scandal unravelled. But trust in the financial world was so deeply rooted that people perceived these events as nothing more than isolated instances. Riding on the people’s trust and ambitions, bankers continued to chase higher profits and to offer more sophisticated and riskier products. Hollywood and the media were quick to sensationalize the ambition, hunger and, at times, greed of Wall Street. The financial industry began to be perceived as a stairway to wealth – an industry that was thought to be immune to failure. This perception in turn attracted more and more investors and encouraged talented people to join financial firms. Yet despite this vicious circle, a few lone voices, mostly academics and analysts, began to warn that such growth and expansion was simply not sustainable. What finally made the bubble burst? In reality it’s impossible to trace the cause of the crisis to any single event: experts often cite deregulation, the rapid pace of innovation, lack of global regulation and an industry-wide lack of accountability as critical factors. REPUTATION JOURNEY | What we can learn from the financial services crisis 13
  • 14. Trust vanishes: Reality goes beyond fiction in 2008 When the US housing bubble burst in 2007-08, trust in the financial world vanished. The extent of the damage and the severity of the consequences were unprecedented and astonishing. Even worse: some banks and institutions remained in denial and sought to hide the extent of potential losses. In the five years that followed, we witnessed: Bankruptcy On both sides of the Atlantic, most notably with Lehman Brothers going out of business in the US. Rebranding Some banks changed their name to start afresh (GMAC became Ally) or as a result of being acquired (Northern Rock was eventually absorbed by Virgin Money). Penalties The cost of the crisis in legal expenses and settlement costs is still being paid – one settlement reached as much as $13 billion. Customer defection Customers shared their negative experiences and organized events such as Bank Transfer Day on social networks. The Future of Reputation14
  • 15. Dramatic loss of public trust Although many perhaps couldn’t understand every single intricacy around financial instruments, publics were certain that, somehow, the financial world had betrayed them. And their distrust extended beyond the financial services industry, beyond rating agencies and regulators, to the corporate world as a whole. Employee frustration Dissatisfied employees too turned to social networks, especially YouTube, and news sites to share their stories. Citizen activism In 2011, young Spaniards launched the “Indignados” movement, soon followed by the global Occupy movement – groups founded to enable the free and broad expression of people’s outrage at the economic crisis and anger towards national governments. Nationalization, Bailouts and Forced Mergers Central banks in the US and Europe injected hundreds of billions into the system. They nationalized and bailed out institutions and orchestrated mergers to keep weak players afloat. Governments in Asia too announced large stimulus packages to offer some stability to the system. 15REPUTATION JOURNEY | What we can learn from the financial services crisis
  • 16. The Future of Reputation16 Rebuilding reputation will take time While trust in the financial industry has improved since 2008, it remains lower than in other industries and continues to fluctuate, in response to post-crisis evidence of misbehaviour and the emergence of new scandals (such as the manipulation of interest rates). The debate around executive pay and bonuses still rumbles on in many countries, especially in markets where taxpayer’s money was used to bail out financial companies. As we know, it can take years, at times decades, for a company to build a good reputation, and only a few days to destroy it. The challenge of restoring trust and good faith is made more complicated by the challenge of communicating in the information age. People expect companies to engage in two-way dialog in real-time and be consistent across geographies. Beyond this, people demand that companies look out for all stakeholders and respect the larger ecosystem in which they operate. Becoming a genuine partner for entrepreneurs Some banks launched efforts – both short and long term – to support local businesses and entrepreneurs. Over the last few years, banks have delivered on these expectations with initiatives that combine Purpose, Participation, Performance and Sustainability. This meant… Innovation Challenges Citipartneredwith NBC’sEducation Nation’sInnovation Challengetofundentrepreneursin theeducationspace. Support Communities AmericanExpresslaunched theonlinecommunityOPENForum,which offersawealthofbusinessadviceandconnects smallbusinesscustomers. Australia’sBendigoBank launchedthePlanBig platformtohelp entrepreneursachieve theirgoals. Change Movements Crowdsourcing Campaigns AmericanExpress kickstarted theSmallBusiness Saturdaymovement, toencourageAmericans, andrecentlytheBritish,toshopatsmall storesduringtheholidayseason. KBCBanklaunched TheGapintheMarket tocrowdsourcebusiness opportunitiesacrossBelgium.
  • 17. 17 Giving people a bigger say in citizenship programs Some banks invited people to decide which organizations, charities and even national monuments would receive the largest share of funding. Re-defining banking together A number of banks engaged customers and students in conversations and initiatives to build a better system. REPUTATION JOURNEY | What we can learn from the financial services crisis AmericanExpresslaunched Member’sProjecttolet customersmakeadifference throughvotes,volunteerhoursor donationoftheirAmEx member’spoints. ChaselaunchedChase CommunityGivingtolet peopledecidewhichcharities wouldgetthebiggestshareof grantmoney. Barclaysintroduceda new“co-created” creditcard, BarclaycardRing,to givethecommunitya sayinthecard’sfees, policiesandrewards. INGlaunchedNextGeneration Bankingtochallengethe ‘bankersoftomorrow’to envisionthefutureofbanking. EvenformerRBSchiefStephen HesterengagedstudentsatLSE inacandiddiscussionabout RebuildingBanking.
  • 18. Video: World Economic Forum 2014: Pierre Goad The Future of Reputation18 And, simply communicating better… or differently. Several banks embraced new media to encourage financial literacy and differentiate themselves from the ‘bad banks.’ In the last eighteen months, some banks have indeed begun to successfully differentiate themselves from the category and stand out. As HSBC’s co-head of global communications Pierre Goad shares, it is now a priority for these institutions to actively improve their reputation and manage reputational issues early on. Financial Literacy USBank encouraged teenagerstocreate videosaboutthevalueofsaving. Thewinningvideo-arapvideotitled “Don’tforget‘boutyadebt!” Humility AIGusedvideoinfographicsto communicateits“TurnaroundStory” andannouncethatithadrepaidits bailoutinfull.AIGfollowedthiswith thefilm“ThankYouAmerica”- albeittomixedresponse.Solidarity DeutscheBank expressedits solidaritywith customersagainst unnecessarybankfeeswitha tongue-in-cheekvideo“Youwouldn’t acceptitfromyoursupermarket.”
  • 19. WEF 2014: Sir Richard Branson and Arianna Huffington talk about Plan B 19 A purpose-driven tomorrow Increasingly, companies are embracing concepts of sustainable growth and corporate citizenship – because they are indispensable to attracting and retaining talent and because they can also be good for business. We are also seeing leaders make the case for purpose-driven business (The Stengel 50) and partner with organizations and other corporates to reinvent the way we do business (Plan B). Indeed, this was the central theme at the recent World Economic Forum at Davos - Reshaping the World: Consequences for Society, Politics and Business. For banks, financial institutions and other companies to recover, maintain and build good reputations, we believe they must implement six actions across the organization, at all tiers and locations: 1. Establish a shared purpose Identify a core purpose that drives the organization and its people, and align programs and strategies around this shared heartbeat. 2. Co-create the future Engage customers and other stakeholders in helping defining the organization’s policies, services and corporate citizenship actions. 3. Lead the dialogue Harness social, digital and other media to lead, or at least contribute to the continual dialogue around issues that are important to customers. 4. Win over influencers Demonstrate new priorities through bold outreach to influencers, governments and media. 5. Minimize risks Anticipate and plan for issues that may still negatively impact the organization’s reputation. 6. Empower employees Amplify good news by encouraging employees to be strong ambassadors for the good work the organization is doing. These actions are not easy and transformation will not happen overnight. But over the long term, they will help safeguard a company’s reputation and re-gain the loyalty of stakeholders. As Warren Buffett said, “If you lose money for the company, I’ll be understanding. If you lose a shred of the company’s reputation, I’ll be ruthless.” REPUTATION JOURNEY | What we can learn from the financial services crisis
  • 20. Pascal Beucler Here are some tricky questions our clients are dealing with today, particularly at the C-Suite level: What is the link between Business and Reputation today? What is the value of Corporate Reputation (the one of the firm, not just of its brands, services products), whether in a B2C or B2B context? Why and how is the Digital Social turmoil changing the whole game? Why should we address reputational issues versus all stakeholders, not just shareholders but also customers of course, employees and partners, people and communities? Why is investing in Corporate Citizenship critical today, from a Reputation Management standpoint? Is a silent firm always defined by others? Why are silence or secrecy not sustainable options anymore? SVP Chief Strategy Officer, MSLGROUP The Future of Reputation20 The Reputation Complex: Seeking Sustainability in a Liquid World
  • 21. 21 The following analysis examines why reputation management is such a challenge in a world where transparency is mandatory, social engagement is required, corporate citizenship is highly expected and content is king. Corporate Reputation is what supports Corporate Equity Basically, that’s what we mean with the concept of “Reputation Complex” and the way we define it: The “Reputation Complex” is a moving combination of various reputational factors, components and drivers that are linked in a close and complicated way. This combination brings with it, for all organizations, equal risks and opportunities – the first to be managed and the second to be exploited in the right manner. From this standpoint, Reputation Management is probably today the most demanding of our Global PR Practices, at the intersection of Corporate Brand Citizenship, Financial Communications, Public Affairs, Digital Social and the Employee Practice. As a matter of fact, Corporate Reputation protects a company’s equity, plays a growing role in investors’ eye, and strengthens customer’s confidence in a firm’s products and services. In fact, checking who’s behind the brand/the product/the service – who owns it? – is a fast-growing trend. Corporate Reputation also nurtures key opinion leaders’ appreciation, attracts the best partners and helps recruit and retain the best talents. In a nutshell, Corporate Reputation is cornerstone for all businesses. And, let’s make this clear: Reputation is not fame, admiration, image or esteem – all of these can generate a positive halo, but none of them is a founding factor. Let’s not mistake the effect for the cause. Last, contemporary Corporate Reputation is not based only on cold analysis, rationale and reason; it’s also linked to emotional attributes, perceptions and empathy, all of which are key drivers a genuine societal commitment can help create. REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World VOLUME 3, ISSUE 1
  • 22. The Future of Reputation22 A fast-changing ecosystem Key attributes such as long-term investment value, quality of products and services, and financial soundness have been utilized year after year by various rating systems asking professional panels to evaluate firms on X-point scales. That’s for sure essential, but such classical, endogamic and “coefficient centric” approaches do not suffice anymore in a world where ethics as well as the nature and the level of engagement with people and communities are cornerstone. Corporate Reputation needs to be seen through a different lens, with a much wider focus and mind-set. Who doesn’t see the terrible consequences of the various scandals and crises the past decade produced, starting with the Enron earthquake and continuing today with the 2008-10 Wall Street “Big One” and post crisis tremors? Each and every survey in the L’air du temps: seen in a restaurant in Berlin, January 23rd, 2014 past decade has described a very unfriendly, suspicious, negative environment, with unprecedented levels of public distrust and anger. Trust in all institutions, including corporations and governments, remains at an all-time low across the world, and this is worrying. And it’s no surprise that the “Financial Planet” continues to suffer from the poorest reputation of all business sectors.
  • 23. The age of low predictability Liable to change rapidly, a Corporate Reputation is a composite of diverse and highly volatile perceptions and emissions – most of which being hard to manage: Few years ago, Reputation was a somewhat elusive intangible asset, in the hands of a small number of selected gatekeepers. Today, with the explosion of social media, reputation can be enhanced or damaged in the blink of an eye. Most corporations are in the risk zone, where a low level of public trust meets a high level of people’s empowerment. And this is exactly why every Reputation issue is potentially Global, Social, Viral. 23 It’s mostly out of control of all the communications about an organization, very few are within control today. The comment is the message be it employees or external stakeholders, people are generating far more content about an organization than can be created by the organization itself. We may like it or not, but it’s just what it is some of the messages are positive, some of them are negative, but together, it all reflects a firm’s or a brand’s reputation. VOLUME 3, ISSUE 1 REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
  • 24. Reputation as the #1 Risk in 2013 Changing perspectives is always a little slow, naturally, but the latest “Exploring Strategic Risk” joint study by Deloitte Forbes Insights shows an impressive evolution over the past three years, with Reputation rising to become the #1 Risk in 2013: The “Exploring Strategic Risk” global survey included more than 300 respondents from the Americas, EMEA, and Asia-Pacific. Nearly all respondents were C-level executives (263), board members (22) or other risk executives (21). Surveyed companies came from all five major industry sectors (consumer/industrial products, life sciences/health care, technology/media/ telecommunications, energy and financial services), and all had annual revenues in excess of US$1 billion (or the equivalent). Three years ago, reputation was already the top risk area in financial services – and remains so today. Now, reputation is rated as the highest impact risk area – not just overall, but for most individual sectors as well. The Future of Reputation24 Why all of a sudden? Social technologies are one of the main factors driving rising concerns about reputation. Given the speed and global reach of social media, companies today are losing control over how they are perceived in the marketplace. “One of the big changes in recent years is speed to market.” “As a consequence of social media, reputations built up over decades can be challenged in an instant. Customers are able to make decisions on an organization based on social media comment, potentially well before your ability to be able to defend or articulate a response.” - ANZ’s Jennifer Evans (Banking Financal Products) It takes 20 years to build a reputation anD five minutesto ruin it. If you think aboutthat you’ll do things differently. Warren Buffett Q. Which of the following risk areas have the most impact on your business strategy (three years ago, today, and three years from now)? 41% | Brand 28% | Economic trends 26% | Reputation 2016Today2010 29% | Economic trends 26% | Business model 24%| Reputation - Competition 40%| Reputation 32% | Business model 27% | Economic trends - Competition
  • 25. The “post-disintermediation” Age: Reputation Management in times of Social Guerrilla As the Deloitte-Forbes research clearly shows, reputation risk is now the biggest concern, due in large measure to the rise of social media. Social media enables instantaneous global interactions that make it impossible for organizations to “control” the on-going conversation about them, and the impact on their reputation. This is true everywhere and for every organization, as shown in recent examples where public authorities were targeted by citizens and forced to take action. Such viral initiatives are the “New Normal” today, and they prove to be very effective. 25 We clearly see a double move here: From Influence to Engagement: Influencing influencers silently, secretly, behind the scenes, has been the norm for decades, and it still works in specific contexts. But it’s far from enough today: in all industries and everywhere, disintermediation is rapidly, and profoundly, changing the rules of the game. Brokerage based businesses are all potentially under threat. Gatekeepers and barriers are vanishing, while people use the boundless power of social media to raise their voice and be heard by the decision-makers, be they politicians or business executives. 1 REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
  • 26. From Public Affairs to People’s Affairs: Leaders – whether politicians or business execs - are put directly under people’s heavy pressure through Twitter, Facebook or YouTube. Within days, sometimes hours, they have to cancel an initiative, abandon a controversial project or quickly act to address a pressing public demand. 2 AOL’s CEO Tim Armstrong reversed a change in policy following employee media backlash (via washingtonpost.com) Dutch Parliament intervened to ensure a subsidy was provided to the Metropole Orchestra after the popularity of the Metropole Tweetphony campaign Russian politicians fixed city potholes after a social guerrilla campaign by news site Ura.ru (Make the Politicians Work) #TweetsFromTheDeep is another great example of Social Guerrilla in the area of public affairs. What would you do to help defend UK fishermen, under permanent scrutiny for their alleged exploitation of the sea’s resources: classical media relations? It may not bring much attention from the audience you wish to engage with. An ad campaign in mainstream media? It will be a bit costly for a professional association and, again, it won’t be authentic, genuinely human-based, it will just be one point of view versus the other. Here’s what the National Federation of Fishermen’s Organization did: give a fisherman access to their Twitter account and let him tell his own story himself, from deep in the ocean, with his own words and tone of voice. Much more efficient. Brilliant! The Future of Reputation26 Video: The NFFO Fisherman David Warwick sends Tweets from the Deep
  • 27. Whether it is a “real world” crisis (catastrophe, sex scandal, oil spill) or a “flash mob” of activism generated online (Greenpeace vs. KitKat), the news curve and the crisis curve are closely linked, and Social Media is spreading the blame game at a very high speed. The Bank of America case is a very insightful one, as Nidhi Makhija demonstrates in this report (see Page 74). From low intensity controversies to high intensity crises: Reputation is at stake 27 Social Media’s impact on share prices is critical too, particularly since the SEC ruled in April 2013 that companies can disclose important information on social media accounts as long as they alert investors in advance of which platforms and accounts they will use. Now, in addition to spontaneous celebrity social endorsements (Oprah’s $150mn tweet), companies’ executives’ social media posts are impacting stock price and movement. For instance, Netflix CEO’s Facebook post sparked a 13% rally in Netflix shares, sparked an SEC investigation and resulted in a new regulation allowing companies to make announcements through social media. A hacker’s tweet from the AP account, that ‘President Obama was injured in a White House explosion,’ erased $200 billion from US stock market for six minutes in April 2013. Analysts blame algorithm trading systems that scan news and social conversations for the temporary drop. Oprah’s spontaneous tweet instagram generated and boosted Groupe SEB’s market capitalization by 1 mn tweets- $150 m 27 VOLUME 3, ISSUE 1 REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
  • 28. The Reputation Complex: articulating Content Engagement, to hit the sweet spot Building and managing a reputation today is firstly building and managing a content strategy, then rightly engaging around it with all relevant audiences. • What do you stand for as a firm? What’s your purpose? • Does your Corporate Governance meet today’s societal expectations: ethics, quality of leadership, social responsibility and diversity? • Is your business performance sustainable? • What’s the social impact of your business on people, communities and society at large? • What does your Corporate Citizenship consist of? • Are you an Employer of Choice? CONTENT ENGAGEMENT Content is King, and it all starts by defining and expressing the fundamentals of every organization’s core strategy: It’s then about rightly engaging with all stakeholders: The Future of Reputation28 • How can Communications better shape share the story about the firm’s history, legacy and strategy – both internally and externally? • Beyond the Investor’s Day, the priority is to craft a narrative architecture to help larger audiences understand where the company comes from and what it stands for. • Why sustainability, value creation and innovation are key pillars to its success? • How the firm, wherever it is on Earth, is committed to developing close links with people and communities? • Why building a strong Employer Value Proposition is crucial for today and tomorrow?
  • 29. Over the past few years, some companies (from IBM to PwC) which happened to be at stake did better than others, because they better managed what they wanted to focus on (content), and because the way they engaged with people was superior (relationship). The Reputation Complex is thus a system of different levels and dimensions, as well as an on-going iterative process with no beginning and no end, blending beliefs, perceptions and representations, all based on a firm’s global behaviour. Helping our clients navigate the blur and manage complexity is our main task today in the fast-changing world of PR – People Relations. Before being good or bad – and moving from one state to the other doesn’t have to take very much time – a reputation firstly is: A firm’s resistance, and potential resilience, very much depends upon these four points, when its reputation is at stake. IBM announced its ambition to create a Smarter Planet and involved people, innovators and local leaders in its mission (People for a Smarter Planet community, Smarter Cities Challenge), PwC appointed a head of reputation to mend its relationship with regulators, and is positioning itself as part of the conversation around building trust (Inspiring Trust report), Coherent, or not, with what a firm actually is about, and stands for Consistent, or not, with its core beliefs and values Solidly grounded, or not, into a well- told story Managed, or not, properly 21 3 4 29 29REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
  • 30. From Philanthropy CSR to Corporate Citizenship This was again, over-demonstrated few weeks ago at the 2014 World Economic Forum in Davos. To “reset” the world’s economy, restore some sort of public confidence in the world of business - particularly in the Financial sector, as we see it - many top leaders highlighted the fact that corporations need to speak and act as Good Corporate Citizens. Such a movement is here to stay, and it’s a growing concern for all stakeholders. As Unilever CEO Paul Polman loudly claimed in Davos: “You don’t get attacked for doing the right things!” Polman claimed that if profits were necessary, they shouldn’t be placed above purpose. He also claimed that Unilever had a “moral obligation” to help address the world’s problems: “If we don’t work in transparency, we undermine trust.” He admitted that this was not an easy transition for companies to make: “To get these values into the company is awfully hard work and takes a long time.” However, he used the example of Edward Snowden to highlight what can go wrong when companies come under attack in an environment where “individuals can put you out of business.” This is the dominant trend today. Philanthropy was the norm: giving back discretely and without necessary links between the business and the causes the firm was supporting. Citizenship is the new normal: it’s about putting the firm’s Citizenship engagement at the heart of its purpose and business strategy. The Future of Reputation30
  • 31. When the winds of change blow, some people build walls and others build windmills. - a Chinese saying 31 VOLUME 3, ISSUE 1 REPUTATION JOURNEY | The Reputation Complex: Seeking Sustainability in a Liquid World
  • 32. Purpose Led Company Reputation Complex Employer of Choice Corporate Citizen Social Squared Body At this point, in most markets and industries, it seems that the “protection” mindset is more widespread than the “projection” one. It is our mission to help our clients go for the windmill option, as projection is the key for building a sustainable Reputation in the liquid age. The windmill will create a lot of value, if corporations are genuinely purpose-led, acting as respected Corporate Citizens and being seen as proven Employers of Choice, and if they behave as well-connected and fully-engaged organizations. And by the way, let’s remember that “Purpose” and “Propose” have the same etymology: a company with a solid Reputation is thus the one which has a relevant purpose, translating into a robust value proposition for all stakeholders. 32 So, should we build walls, or windmills? The Future of Reputation32
  • 33. At the dawn of capitalism half a millennium ago, a business’s reputation depended on the skill of its owner to display himself in mansions designed by the foremost architects, where he received people in Faustian style under the gaze of family portraits, preferably signed by great masters. Corporate image in the mid-16th century changed in direct proportion to luxury, in a figurative attempt to use abundance as a means of facing down any economic catastrophe. And the method made sense, because high risk businesses – trade, banking or manufacturing – could keel over at a moment’s notice as they suffered the side effect of long-running and inconclusive wars, plagues, piracy or the planned bankruptcy of monarchs who underwrote bills of exchange with no backing in order to patch up their royal coffers. Paulo Andreoli Chairman, Latin America, MSLGROUP Origins of Corporate Image REPUTATION JOURNEY | Reputation and Corporate Image Today 33 Reputation and Corporate Image Today
  • 34. Human intuition has always defined social hierarchy through material possessions. With the triumph of capitalism, respect also became a major factor and rapidly grew in importance as trade expanded and the Industrial Revolution and globalization came about. Sumptuous pomp as a seal of legitimacy was the driving idea that had developed through the Middle Ages and had its roots as far back as the Greek and Roman empires. Ostentatious symbolism was so deeply rooted that Europe embraced it, setting aside the modesty and charity it preached. Human intuition has always defined social hierarchy through material possessions. With the triumph of capitalism, respect also became a major factor and rapidly grew in importance as trade expanded and the Industrial Revolution and globalization came about. The Future of Reputation34
  • 35. From healthy balance- sheets to ‘Doing the Right Thing’ However, a sudden and important change recently occurred; this change became increasingly clear during the last decade of the past century when competition broke out of national boundaries and gave consumers an increasing number of choices – and when faced with products or services presenting similar attributes, these consumers are showing a growing disposition to select the supplier who “does the right thing.” The result of this outpouring of citizenship is the profusion of vegetables grown without pesticides, organic wines, veal from cattle slaughtered painlessly, lead- free lipstick, the launch of hybrid cars, green banks, delivery systems which pay fines if deliveries are delayed as well as investment funds which only purchase stock in companies that do not use child labour – among many other examples of the imaginative methods used to tug on a customer’s heartstrings. In the wake of this crusade, the number of executives responsible for Sustainability has multiplied. These executives report directly to the CEO and their actions are specifically targeted at increasing the company’s reputation (and bottom-line) by giving their full attention to a wide variety of interests intertwined with their everyday business activities. Initiatives and other measures along these lines have inspired corporate communications, which have sought to nurture empathy and engagement. In the 21st century, modesty and good behaviour now rival healthy balance sheets as a means of developing a strong reputation, part of an attempt to draw a dualistic and implausible contrast with direct competitors who hesitate to adopt the same approach. 35REPUTATION JOURNEY | Reputation and Corporate Image Today
  • 36. The Future of Reputation36 Challenges of this new approach Companies that decide to take this approach face at least two challenges. A commonplace one is that every prosperous and long-lasting company must adopt best practices, pay its bills on time, comply with regulations, be ethical, respect their employees, provide their shareholders with adequate returns and take their customers opinion seriously – basically, doing the right thing, just without the quotation marks. For a company like this, a flashy Sustainability Department is simply redundancy; or rather, a modern variation of the luxury that primitive capitalism used to communicate solidity. The second problem is a subtler one. It is born out of the investment needed to confirm that the Sustainability area has an important and powerful role to play in crucial company decisions. We used to have just Social Responsibility, now we also have Sustainability. Company executives are finding themselves increasingly compelled to incorporate new practices, which are actually nothing more than simply doing the right thing – an inherent value for all successful companies.
  • 37. 37REPUTATION JOURNEY | Reputation and Corporate Image Today The speed with which information spreads over social infrastructure has made companies vulnerable and managers need to be constantly aware of what their companies are doing and how the public perceives their products and services. They need to realize that online interaction will be a benefit but also that public exposure – from which they will not be able to hide – will make them more vulnerable. Being present is no longer a choice but a reality. Reputation has become an asset which is at the same time essential for success and also the greatest threat to that success – one more challenge for managers who, until recently, needed only to concentrate on producing healthy financial performance indicators. Today, an attitude or a gesture by an irritable employee can undermine several years of positive reputation and can have a direct effect on the company’s results and the way it is perceived. Crisis management processes are now online and a component of strategic business management. Like marketing, corporate communications will increasingly depend on more accurate information and analysis. This means that the challenge is to anticipate trends based on “Big Data” and depends on our ability to interpret the “collective unconscious” and provide companies with guidance when taking decisions.
  • 38. Every company’s sales, products, human resources and corporate image face highs and lows. In the real world, business brings with it unexpected fluctuations. This makes it all the more important to keep doing – and re-defining – the right thing. The Future of Reputation38
  • 39. 39 CLICK TO SHARE Walk the talk: The need for Rational and Long-lasting Action The era of institutional hypocrisy has ended. There is little point sponsoring a film, a winning team, spending millions on advertising if, for example, social media challenges the poorly managed acquisition of a foreign oil refinery. The worst type of problem for a company’s reputation is caused by incorrectly defining its objectives and the way in which this message will be translated into a language capable of expressing it to non-specialists. For example, if oil begins its life as a pollutant, anyone who works with oil runs an inordinate risk if they try and present themselves as a producer of clean energy. Companies that make statements in an attempt to change the facts are only creating problems for themselves. It is surprising to see so many capable people being tripped up by this approach, because 500 years of experience should by now have taught business managers how to build value and generate results through rational and long-lasting action. These experiences clearly showed that a company’s reputation has intrinsic weaknesses tied to its business, it can be affected by natural disasters, by a poorly concluded transaction, by a gesture, an attitude and when hypocritical and/or prideful statements are laid bare, often at great cost. This does not mean that corporate image only comes in two colours: black or white, without any grey. Legitimacy is a long- lasting asset, it can stand up to abuse and can be restored provided that every negative experience is treated transparently, openly, intelligently and with great professionalism. 39REPUTATION JOURNEY | Reputation and Corporate Image Today
  • 40. Today’s Stakeholders: Demanding but open to collaboration
  • 41. Your Corporate Brand Reputation is Now in the Hands of Millennials The Future of Reputation is about Building from the Inside Out Reputation Building by Influencer Collaboration Scott Beaudoin, Global Practice Director, Corporate Brand Citizenship/ PurPle, MSLGROUP Jason Frank and Brian Burgess Global Co-leaders, Employee Practice, MSLGROUP Martin Dohmen, Germany Director, Corporate Brand Citizenship/PurPle, and Chief Strategy Officer, MSL Germany VOLUME 3, ISSUE 1
  • 42. Scott Beaudoin Global Practice Director, Corporate Brand Citizenship/PurPle, MSLGROUP For companies to win in the new reputation economy, they need people to believe in what they stand for and engage them in their citizenship efforts. That is never truer than it is with today’s Millennials who will be roughly 75% of the global workforce by 2030. Millennials are not only our current and future employees (and bosses) but they are our current and future customers. Understanding their personal views and ideals will be the only critical way to help us manage corporate reputation now and well into the future. The Future of Reputation42 Your Corporate Brand Reputation is Now in the Hands of Millennials
  • 43. While most Millennials (74%) believe business is having a positive impact on society, by generating jobs (48%) and increasing prosperity (71%), they think business can do much more to address society’s challenges. What Millennials Want and Expect According to Deloitte’s third annual Millennial Survey, while most Millennials (74%) believe business is having a positive impact on society, by generating jobs (48%) and increasing prosperity (71%), they think business can do much more to address society’s challenges in the areas of most concern: resource scarcity (68%), climate change (65%) and income equality (64%). Additionally, 50% of Millennials surveyed want to work for a business with ethical practices. TODAY’S STAKEHOLDERS | Your Corporate Brand Reputation is Now in the Hands of Millennials 43
  • 44. Deloitte’s third annual Millennial Survey surveyed nearly 7,800 Millennials from 28 countries across Western Europe, North America, Latin America, BRICS and Asia-Pacific about business, government and innovation. The questionnaire focused on the role business plays in society; its objectives, impact and outcomes; the responsibility of business and government and how well each is addressing the challenges faced by society. Deloitte’s Millennial Survey also found that Millennials are eager to make a difference. Millennials believe the success of a business should be measured in terms of more than just its financial performance, with a focus on improving society among the most important things it should seek to achieve. Millennials are also charitable and keen to participate in ‘public life’: 63% of Millennials donate to charities, 43 percent actively volunteer or are a member of a community organization, and 52% have signed petitions. This intersection of Millennials’ expectations and their eagerness to make a difference provides an opportunity for companies and brands if they are smart enough to seize it. You don’t have to look far to find some companies already maximizing this opportunity and a closer look will show you that these are the companies and brands whose reputations are benefiting from it. 60% 40% The study discovered that people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perceptions of the company And only 40% by their perceptions of the products The Future of Reputation44
  • 45. Three of the seven dimensions that drive reputation (citizenship, governance, and workplace) fall into the CSR category—and analysis shows that 42% of how people feel about a company is based on their perceptions of the firm’s corporate social responsibility practices. In June of 2013, Reputation Institute, a private global consulting firm based in New York, invited about 47,000 consumers across 15 markets to participate in a study that ranked the world’s 100 most reputable companies–all multinational businesses with a global presence. In addition to finding the companies with the best reputations, the study discovered that people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perceptions of the company, and only 40% by their perceptions of the products, says Kasper Ulf Nielsen, Reputation Institute’s executive partner. Each company earned a “RepTrak™ Pulse” score representing an average measure of people’s feelings for it. The scores were statistically derived from four emotional indicators: trust, esteem, admiration, and good feeling. Reputation Institute then analyzed what it calls the seven dimensions of corporate reputation, including workplace, governance, citizenship, financial performance, leadership, products and services, and innovation. 45TODAY’S STAKEHOLDERS | Your Corporate Brand Reputation is Now in the Hands of Millennials
  • 46. It turns out the corporation with the very best CSR reputation is Microsoft, the Washington state-based software giant. Being a responsible global corporate citizen is a commitment made at all levels of Microsoft. It’s not a top-down effort, but rather bottom-up. It’s a testament to the company’s worldwide employees and the difference they are making in their local communities. While the company has a small citizenship team at the corporate level, they have citizenship champions across the globe and they work daily in collaboration with a wide range of stakeholders on a range of issues important to local communities. In September 2012, Microsoft refocused much of their efforts around creating opportunities for youth by launching Microsoft YouthSpark, a major initiative to connect hundreds of millions of youth with opportunities for education, employment and entrepreneurship. The company is working to bridge the opportunity divide that separates youth who have opportunities from those who don’t, with the goal of helping young people secure their individual futures and also the future of society. Most reputable corporates brands: The Future of Reputation46
  • 47. Most reputable corporates brands: Google is also at the top of the list and continues to be seen as the best company to work for in the world. Google’s strong workplace perception helps secure its strong reputation overall and within CSR. In the Reputation Institute’s study, fifty percent of consumers across the 15 countries say they definitely think that Google treats its employees fairly and takes their well being into consideration. Google knows how to put caring in the hands of the younger generation. “Google China Social Innovation Cup for College Students” is a nationwide competition that aims to empower China’s youth to become agents of social change. By soliciting project ideas from college students and funding viable proposals, the company hopes to instill in China’s future leaders the values of social responsibility, the importance of community welfare, and the spirit of self-empowerment. Among all colleges and universities that participate in the competition, the 100 that top in the number of proposal submission will share 500 Google “Campus Volunteer Stars” Scholarships every year. 47TODAY’S STAKEHOLDERS | Your Corporate Brand Reputation is Now in the Hands of Millennials
  • 48. The Future of Reputation48 a sense of fulfillment. So why would we put our company’s reputation in their hands? It’s easy. They have the potential to be a company’s most ardent supporter and their voices are heard and their messages will travel. Creating opportunities for Millennials to engage in social purpose is critical. This could be anything from surveying employees on where to donate a portion of the company’s charitable funds to creating a volunteer program. Millennials are already open to engaging with brands and look for purposeful work. It’s time to start leveraging their potential and incorporating employees into the planning and implementation of purpose goals. With research indicating that 88 percent of Millennials make employment choices based on a company’s CSR values and 86 percent consider leaving a company if its Corporate Citizenship values no longer met expectations, it’s clear that to lead in the new reputation economy, businesses must have strong voices when it comes to their values and initiatives. The impact of citizenship on the future of reputation is crystal clear. Engaging Millennials around Social Purpose End of Trust Rise of Shared value Quest for meaning Power to people The Millennial generation has a reputation of being entitled, but this is part of the result of their desire to engage with the world around them. They feel responsible to themselves, their neighbors, their communities and the planet. They grew up learning that their actions directly affect the world around them. In return, they believe companies should act the same way. The tension lies in the fact that Millennials are notorious for having high employee turnover rate, particularly if their job does not provide
  • 49. 49 The human truth beyond the theory You’ve managed people, and led them – so have we. We don’t need convincing of the impact of ‘employee engagement’ because we experience it first hand almost every day. Forget the terse business definitions, you can see ‘engagement’ in someone’s eyes, their body language, the things they say; and you can measure it in anything from their attendance record to their sales figures. These tangible outcomes of ‘employee engagement’ have equally tangible implications for corporate reputations. As shared personal experiences become the dominant currency of reputation, so the shared experiences of employees, and the people they interact with, continue to grow in value. The Future of Reputation is about Building from the Inside Out Jason Frank Brian burgess Global Co-leaders, Employee Practice, MSLGROUP TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
  • 50. Take just one large cross-industry survey from the US (TARP), which suggests that almost 70% of customers who leave a business or brand will do so because of a negative experience with one of their employees – not for a lower price or better product. In our increasingly knowledge and service- based economies we’re moving quickly from valuing our people’s IQ to their Emotional Quotient (EQ) and now their Social Quotient (SQ). Success is about ‘how’ we do things, not ‘what’ we do. In that context the things your people say and do define reputations more and more - not least because their words and actions can be amplified across global digital networks of influence in an instant – either by them or someone else. The Future of Reputation50
  • 51. Unprecedented risk and Opportunity From the Goldman Sachs ‘Vampire Squid’ saga on one hand, to the famous smiling service of Pret-a-Manger fast food staff on the other, it doesn’t take a genius to appreciate the growing risk and return that lies in taking employees more and more seriously as builders or destroyers of reputations. So, what are the implications for all of us? How do we as corporate communicators harness the power of employees to build credible, sustainable reputations, and how do we mitigate against the risks? Here are five tips to help you ensure that your employees become a force for good in your on-going quest to build and protect reputations in today’s conversation age. Make Them Part of The Plan Think Embrance Networks Re-prioritise to Reflect The New Normal Unleash The Power of Content Influence Cross The Functional Divide steps to success in building reputations from the inside out 51TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
  • 52. Too often we see corporate communications briefs with employees identified as a ‘secondary’ audience, receiving little if any strategic consideration. Too many opportunities to add greater reach, power and credibility to our communications are being missed by thinking in traditional, largely external broadcast terms. Whether it’s from a risk mitigation point of view, or a more positive standpoint, we need to move employees up the priority list when devising communications strategies. Dependent on the nature of the challenge any of the following questions can be useful to ask: How would employees react to this? The growing reputational power of the employee is evident in the number of Corporate Communications Directors assuming responsibility for communicating with employees. This makes sense, but it’s incredibly important that Corporate Communicators are in regular conversation with HR and other employee specialists How can they help us by validating this or adding credibility in some way? How can they help us to ensure that the messages reach more people? How could they derail this? It may be that when you ask yourself these questions you draw a blank, but those instances are becoming increasingly rare for our clients. within the organisation. The value of working together goes both ways. HR can provide employee insight and expertise, whilst Corporate Communications can bring their expertise to support the function that has such a profound impact on employee engagement levels. At the most basic level Corporate and more HR focused employee communications need to be planned in a coherent, joined-up way to avoid contradictions, duplications and wastage. At a more sophisticated level the Corporate Communications Director needs to be fully in tune with the Talent / HR agenda (and vice-versa). It’s essential that Corporate Communications are in tune with the ebbs and flows of employee engagement – whether that’s through formal annual employee surveys or more informal observations and feedback. The relationship and mutual support between HR and Corporate Communications is more fundamental than ever to the art and science of building and managing reputations. Time spent in making it work is time well invested. The Future of Reputation52 Make them part of the plan Cross the functional divide
  • 53. As the power of almost every available transmission mechanism for corporate messages wanes, the importance of personal networks and shared experiences continues to grow. The reputational mathematics are crude but powerful. Take a global services organization of 160,000 people, typically something like 75,000 people would have left the organization in the last three years. If we take a conservative figure of just twenty relevant people in each of the 235,000 past and present employees’ personal and professional networks, we quickly come to a direct ‘tier’ 1 network figure of 4.7 million. Moreover, the reality is that many of these people move to the ‘other side of the fence’ and become clients or potential clients. It’s little wonder that many of the world’s leading services organisations are investing heavily in alumni programmes, designed specifically to ‘engage’ former employees, maintain relationships, and build networks. Above all this is an opportunity. With the right content, education and simple software tools we can massively enhance the reach and credibility of our communications through our employees’ networks. We’ve seen it first hand through our own experiments with simple social media plans, education and amplification tools – a 140% increase in website traffic in two weeks speaks for itself. We’re now doing it for clients. 2,35,000 20 4.7mN 160,000 75,000 EmploYees (Past And pResent) Tier 1 networKRelevAnt sOcial ConneCtions 53 Think embrace networks TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
  • 54. Almost every single organization we’re working with is grappling with the issue of how they effectively and efficiently source, curate, store and distribute compelling content that will enable them to sustain valuable and meaningful dialogue with their stakeholders. If organisations can create a culture that empowers people to create content, by making it easy and by rewarding it, the job of corporate communicators will become that much easier. So much time is wasted tracking down great people and their stories. Imagine having a culture where people were queuing up to share their amazing personal and professional stories with you – adding depth, credibility and emotion to your corporate narrative and messages. If you can go some way towards fostering that sort of culture in a controlled and focused way you’ll become so much more effective and efficient in satisfying the insatiable demand for conversation and content from your audiences. Every time we work with clients to tap into the vast storytelling power of their employees we’re amazed by what we bring to the surface. If only that could be sustained the practice of corporate reputation building could be transformed. The second part of this equation is identifying and empowering the real influencers. One of my social media experts sent me a fascinating article just a few days ago. It told the story of a major organization that had recently conducted a social network analysis exercise to identify which employees were most influential – who had the most social ‘Klout’. Unsurprisingly the influencers weren’t at the top of the organization. The lesson for all of us is that lurking within our organisations are people with huge untapped potential to be really authentic and powerful advocates and influencers. Of course we need to be mindful of not compromising their authenticity, and think very carefully about how we can support their activities, but what an exciting opportunity. A call to arms The relationship between employee engagement and corporate reputation is a massive topic and we’ve barely scratched the surface but its importance is clearly on the rise, and the possibilities are largely untapped. In a world where the corporate voice is falling on deaf ears and where the grip of traditional channels is weakening, the imperative to tap into this massive opportunity is growing every day. Which brings us neatly to step 5: 54 Unleash the power of content influence The Future of Reputation
  • 55. In virtually every organization expenditure and effort on communicating externally vastly outstrips efforts focused on employees. But all the advertising, glossy films, websites, and corporate spin in the world can’t paper over the cracks of a bad customer experience, or drown out the noise of negativity from employees. Our learning from experience is simple, and it applies equally to the TV-obsessed Marketing Director as it does to the Corporate Communications Director: If organisations re-oriented just a small percentage of that external spend and effort to engaging employees with their visions, values, and purpose, then overall reputation building efforts would be more effective and ultimately less costly. And the effects of higher engagement levels will be multiplied if you can really empower your people to share their stories and enthusiasm. 55 Re-prioritise to reflect the new normal TODAY’S STAKEHOLDERS | The Future of Reputation is about Building from the Inside Out
  • 56. The Future of Reputation56 Reputation Building by Stakeholder Collaboration Numerous companies and brands have recently recognized the sign of the times and moved on to create a new dimension of interaction with their external and internal stakeholders. New opportunities open up due to the arrival of new media, channels and platforms – as new challenges arise in the wake of eroding trust, and the growing demand for participation in the always-on conversation economy. Which are the key factors of success, then, in turning corporate and brand relations into a lasting and mutually beneficial stakeholder engagement? What are the most promising choices in setting up “Purpose + People” programs meant to effectively involve customers and consumers, employees and influencers, thought leaders and citizens? How to best establish communications platforms and programs to add to an attractive “citizen brand” profile? Who could be the audiences participating in the evolution of corporate and brand reputation - through sustained and constructive dialogue, productive ideation and sustained co-innovation? Martin Dohmen Germany Director, Corporate Brand Citizenship/PurPle, Chief Strategy Officer, MSL Germany
  • 57. 57 The Why: stay close to your brand purpose but follow the conversation. An inquiry into the purpose-related communications of major global companies – like MSLGROUP’s PurPle (Purpose + People) Index – reveals that most key topics around which brands choose to initiate a dialogue fall into four categories: health, environment, education or human potential. Ideally, a brand purpose forms a bridge between the brand’s DNA and its most significant overall promise to stakeholders and society alike. Hence, pharmaceutical firms like Janssen tend to collaboratively address health issues, a global energy player like Shell is most credible as thought leader and conversation host on energy matters etc. Increasingly, reputation hinges on stakeholders’ trust in a brand’s future ability to address, and successfully cope with, upcoming demands, challenges and opportunities. Beyond competence and responsibility, this belief makes a decisive difference in securing brand competitiveness and appeal. TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
  • 58. Video: Future Influencers: Unlocking the Energy Challenge IBM’s Smarter Cities initiative has been a good example for a company focusing on a future agenda outside of its comfort zone. The Future Influencers think tank initiated by Siemens equally proves that current business and technological expertise can be made to bear fruit in collaborating with decision-makers and influencers on larger topics, like urban mobility and urgent global sustainability issues. Remaining flexible matters too: if fracking in the United States turns part of the global energy agenda upside down, brands should be willing to follow and inspire the meandering energy conversation. IBM challenged people to build a smarter planet The Future of Reputation58
  • 59. The What: if you are not up for a long-runner, do not start to walk (and talk). Format options for collaborations range from open crowdsourcing of ideas to exclusive conceptual debate and from controversial dialogue to collective co-creation. When teaming up with some of the most imaginative and inventive talents and start- up entrepreneurs, GE’s Ecomagination Challenge offers a model for collecting and rewarding innovative (business) ideas. If the aim is to empower consumers to co-direct the brand’s cause-related engagement activities, the Pepsi Refresh Project still offers a bold pioneer model, even though it has not been continued. Open collaboration formats are challenging, not only in keeping out non-productive participants. It is by no means less complex to initiate, manage and stimulate more exclusive or closed collaboration communities. A well-planned and intense moderation (with 24/7 capabilities) is key in an external debate for ideation or concept development, as in any advanced corporate social intranet drive. 59TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
  • 60. The Future of Reputation60 The How: networking and own visibility beat platform technology as attractors. State-of-the-art multi-media event experiences and digital collaborative tools indeed make a big difference to create attractive environments for advanced interaction. Yet, communicators tend to overrate the technological platform factor. Experience indicates that a strong conversational agenda fuelled by authentic and engaging storytelling has a much stronger effect in attracting audiences to become initially involved in collaborative communications. A high-level peer-group offering new networking opportunities beyond the actual dialogue, a chance to personally contribute to a ground-breaking content production, exclusive access to brand ambassadors and thought-leading personalities, and, last not least, added visibility as opinion-leaders and influencers. These are key benefits potential collaborators will be looking for and appreciate – as the build-up and evolution of the Future Influencers community has demonstrated. Monetary or commercial incentives are also able to drive participation, especially in idea competitions. In the long run, however, the trust and reputation brands can gain from intensified, more direct communications and relations with their stakeholders will only come through benefits beyond money – and only with a credible commitment to make purpose-related collaborations last and grow.
  • 61. 61 The Who: talking with “my” generation – if it has influence. Some general learnings apply, regardless of whether company managers or analysts, employees or environmental activists, brand followers or academic experts are to be involved in a collaboration. Stakeholder communications grow outside in: the 90 (invitees) / 9 (inactive members) / 1 (active participant) community principle roughly holds true. This makes it necessary to initially address a much larger group than the one the collaboration is planned to be eventually carried out with. At the same time, community engagement grows inside out. This makes it an imperative to nurture the most active players in the conversation - because they are the ones spreading the collaborative impulse to non-active collaborators and to larger audiences outside of the collaboration. The need for initial awareness and attention makes it highly desirable for a brand to focus collaborations on those parts of its audience which have the biggest influence - be it through their professional authority (and publishing track record) on “my” topic or through their social media clout. Whoever is capable and likely to spread the news about the collaboration and the brand’s role in it is a relevant candidate. Finally, external stakeholders and audiences – including critical institutions like NGOs and citizen advocates - have repeatedly made it clear that they are not shy about facing companies and brands which explicitly follow their respective business rationale. It makes sense to plan for multi-party collaborations involving managers and employees, customers and consumers, experts and candidates at the same time. A diverse mix will not only make the collaboration more colourful and inspiring beyond conventional audience wisdom, it can also help to create and amplify conversational and reputational interplay, inside and outside of the collaboration. 90Invitees 9inactive 1active TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
  • 62. The Future of Reputation62 Siemens Future Influencers Future Influencers is an online community initiated by Siemens as a global and exclusive think tank with more than 180 international young thought leaders – and it is still growing. Everyone taking part must demonstrate an expertise and passion for sustainability subjects and possess a strong “digital presence”. In several collaborations per year, the Future Influencers pitch ideas, discuss them and evaluate the most promising concepts. The creators of the best ideas are invited to appear at, and participate in, major global events connected with Siemens, like the World Climate Summits. Project partners include the World Resource Institute and the Harvard Business Review. MSL Germany and Publicis Munich are supporting Siemens in managing collaborations and building the community. Return on Collaboration: shared value + share value An authoritative set of Global KPIs for collaborative stakeholder communications is not yet available due to the early evolutionary stage of the shared value paradigm. Projects like Siemens Future Influencers have produced some first insights on the benefits for companies and brands investing in long-term collaboration platforms and programs. Siemens Future Influencers Community futureinfluencers.com
  • 63. 63 Learning from the Future Influencers initiative Companies and brands can gain access to “real” conversations not tainted or distorted by push communications and wishful thinking. They can gain valuable insights and ideas not available otherwise from more superficial forms of interaction and dialogue. Listen and learn. Co-produce content. Share and enlarge visibility. Conversational conversion rate. Connect and attract. Gain access to top talent and future decision-makers. Debates, ideas, concepts, research, positions, publications etc. – whether as direct community output or as a result of a larger cooperation, well-planned and thoroughly managed collaborations lead to relevant, interesting data, stories and intelligence. The co-produced content is an excellent addition to corporate and brand communications and content marketing. Collaborations are about talking to each other and, most of all, about working together to co-produce results. The higher the number of collaborators involved in this kind of conversational community building, the higher the brand attraction. Any high-quality collaboration is a vehicle and booster to spread the news on the brand’s thought-leading and conversation-leading competence and contributions. The traceable multiplier effect created by the collaborators indicates the collaboration’s relevance and attractiveness. The combination of all other effects will lend to an enhanced reputation, create an increased interest from target audiences and, eventually, more leads and demand. As a sustained working relationship is more reliable than mere “followship,” the engagement created with present or future high potentials, influencers, opinion- leaders and decision-makers (internally or externally) also leads to a competitive advantage in brand reach and clout. TODAY’S STAKEHOLDERS | Reputation Building by Influencer Collaboration
  • 64. Reputation Management: From Risk Mitigation to Competitive Advantage
  • 65. From Ignition to Recovery: The Components of Today’s Crises Nidhi Makhija, Senior Manager – Insights, MSLGROUP The Evolving Role of the Board in Reputation Management Brad Wilks, MD, Midwest, North America, MSLGROUP How to Manage Your Reputation in the Social Age Tap into Big Data: The Transcript of your Reputation Merrill Freund, MD, San Francisco, MSLGROUP Frederike den Ottelander, Head of Digital Social, Netherlands, MSLGROUP VOLUME 3, ISSUE 1
  • 66. Nidhi Makhija Senior Manager - Insights, MSLGROUP From Ignition to Recovery: The Components of Today’s Reputation Crises 66 The Future of Reputation In our hyper-connected globalized world, we are seeing that reputation crises have the potential to grow faster, spread wider and hit harder than any time before. There are two simple reasons for this: 1) People are well-connected on social platforms, and actively share information and opinions with their networks in real-time. It’s easier for people to organize themselves and apply pressure to both regulators and companies. 2) Companies are larger and widely extended, with suppliers, employees and customers spread out across culturally diverse regions. As a result, both products and news extend over a wider geography at a faster pace. An analysis of recent corporate and brand crises - events that were buzzing in international news sites and social conversations in the last two years – provides us with a broad idea of the issues that stakeholders care most about today.
  • 67. A look at recent brand crises reveals that people care most about 67REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises FAULTY PRODUCTS MISCONDUCT LEADERSHIP DATA SECURITY COMPANY’S CONDUCT ECONOMY ENVIRONMENT HUMAN RIGHTS TAX AVOIDANCE LOW WAGES/ UNPAID SALARIES MAN-MADE DISASTERS EXPLOITATION DISCRIMINATION HIRING BIAS A company’s conduct and its impact on the economy, environment and human rights.
  • 68. 68 The majority of crises fall into this category, as several brands struggled to deliver on their basic offer (e.g. the horse-meat scandal that affected food manufacturers in Europe), and as several companies, leaders or employees misbehaved (e.g. Lululemon CEO’s comments after the see-through yoga pants scandal). Today, people are holding brands to deliver on the product offer (as we saw in China, when a celebrity blogger smashed a defective Siemens fridge), and they are expanding their expectations to include data security (as catalyzed both by the NSA-snooping scandal and the Target security breach which compromised payment details of 40 million customers in the US). People also expect more out of corporate leaders, and are not shy of punishing the organization for its leaders’ actions or The Future of Reputation Company’s Conduct: Before and After Crises1 comments (as in the case of Barilla CEO, whose anti-gay remarks on a local Italian radio sparked a global boycott). Regulators are becoming more demanding as well, especially in the financial services sector, and are raising the severity of fines to match the scale of misconduct (as auditing firms such as PwC and Deloitte are finding in the UK, and banks such as JP Morgan and Bank of America are finding in the US).
  • 69. 69 Company’s conduct Armstrong doping scandal Cyclist Lance Armstrong’s doping confession led to a drop in support for his charity Livestrong and an end to it’s partnership with Nike See-through pants Lululemon’s black yoga pants were recalled for being too ‘sheer’ and its CEO was ousted for later pushing the blame on ‘unfit’ customers Security breach Target’s data security was breached by hackers over 19 days; credit and debit card information of 40 million US customers were stolen Loan modification delays Bank of America’s home loan modification delays came under the regulatory scanner as customers and employees alleged that the delays were intentional Jimmy Savile sexual abuse scandal BBC’s decision to shelve a report about their late employee’s criminal past led to the organization’s ‘worst crisis in 50 years’ and resignation of its Director General Horse-meat scandal Traces of horse-meat appeared in beef products in the UK, France and Sweden, enraging the public and regulators Anti-gay comment Barilla chairman’s comment that he would never feature a same-sex couple in his ads sparked a boycott and backlash in several countries Defective fridges Siemens’ inaction to address complaints inspired a Chinese internet-celebrity to smash a fridge outside the company’s HQ in Beijing Astroturfing Samsung was fined by regulators for posting fake reviews and comments against competitors Cruise mishaps Carnival’s safety record took a hit as the Costa Concordia sank, killing 32, and Carnival Triumph suffered from an engine failure the next year Auditing failures PwC and the Big 4 face increasing pressure and larger penalties from UK regulators for their broader role in the financial crises London Whale A single JP Morgan trader lost more than $6.2 billion on derivative trades, reigniting regulators’ concerns about the banking industry's practices and risk appetite FAULTY PRODUCTS MISCONDUCT LEADERSHIP DATA SECURITY REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
  • 70. Increasingly, people are paying attention to a company’s contribution to state coffers and its strain on public services. Companies, especially in the US and UK, are coming under the public and legal scanner for avoiding corporate taxes (as Google, Amazon and Starbucks saw in the UK) or for having too many employees dependent on tax-funded welfare programs (as is the case with Walmart and McDonald’s in the US). People are becoming more and more aware of the larger picture – they are looking past organizational structures and holding profitable parties at the top responsible for the losses at the bottom. This was well-illustrated in the case of Kingfisher Airlines in India, whose wealthy promoters have been heavily criticized for delays in employee salaries. Four years after the BP oil spill and three years after the Fukushima nuclear reactor meltdown, people seem determined to avoid similar man-made disasters. Oil companies are facing heat from activist groups and regulators in new drilling projects (as in the case of Shell, which has had to shelve its 2014 arctic drilling plans). Nuclear energy companies are facing similar resistance following the Tokyo Electric Power Company’s inadequacies in preventing and alleviating the Fukushima disaster. 70 The Future of Reputation Impact on the Economy: Seeking Sustainable Growth2 Impact on the Environment: Prevention before Cure3
  • 71. Economy and Environment TAX AVOIDANCE LOW WAGES / UNPAID SALARIES MAN-MADE DISASTERS Welfare queens Walmart and McDonald’s employees rely heavily on taxpayer funded welfare programs, fuelling the debate around minimum wages Tax avoidance Google, Starbucks, Amazon faced public and regulator outrage in the UK over low-to-zero tax payments in the past decade Unpaid salaries Kingfisher Airlines failed to pay employees for months before going bankrupt, angering public and regulators and hurting the reputation of its successful parent company and millionaire owner Nuclear hazards TEPCO, the operator of the Fukushima nuclear plant, was criticized for a lack of safety precautions and the way it handled the meltdown, escalating global concerns around nuclear energy Arctic drilling Shell and Gazprom’s drilling programs have been targeted by Greenpeace activists, who are concerned that weather conditions would make any disaster response efforts impossible 71REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
  • 72. A large number of brand crises revolve around human rights, as people continue to fight gender inequality and demand equal rights for the gay community and for workers of different socioeconomic backgrounds. The fight for gay-rights is a global one, with tremors felt at the Barilla headquarters in Italy, at the Supreme Court in India, and at Sochi 2014. People are sensitive about gay rights and it is common for activists to publicly shame companies that fund anti-gay organizations (as in the case of US fast food chain Chick-fil-a, which witnessed national boycotts and appreciation-days as ideologies clashed). Exploitation of low wage workers has recently emerged as a global issue as well. People are unwilling to be a part of a system based on exploitation, and are demanding brands be accountable for all workers: including those across the supply chain and temporary workers. Companies that have been publicly shamed include the fashion industry for allowing unsafe working conditions in factories in Bangladesh, Amazon for demanding too much out of its warehouse workers, and FIFA for doing little to safeguard labour rights in Qatar. There’s heat at the opposite end of the spectrum as well, with US regulators clamping down on companies that hire people from wealthy backgrounds in exchange for new business contracts (as in the case of JP Morgan which is under investigation for hiring ‘Chinese princelings’). 72 The Future of Reputation Impact on Human Rights: Equality for All4
  • 73. Human Rights EXPLOITATION DISCRIMINATION HIRING BIAS Chinese princelings JP Morgan’s practice of hiring sons and daughters of elite Chinese in return for business contracts led to legal troubles in the US Hiring based on looks Abercrombie Fitch’s biased hiring practices came under scanner as activists argued that sales staff are not models and should not be discriminated against for their looks Exploitation of migrant workers Qatar 2022 and FIFA are facing pressure from international human rights bodies to improve treatment of migrant workers and to address the steep number of casualties Exploitation of low-wage workers Global fashion brands were targeted by activists after a clothing factory collapsed in Bangladesh. Many European brands were quick to sign a legally binding safety accord, while American brands refused and faced much negative news coverage. Brands such as Mango were also criticized for inadequate compensation to victims’ families Scam ads Ford was embroiled in controversy when its ad agency released unapproved and distasteful scam ads that depicted women tied up in the boot of the Ford Figo ‘Slave camps’ Amazon warehouses were likened to slave camps as journalists criticized the physical demands and excessive performance targets placed on warehouse workers Same-sex marriage controversy Chick-fil-a’s donations to anti-LGBT rights political organizations led to a public debacle; with Chick-fil-a boycotts clashing against Chick-fil-a appreciation days Lack of diversity Twitter became the poster boy of the lack of diversity in Silicon Valley when it revealed, in its pre-IPO filings, that it had an all-white all-male board 73REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
  • 74. WHAT BOFA DID PEOPLE’S RESPONSE IMPACT Crisis Catalysts: Three things to watch out for In addition to the issues themselves, corporates and brands should also be prepared for three trends that can fuel crises: steady stream of negative stories on social media and calls to rally against the bank. The impact? American Banker’s 2013 Survey of Bank Reputations shows that Bank of America scored lowest amongst customers and ‘even worse’ among non-customers. Bank of America’s reputation took a hit during the financial crisis of 2007-08 and continues to stay low because of the company’s non-empathetic response and the profit-first attitude it continues to portray. In the last few years, angry Bank of America’s customers and employees reacted to delays and new ‘unjust’ policies with a 74 The Future of Reputation Power of Individuals: the Bank of America case1 Unjustified Interest Hikes to 30% - even for customers in good standing Customers shared stories on YouTube, and one woman called for a Debtor’s Revolt Media picked up these stories BofA resolved individual cases, thus inspiring others to follow suit Why Bank of America Fired Me video received over 560,000 views BofA ranks poorest in customer service studies (ASCI, MSN) Credit Unions received 1 million additional new customers and over $4.5 billion in funds in 2011-12 Employees customers shared stories and created a “Banking Bad” mockumentary on YouTube One customer created a Facebook event that sparked a national Bank Transfer Day movement Intentional delays in modifying loans – leading to preventable foreclosures demoralized staff First to introduce a $5 Debit Card Fee – to preserve high profits
  • 75. In April 2013, the global fashion industry was accused of labour exploitation after the collapse of the Rana factory in Bangladesh killed a thousand workers and injured two thousand more. Activists and the media quickly revealed the brands whose apparel was manufactured at the factory and mobilized people to petition the brands involved to sign The Accord on Fire and Building Safety in Bangladesh – a five year legally binding agreement to fund and uphold minimum safety standards in the Bangladesh textile industry. Less than a month after the collapse, 90,000 people signed the petition, pressuring 42 brands to sign the agreement. Today, over 100 brands have signed the accord, and 26 additional brands have created their own independent five-year safety plan. As the one year anniversary looms ahead, activists and the media are pressuring the industry to contribute to a $40 million compensation fund for victims. In January 2013, horse DNA was found in frozen beef products in a British supermarket and triggered a ‘major breakdown in the traceability of the food supply chain.’ Adulterated meat was found in 13 EU countries and millions of pounds of food was recalled across Europe. Several hundred companies had received adulterated supplies of meat which was later traced to slaughterhouses in Romania and Poland. Further tests detected traces of the veterinary drug phenylbutazone, sparking fears for human safety. Consumer-facing brands like Tesco and Findus suffered large drops in sales and changed suppliers. Frozen meat products as a category witnessed a decline, and people in the UK are opting instead for fresh traceable food and shopping at local butchers and farmer’s markets. 75 Speed of Activism: Bangladesh Safety Accord2 Challenges of Scale: Horse-meat scandal in Europe3 REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
  • 76. Recovering from crisis: Leading the Conversation In times of crisis, people expect corporates and brands to step up and lead the conversation. Tired of denials, people want companies to acknowledge their mistakes, implement quick solutions, and prevent similar events from occurring again. Power of a Strong Offense: Target While Target could have done more to prevent the data breach in late 2013, the company has staged a strong offense to restore customer trust. The company was a victim of a 19 day security breach in which credit and debit card information of 40 million customers and personal information of 70 million customers was stolen. A day after the breach was announced, the company released an acknowledgement and has since been working with federal investigators, investing in cybersecurity education and offering customers free credit monitoring and identity theft protection. In addition, Target is speeding up its plans to introduce chip-enabled technology in stores to boost security. A section of its website is dedicated to explaining the event to customers. Power of a Clear Positioning: PwC PwC’s reputation with UK regulators took a dip in 2011, when a House of Lords criticized the auditor for its role in the financial crisis. The firm responded by acknowledging the lack of trust in the industry, appointing a head of reputation strategy and positioning itself as a part of the conversation - and the solution. Already a strong content creator and thought leader, PwC is using these strengths to position itself as leader in addressing the lack of trust plaguing its own industry and its clients. 76 The Future of Reputation
  • 77. Power of Cultural Leadership: GE A decade ago, GE was known as a leading polluter. The company has since transformed itself to a leading clean technology provider. Since 2005, GE has committed large investments to building ecomagination and Healthymagination – ranges of sustainable eco products and affordable health products. GE also launched open innovation challenges and entrepreneurship programs to support innovation internally and externally. The company engages people around these programs with short visual content packets, optimized for quick consumption on social networks. GE has an audience of 1 million on Facebook. Strong leadership, open innovation, philanthropy efforts and participatory programs have boosted GE to one of today’s leading global brands. 77REPUTATION MANAGEMENT | From Ignition to Recovery: The Components of Today’s Crises
  • 78. Components of a Reputation Recovered When it comes to crisis, it’s not a question of just ‘if’ and ‘when,’ but also ‘how.’ How will you diminish the chances of a reputation crisis? How will you respond when one hits? From the many cases mentioned above, it’s clear that strengthening and recovering reputation is about… • Changing the system – doing the right thing, standing for a purpose, from the start. • Realizing that everything is connected – and that people already know it. • Being empathetic – people are not numbers, they’re individuals. • Being mindful – some people may not be influencers today, but they very well could be tomorrow. It’s also about being realistic and knowing when to give in to people’s demands. As Ellen DeGeneres poignantly observed at the Oscars: Tonight, there are so many different possibilities. Possibility number one: 12 Years a Slave wins Best Picture. Possibility number two: You’re all racists! 78 The Future of Reputation
  • 79. How to Manage your Reputation in the Social Age Establishing a great reputation used to be a slow moving exercise – it was more akin to the turtle than the hare. Sure, there have always been extreme instances in which respected brands have taken major hits from huge crises – think the Tylenol scare of the 1980s – but by and large it has been possible to control and sustain reputations if a company had a great product and a consistent and compelling branding and communications strategy. Merrill Freund MD, San Francisco, MSLGROUP 79REPUTATION MANAGEMENT | How to Manage Your Reputation in the Social Age
  • 80. 80 The Future of Reputation In the era of social media, short attention spans and one click hops, this isn’t the case anymore. With 500 channels, thousands of blogs and billions of Tweets, how important do the New York Times, CNN or Advertising Age remain for maintaining a pristine image? For example, a few years ago, Internet and cable TV provider Comcast received notoriety and fame when service problems on its network were the subject of on-going attacks on Twitter after which they developed a rapid response to address these damaging tweets. Companies are adopting influencer programs to drive greater user integration into communications programs. While not overtly co-opting users, it demonstrates the new focus on “Dave the Geek from Orlando” rather than David Pogue as the taste masters driving the brand and reputation.
  • 81. 1) Don’t throw out the baby (let alone the bathtub) with the bathwater Unless 2 million readers a day mean nothing, The New York Times is going nowhere (even if they are giving away millions of dollars a year due to a lack of a cohesive online monetization strategy) and what they publish still matters. Ignore them at your peril. 2) But it’s not just a game of volume – focus counts. A review of an online coupon site on the Huffington Post is great but a mention in a mommy blog with only thousands of subscribers can be even better since they are all socially vocal. 81 3) Whether Verizon wants to hear this or not, churn is inevitable in almost every industry. Losing a customer happens in less time than it takes to read this sentence. It’s the price you pay in an online world – your competitor is only one click away so any micro-change to your brand, reputation or experience and a loyal customer could be gone. Learn to take this in stride and better anticipate your customers’ expectations and reactions. 5 Rules to Managing your Reputation in the Social Age So given this new state of conventional wisdom, what rules should you apply to maintain, improve or change your reputation or brand? Here are five to consider. REPUTATION MANAGEMENT | How to Manage Your Reputation in the Social Age