Q: How do you define “Corporate Reputation” and why is it so important to today’s business leaders?
Q: Why did you write this book now?
Q: What’s different about your book?
Q: What is the Reputation Recovery Model described in your new book?
Q: What surprises did you uncover during your research for the book?
Q: How long does it take a company to recover its reputation today?
Q: What are the primary triggers that place a company’s reputation in danger today?
Q: What triggers stand out as the greatest threats to reputation in the future?
Q: What can companies do to safeguard their reputation and repair a damaged reputation?
Q: How should companies manage their reputations online when negative news or rumors are spread?
Q: What role does the CEO play in recovering and safeguarding reputation?
Q: Who were your sources for this book?
Q: Is Corporate Reputation just for Fortune 500 CEOs?
Q: What do you want readers to learn from this book?
Q:
One last question. Why
12 steps and not 11 or
13 steps?
Q: How do you define “Corporate Reputation” and why is it so important to today’s business leaders?
A: The term “corporate reputation” refers to how positively, or negatively, a company or similar institution is perceived by its key stakeholders such as employees, customers, members of the media, investors, NGOs, suppliers and financial analysts.
We can all agree that financial statements do not accurately reflect the value of a company’s intangible assets such as customer relationships, talent, innovation, patents and reputation. Intangible assets such as reputation are now central to company competitiveness and profitability. As former Federal Reserve Chairman Alan Greenspan said: “In today’s world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward.” Corporate reputation is so important that global business executives surveyed in Weber Shandwick’s Safeguarding Reputation™ with KRC Research estimated that it contributed to 63 percent of a company’s market value.
The value of a good reputation continues to grow largely because of the competitive advantage and market differentiation it delivers — higher sales generated by satisfied customers and their referrals; relationships with the right strategic and business partners; ability to attract, develop and retain the best talent; benefit of the doubt by stakeholders if crisis strikes; spread of positive word of mouth; potential to raise capital and share price; and in some cases, the option to charge premium prices. Also, in an age of regulatory watchdogs, a positive reputation can improve relationships with government officials and regulators.
Q: Why did you write this book now?
A: I’ve researched company reputations for more than 20 years and noticed that interest in reputation, and the value it has been given by both business audiences and the general public, have grown immensely. This attention has grown even more intense since the publication of my first book, CEO Capital: A Guide to Building CEO Reputation and Company Success. In fact, media coverage of reputation alone has increased 108 percent over the past five years. Reputation management is now considered a legitimate body of knowledge, with a number of emerging new disciplines, including reputation recovery. Also, the sheer number and severity of corporate falls from grace in the last few years — coupled with the emergence of revolutionary ways of transmitting information, influential micro-constituencies and widespread mistrust of business — have magnified the need for a viable framework for the repair and recovery of damaged company reputations.
My interest in writing this book is also rooted in my firm belief that every organization deserves the opportunity to redeem itself and that in many cases, second-act performances can surpass the first.
Q: What’s different about your book?
A: Corporate Reputation holds a unique position in the marketplace because only a very small percentage of available reputation management resources is devoted exclusively, and in such detail, to corporate reputation recovery. Corporate Reputation also distinguishes itself from other leadership resources because it’s built around a proprietary, research-based model that can be applied to any company, regardless of its size, industry or region.
Q: What is the Reputation Recovery Model described in your new book?
A: The book’s four-stage Reputation Recovery Model includes 12 steps:
Stage 1: Rescue: (Take the Heat — Leader First; Communicate Tirelessly; Don’t Underestimate Your Critics and Competitors; and Reset the Company Clock)
Stage 2: Rewind: (Analyze What Went Wrong and Right; and Measure, Measure and Measure Again)
Stage 3: Restore: (Right the Culture; Seize the Shift; and Brave the Media)
Stage 4: Recover: (Build a Drumbeat of Good News; Commit to a Marathon, Not a Sprint; and Minimize Reputation Risk)
The steps in the Reputation Recovery Model aren’t set in stone and can be reordered and customized to suit the one-of-a-kind needs of the individual, company, organization and situation. Yet, the steps cannot be ignored.
Q: What surprises did you uncover during your research for the book?
A: I knew there had been a growing stumble rate among the world’s most admired companies but I was surprised the rate was so high. Over one-half (52 percent) of number one America’s most admired companies in their respective industries lost their crowns five years later (2002 to 2007). The figures are even more compelling when we examined the world’s most admired companies — 79 percent of industry leaders in 2002 were not most admired in 2007. Looking ahead, companies that lead their industry today have much less than a 50/50 chance of being most admired five years from now.
I also did not expect that so many of today’s global business executives surveyed in Weber Shandwick’s Safeguarding Reputation, whose findings are featured in Corporate Reputation, would underestimate the negative impact on company reputation from high CEO compensation, online attacks or rumors and bench strength turnover.
Q: How long does it take a company to recover its reputation today?
A: What has been proven time and again is that reputation recovery is neither easy nor short term. As revealed in Corporate Reputation, reputation recovery is perceived to take approximately three and one-half years, with it taking 3.2 years in North America, 3.6 years in Europe and 3.5 years in Asia. In addition, executives believe that repairing reputation is six times harder than building reputation.
Q: What are the primary triggers that place a company’s reputation in danger today?
A: According to global business executives, leading triggers of reputation failure are financial irregularities, unethical behavior and executive misconduct — all issues that could be prevented if companies had better controls in place. Other frequently mentioned strikes against reputation are security breaches, environmental violations, and health and safety product recalls. Interestingly, the latter reputation threat about product recalls surfaced in our research prior to the recent rash of product recalls that dominated headlines this past year.
Unfortunately, despite hard-hitting media and blogosphere coverage, and in some cases severe consequences for any wrongdoing, many key triggers continue unabated. What is interesting is that many of the reasons causing companies to suffer reputation loss are self-inflicted.
Q: What triggers stands out as the greatest threat to reputation in the future?
A: Online scrutiny and exposure pose the greatest challenges for effectively managing company reputation in the future.
Q: What can companies do to safeguard their reputation and repair a damaged reputation?
A: One of the most effective strategies for protecting corporate reputation is creating an early warning system that detects and tracks potential threats, and provides response-related policies and procedures, before the threat matures into a full-blown crisis. Giving in to the natural tendency to believe that a potential problem will dissipate over time has proven to be a fatal mistake for far too many companies. As the Internet has shown us, company crises live forever and are nearly impossible to erase.
Regularly and consistently communicating internally the importance of corporate reputation, and the company’s commitment to protecting it, is also important in ensuring that a positive reputation remains a priority for all employees and a core feature of the corporate culture.
The best steps to beginning the reputation recovery process range from having the CEO announce specific actions the company will take to respond to the problem, tireless communications through a wide variety of external and internal channels and a comprehensive re-examination of company culture and its commitment to corporate responsibility. A recovery strategy that continues to grow in importance, especially since September 11, is the use of the corporate web site to relay information, progress and updates about company actions.
In addition, companies can safeguard their reputations by making sure that they have the right executives, employees and board members asking the tough questions and listening carefully to budding marketplace tremors.
Q: How should companies manage their reputations online when negative news or rumors are spread?
A: Company reputation can be easily crushed by online innuendo or misinformation. Companies need to regularly monitor the Internet for what is being said about them, their competitors and industry. Managing reputation online should extend beyond what companies are measuring offline in the regular course of business.
Above all else, companies should be doing the right thing in the first place to earn the benefit of the doubt when crisis inevitably strikes and provide them with a softer landing for reputational falls from grace.
Q: What role does the CEO play in recovering and safeguarding reputation?
A: CEOs increasingly find themselves in the spotlight during crises and are without question a strategic player in reputation recovery. Their success managing reputational difficulties is one of the determining factors in whether stakeholders retain confidence in the company and believe that reputation will eventually be restored. For this reason, failure to maintain a good reputation rests squarely on the CEO’s shoulders. As described in the book, nearly 60 percent of the blame is attributed to the CEO when crisis strikes.
As the company’s public face during times of crisis, and the company’s chief reputation officer, the CEO should remain visible, and communicate honestly, transparently and proactively. CEOs must also present themselves to stakeholders, whether it is customers, financial analysts or employees, consistently with the company’s vision, code of conduct and values. By taking responsibility, acting quickly and compassionately, listening carefully, and establishing clear priorities, the CEO can set an example for reputation recovery for the entire organization.
Q: Who were your sources for this book?
A: I relied on several sources when writing Corporate Reputation. As part of my position at Weber Shandwick and while writing this book, I met with CEOs, communications professionals and other senior executives around the world. Without revealing any confidences, I learned more about the many successes and challenges that come with building and restoring reputation. I also drew upon Weber Shandwick’s proprietary research, publicly available secondary research, and the counsel and insights of my colleagues.
Q: Which do you consider to be the most important of all the steps included in Corporate Reputation’s recovery model?
A: Although each step plays its own unique role in a company’s successful journey back to reputational health, “Communicate Tirelessly” and “Seize the Shift” stand out as the two that respond especially well to today’s reputation challenges. Post-crisis communications that strike the precise balance in terms of tone, content and frequency — and are aligned with the prevailing environment and the latest business shifts and trends online and offline — rank among a company’s strongest strategies for reputation recovery.
Q: Is Corporate Reputation just for Fortune 500 CEOs?
A: The book is a valuable resource not only for leading CEOs and other leaders but also for corporate boards, communications and marketing professionals, compliance and ethics officers, management consultants, rising executives, entrepreneurs, academics and students. Everyone with a stake and interest in leadership and reputation will find it useful.
Q: What do you want readers to learn from this book?
A: Among the learnings that I’d most like to leave with readers is that there are very few absolutes in business today, but when it comes to reputation, three facts are indisputable: No reputation is bulletproof, no company can afford to be reputation-blind, and no suit of armor is impenetrable to completely and indefinitely protect reputation. Readers should also understand that the job of managing reputation ultimately belongs to the CEO and that in the years ahead, reputation will only be more complex and all-encompassing to manage successfully. However, by staying on guard against threats to reputation, and having a recovery strategy in place should damage occur, companies can reap the full range of rewards that flow from a positive reputation.
Q: One last question. Why 12 steps and not 11 or 13 steps?
A: The recovery steps just worked out to be an even dozen. There is, however, leeway in how many steps to follow. After all, it is not as if some steps could not be combined and others divided. No disparagement was intended to any other number!
