Two interesting research studies results came out the past week.

The Reputation Institute (RI), released the results of the World’s Most Reputable Companies 2018 survey, the company’s annual Global RepTrak® 100 (RT100) rankings. The 2018 RT100 is  the world’s largest corporate reputation study of its kind. The RT100 is based on more than 230,000 individual ratings collected in the first quarter of 2018. It includes comparative rankings, demographic trends, and unique insights into the dynamics behind reputational impact.

The global study shows what drives trust and identifies supportive behaviors such as intent to purchase a company’s products, willingness to invest in, or even work for, the company.

The rankings drop for 58 percent of companies surveyed shows there has been a decline in trust and ultimately reputation. The results show that garnering support among stakeholders has become more difficult; that expectations have risen, making it harder to earn trust, attain benefit of the doubt, create consumer loyalty and entice investors.

I have a name for that – Stakeholder Reputation risk and defined it clearly in this post of mine.

The Reputation Institute researches the world’s most reputable companies. By tracking and analyzing stakeholder perceptions, they enable leaders to build better companies. The RepTrak® model analyzes the reputations of companies and is best known as the Forbes-published Global RepTrak 100.

Underlying the model is the RepTrak methodology, the global gold standard for measuring reputation. Learn more at: http://www.reputationinstitute.com.

On their website, the RI shares some key trending components worth noting as best practices for organizations aiming to boost their own reputation.

These include the need for the CEO to communicate authentically and the need to proactively navigate social issues, i.e the need for issues management will increase.

In another study, The Harris Poll RQ®; Amazon took the top spot. The 2018 Harris Poll Reputation Quotient Rankings identifies the 100 most visible companies identified by U.S. consumers and ranks these companies based on their reputation in six different categories: Emotional Appeal, Products & Services, Social Responsibility, Vision & Leadership, Workplace Environment, and Financial Performance.

The Reputation Quotient is “technically designed to understand how a company is perceived in modern culture.” The measure takes the top most visible companies (for good or bad reasons) and evaluates them across six dimensions of corporate reputation attributes to arrive at a corporate reputation ranking. If a company is not on the list, it does not necessarily suggest that they have either good or bad reputation, but rather they didn’t reach a critical level of visibility to be measured. While other models measure reputation in a vacuum, the RQ® starts fresh each year by surveying the public’s top-of-mind awareness of companies who either excelled or faltered in society.

Disney ranked high at No. 5, and Netflix, at No. 21, beat out fellow tech giants Google and Apple, ranked Nos. 28 and 29, respectively. Read the full release in PR Newswire.

The Weinstein Co., which has been embroiled in executive Harvey Weinstein’s alleged sexual assault scandal, and Takata, with its infamously defective airbags, came in last on the list at Nos. 99 and 100, respectively.

In the Forbes article – The World’s Most Reputable Companies 2018 the example is cited of Apple plummeting 38 spots to No. 58 on the 2018 RT100—a fall explained by various incidents involving ethical behavior, fairness, product value and transparency (alleged battery tampering, encryption conflict etc.)

The Forbes article has some clear and interesting advice for Apple on the matter.

Reputation impacts either positively or negatively in the minds of stakeholders, whether management likes it or not.

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More and more issues are emerging that are affecting reputation. These include sexual misconduct in the workplace, state capture, diversity, inclusion, corruption, fake news, power politics, cyber risk and school safety.

The phrase ‘STATE CAPTURE’ was awarded ‘word of the year’ by eNCA who claims the phrase was used more than 20,231 times in over 11,000 South African newspapers. The saga certainly points to lobbying being taken to a new level, and the misuse of power and influence. The #GuptaLeaks scandal has resulted in widespread turmoil, annihilating and, embarrassing organisations and individuals and who knows what will emerge from the continuing investigations.

Rogue Professional Services firm Bell Pottinger certainly dented the PR Industry’s Reputation, and its demise has certainly hastened the adoption of the Helsinki Declaration.

The Helsinki Declaration is a set of principles aimed at uniting the global PR industry under a single banner of ethical behaviour. It calls on members to stand by the 10 principles including to observe the highest professional standards in the practice of public relations and communications. I hope PR companies have shared this with their staff members and will include adherence to it in performance reviews.

The fallout from the Weinstein sexual misconduct revelations has resulted in the #MeToo campaign which hit worldwide mainstream headlines with more and more people coming to the fore with facts and allegations.

Even Weber Shandwick has recruited Tai Wingfield, corporate communications chief of the Center for Talent Innovation, to run its newly formed diversity, equity and inclusion practice.

The firm says that strategies it will employ include: raising awareness and understanding around the business case for diversity; navigating culture change and transformation; communicating around complex social issues and demonstrating an organization’s commitment to advancing DEI. “We are integrating our world-class expertise in employee engagement, corporate reputation, social impact, high-impact marketing programs and the DEI landscape to help clients deliver on this important opportunity,” said WS CEO Andy Polansky.

Unfortunately getting involved in highly charged political and social issues, come with risk as this leading article “CEOs Choose Sides on Gun Control at Their Own Risk – CEOs feel pressure from younger, digitally savvy consumers and from employees to take a stand on issues, but corporate reputation can suffer” point out.

What is your take on Gun violence? And your company’s view on it? What are you saying to your clients?

Safety and Security is part of Crisis Planning, Issues Management and Compliance and can most certainly impact Reputation.

Reputation Risk research shows that reputation damage is often caused by poor leadership, lack of compliance and culture issues. Various disciplines are involved in managing these domains and a way should be found to overcome silo management and centralize reputation management. One way is to form a Reputation Risk Committee whose sole aim should be to protect trust, integrity and brand reputation. Mail me for a suggested structured agenda for such a committee to follow.

Since many reputation risks emerge in the “personality” part of an organisation – the culture of the organisation it is therefore imperative for OD and PR experts to work closely together if you want to create a robust reputation risk assurance framework for an organisation. For instance compliance to Sarbanes-Oxley and various corporate governance codes are essential but if the culture of the organisation is one of being unethical, not stakeholder focused and inward focused, then gaps will occur.

Decision-making remains a problem in South Africa. There seems to be a real lack and grasp of looking systemically at issues. The Life Esedemi court case has really exposed a lack of caring, attention and monitoring by Government officials.

The cold and ruthless behavior and lack of compassion and accepting accountability by the Former Gauteng Health MEC Qedani Mahlangu is an example of the necessity of OD practitioners to do more work on corporate culture, coaching of leaders and internal communication.

I cannot believe that I wrote this in August 2012 but the message “Executives Need to Learn a New Style of Decision-making” certainly resonates with what is happening in the country, me thinks – What do you think?

A good read in this regard is the article What Are the Real Lessons of the Wells Fargo Case? From Harvard Business School Working Knowledge.

Reputation drives sustainability not just profitability. Brands no longer have the option to be silent on divisive social issues, according to the fourth iteration of FleishmanHillard’s Authenticity Gap report, but it comes with risk and opportunity.

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21 Years in Private Practice I celebrated 21 years as an independent reputation management consultant, trainer and speaker on the 1st April. In this period I worked with more than 200 organisations and had the pleasure to facilitate capacity building programs in 16 countries. I am at your service. Check out my work on my website www.deonbinneman.com

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I was quoted in an article in the Finweek mag of 23 February “How to manage your own reputation – Your Reputation is your most important asset. Don’t squander it”. It was also translated into Afrikaans in the Beeld newspaper Page 18

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Being well informed and able to anticipate issues and incidents are two vital skills for any budding Reputation Manager. So is the ability to see linkages between seemingly unrelated incidents and issues.

This process I call dot connecting. It has its origins in systems thinking.

Since December 2016 I have received countless of emails with consultant and expert predictions and trends analysis. Here is my analysis of the “common threads”. Hopefully I have connected some dots for you.

Lack of Trust

Lack of Trust will increase. In a world where fewer and fewer organisations and individuals, TRUST politicians, corporations and the processes that create our lives, some companies and individuals will realize that they have to act responsible and become model corporate examples.

The divided landscape in SA and the US clearly illustrates the need for stakeholder identification, earlier engagement and more robust trust building.

Other studies show that cconsumers listed trust and good service as the biggest factor influencing the reputation of companies. The rise of social media has also helped to amplify customers’ feedback, giving rise to a new kind of public accountability. Think VW and medicine such as the Ancel Keys revelations.

The 2017 Edelman Trust Barometer has revealed that the South African population’s trust in its government, media and business, is in steady decline. The barometer, which measures peoples’ trust in four institutions – government, media, business and nongovernmental organisations (NGOs) – has revealed that above-average levels of fear about corruption, immigration and the erosion of social values are having an impact on the way South Africans perceive their country.

Ways and means to build and restore trust in organisations will become a top priority.

Attempts to Improve Trust will escalate

Attempts to engender trust through corporate social investment, transparent reporting and stakeholder engagement will increase. Unfortunately this will be of little help unless there is change in listening practices and concrete actions. In the South African context lack of listening is epitomised by contant burning of tires by communities, changes in political management at municipal levels and heightened security practices at Parliament level.

In many industries stakeholders will take management teams to task and these companies will face an uphill battle to respond timeously to stakeholder demands, activist actions and public opinion. Some companies will realise that they need to go beyond the obvious and demonstrate real commitment to sustainable transformation, especially in the Southern African context. In general, companies will need to heighten their stakeholder communication and engagement practices.

The Rise of 3rd Party Social Auditing

The demands for social and environmental audits of corporate reports, codes and practices will increase and stakeholders will no longer be happy with just being told. They will want proof  and will demand independent auditing (Example – annual ISO audits) and verification of responsible citizen behaviour, accountability, transparency, governance and reputation building practices.

Companies will need to work closer with stakeholder experts and auditors. Studies like The Harris Poll Reputation Quotient, measures public opinion of the US most recognizable companies and respondents are asked to rate companies based on six components: emotional appeal, products and services, vision and leadership, workplace environment, social responsibility, and financial performance. These areas reveals the companies with the best (and worst) reputations.

In the South African environment there are a number of organisations providing research services in this important fact finding exercise.

Crises will Increase due to Heightened Scrutiny

More and more companies will incur crises simply because their risk, stakeholder and auditing departments are not doing a proper job to uncover both tangible and intangible risks.

As it stands, the fallout from the Gupta state capture issue is still reverberating. How come the misuse of “power” and “influence” was only detected so late? Who is next in South Africa? Whose job responsibility is it anyway to guage thought leadership, and the undue influence of power? Surely the In-house Stakeholder Relations experts should have reported on this?

Media outlets will report new allegations about improper behaviour by CEO’s and CEO’s will be even more scrutinized than in the past. Some of this reporting may be fake news. CEO’s will realize that their decision-making approaches and ethical behaviour need re-evaluation, and that stakeholder reactions and expectations will have to be taken into account. The use of strategic communication interventions and platforms using the CEO will become vital.

Crisis Communication Preplanning will become more important

Crisis Communication Preplanning will become more important. Budgeting for enhanced security will become an ongoing additional cost moving forward and needs to be taken seriously as anyone who doesn’t believe that events that took place in Paris and other European locales couldn’t take place in other countries is sadly mistaken. Already the SA Government has intercepted suspicious individuals with terrorist ties at our borders.

The increased security may cause delays in events for instance and communication with customers will be necessary to educate them to be vigilant and understand threats without scaring them. Not everyone will automatically understand your messaging and constant reeasearch on the efefctivesness of security communication will be necessary.

The poor handling of the Ford Kuga recall illustrates the need for more time to be spent by management teams on brainstorming and preplanning for crises. Thought processes, actions and protocols should be examined and tested BEFORE events happen. BUT, what about restoration of trust and reputation AFTER a crisis?

What happens after a recall or crisis? How does the business recover? How does a company manage the impact on its employees, its customers, and its reputation? The truth is, after the event, the work – the hard work – really begins. Designing an approach that focuses on the impact of an event and subsequent of trust is quite different and requires a different approach than designing a plan that focuses on the initial occurrence of the event. Both processes are different and will deserves much thought.

Cybersecurity risk will increase

Cybersecurity risk is a growing concern, Crisis practitioners will need to prepare for potential data breaches and other cyber-threats and the reputation risk it may bring. An article “Businesses Fear Brand Damage More Than Security Breaches – Organizations struggling with risk management are more concerned about brand damage than cyberattacks, a new Ponemon study shows. Can you afford to ignore cyber security? An article in the Financial Director asks.

The Velocity of Social Media will continue

The velocity with which information flows will continue to catch executives by surprise. Deloitte reports in an article “Explore 10 trends shaping the future of risk” – Analysis: Reputation risks accelerate and amplify” that in today’s hyper-connected world dominated by mobile devices, social media, and evolving expectations from society, information can spread like wildfire. This convergence of mobile and social media is intensifying the impact of reputation risks for organizations and is driving them to fundamentally rethink their approaches to risk management and proactively address these accelerated, amplified risks.

Already the IoT (Internet of Things) predictions are heating up. In an article by HP  Futurists Explain Why Technology Will ‘Disappear’ in 2030 there is a quote that illustrates the increased use of big data in our lives- “Humans aren’t the best at understanding or mitigating risks.”

The Rise of Fake News

A recent study by Dr. Jonathan Albright of Elon University, show that there is significant concern about the destruction of reputations through fake news sources. Add in the recent explosion of online rating websites and the need for public relations professionals to actively work to protect brands is even more apparent. There is little doubt this phenomenon will continue to be a growing challenge. It cannot be solved with one-click algorithms from “IT firms” who send out generic responses to complaints. Rather, this new reality requires thoughtful consideration from communications professionals.

Your organisation will have to reevaluate its website and ways in which it shares information, to ensure that you are a trusted news source. Read this article “5 Key PR Trends to Watch in 2017” for additional thoughts on this.

No company will be immune from its Industry’s reputation

That’s why Stakeholder engagement and collaboration is key even between competitors. Industries have their own reputations and an industry can certainly affect a specific company’s reputation, either positively or negatively. The BP Gulf of Mexico was an oil industry disaster not just a BP disaster. However, while industry reputation is a factor, a company’s reputation can still be traced to its practices. Companies with terrible reputations are hated in large part for behaviors many consider reprehensible. Whether its gross environmental violations, perceived corruption, or consistently abysmal customer service, these companies have earned their poor reputations. However companies can transcend their industry’s reputation by positioning themselves differently and paying attention to those things abhorred by stakeholders. What is a common driver is that of quality customer service. Direct contact with a company plays a far bigger and direct impact role than the media yet most companies still favor the PR/Media Relations approach.

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Last week I had the opportunity to present at the Marcus Evans Chief Series : Power Pairing of CEOs & CFOs, at the One and Only Cape Town Hotel.

Facing an audience of more than 55 CEO’s and CFO’s I spoke in particular about CEO Reputation, and how 81% of executives around the world believe it is important for CEOs to have a public presence for their companies to be highly-regarded. These respondents also estimated that 44 percent of their company’s market value and 45 percent of their company’s reputation – that’s nearly half – are attributable to the reputation of their CEO.

This makes the role of the CEO, succession planning and Leadership Development an integral part of your company’s reputation strategy.

I gave the audience tips for the audience on how to raise the profile of the CEO including why CEO’s have to maintain a positive presence – in person and in social media. Example – research shows that these days before people consider doing business with a company, they often quickly research the CEO online and make a strong correlation between the CEO and the company. As Brian Solis tweeted – You will be Googled, Facebooked, Twitter searched & measured by what you share & who you know.

I talked about the importance of telling your company’s story – the good and the bad, the need for authentic humble CEO’s as opposed to celebrity CEO’s, why they needed to become storytellers and active in Social Media. When you share your story – your vision and victories with your customers and shareholders, it helps create and foster that strong, personal bond CEO branding is all about.

I also covered the need for alignment between goals and values, between conduct and actions and alignment between expectations and experiences of stakeholders (Reputation = Experiences – Expectations) i.e. Walk the Talk.

Action Steps

What are you doing to raise your CEO’s Profile? How visible is your CEO? Another important aspect was speaking engagements. Finding your CEO the correct podium is vital, and by that I do not necessarily mean executive podiums. Having a CEO address a local community at an event, even attending a funeral is an opportunity to show the human and humble face of your CEO.

To further understand the importance of leveraging CEO Reputation and storytelling, read this article and view the infographic by Neil Patel How to Engage and Persuade People Through Storytelling. I can also highly recommend the book “Platform – Getting Noticed in a Noisy World” by Michael Hyatt. It provides some excellent social media insights. Also read this Weber Shandwick study for more insight into CEO Reputations.

P.S The latest Freefalling Reputation Stumble Rate update : Weber Shandwick’s annual calculation of reputation loss shows an improvement in the management of corporate reputations and provides some valuable insight into CEO tenure. bit.ly/1n4cpSR @ReputationRx

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