There is constant research in the VUCA reputation field with some every interesting results coming forth for Reputation and Crisis Managers alike.

What I advise clients is to determine the golden thread i.e. the patterns and messages these research results reveal.

It is interesting to read what VUCA holds for Crisis Managers as depicted in this article: “What VUCA Really Means for You” by Nathan Bennett and G. James Lemoine  from the January–February 2014 Issue of the Harvard Business Review;  in which they warn against using VUCA as a crutch, a way to throw off the hard work of strategy and planning—after all, you can’t prepare for a VUCA world, right?

The term VUCA is, short for volatility, uncertainty, complexity, and ambiguity.

In the guide to identifying, getting ready for, and responding to VUCA events they have this to recommend about Uncertainty. “Invest in Information. Collect, Interpret and share it.

So, this is exactly what I am doing with my latest roundup that adds value to this conversation:

Research Results

Research Study 1: Disruptive technology will Impact Reputation in the Future.

Deloitte’s 2018 CEO and board risk survey explored leaders’ risk posture and their level of readiness across these four strategic risk areas—brand and reputation, culture, cyber, and extended enterprise. They found that 400 CEOs and boards agree that threats are on the horizon, but they are not managing them in a strategic way nor are they prioritizing the right investments needed to identify, respond to, and mitigate these risks.

Key highlights from the survey:

•  Disruptive technologies and cyber threats ranked as the top risks
• Leaders are prioritizing investments in cybersecurity and technology acquisitions while under investing in culture and brand and reputation
• While CEOs and boards are risk-aware, they are not risk-prepared
• And as the risk interconnections deepen, leaders are tackling strategic risks in silos

I wrote about this observation in some of my blog posts. In one leading telecommunications company I found that the person responsible for corporate affairs did not serve on the Risk Committee which resulted in her responding to incidents post-event.

Research Study 2: Purpose Drives Reputation.

In my workshops I always ask at some stage – What is the Vision, Mission and Values of the company – The DNA?

Often participants differ of opinion about this. Many cannot recite nor explain the sense of purpose of the organization.

Now a survey has highlighted the importance of this in building reputation. The 2018 Porter Novelli/Cone Purpose Premium Index survey found that a company’s sense of purpose plays a major role in its overall reputation,as much as 13 percent of the total, and that purpose is one of the three key dimensions of corporate reputation.

While that’s less than the weight given to quality(65 percent) and vision (18 percent), the study’s authors stress its importance, saying that “when it comes to diligently building a reputation, every single point matters.”  The study uncovered a strong link between a company’s purpose score and its overall reputational rank.

Survey respondents also listed the attributes of a company’s sense of purpose that they found important. Corporate responsibility (86 percent) was their first choice, closely followed by caring (85 percent), advocating for issues (81 percent), protecting the environment (79 percent) and giving back to important causes (73 percent).

Research Study 3: Brands with legitimate sustainability claims do better.

The latest Nielsen report “How and Why Sustainability is Gaining Momentum with Customers.“finds that regardless of product category, brands with legitimate sustainability claims do better. For the purposes of this report, Nielsen chose to study purchases of three of the most common fast-moving consumer goods,coffee, chocolate and bath products, because of their differences from each other. What they found was that products with sustainability claims generally outperformed the growth rate of total products in their respective categories.

According to the Nielsen report, “Brands that are able to strategically connect (sustainability) to actual behavior are in a good place to capitalize on increased consumer expectation and demand.” The report adds, that”Sustainability claims on packaging must also reflect how a company operates inside and out.”

In other words, customers want sustainable products from sustainable companies. This includes everything from labor practices to the environmental impact of their production.

Report Release: Reporting ESG Risks – 77 Industry-Specific Reporting Standards.

The Sustainability Accounting Standards Board (SASB) has launched its 77 industry-specific reporting standards for companies to disclose material ESG risks. SASB standards focus on financially material issues because its mission is to help businesses around the world report on the sustainability topics that matter most to their investors.

Although there is much environmental, social, governance (ESG) and sustainability information disclosed publicly, often it can be difficult to identify and assess which information is most useful for making financially-related decisions.

The SASB identifies financially material issues, which are the issues that are reasonably likely to impact the financial condition or operating performance of a company and therefore are most important to investors.

Sustainability accounting reflects the management of a corporation’s environmental and social impacts arising from production of goods and services,as well as its management of the environmental and social capitals necessary to create long-term value.

It also includes the impacts that sustainability challenges have on innovation, business models, corporate governance, reputation and vice versa.

Five Broad Sustainability Dimensions

The SASB’s sustainability topics are organized under five broad sustainability dimensions: 

1. Environment. This dimension includes environmental impacts, either through the use of nonrenewable, natural resources as inputs to the factors of production or through harmful releases into the environment that may result in impacts to the company’s financial condition or operating performance.
2. Social Capital. This dimension relates to the expectation that a business will contribute to society in return for a social license to operate. It addresses the management of relationships with key outside parties, such as customers, local communities, the public, and the government. It includes issues related to human rights, protection of vulnerable groups, local economic development, access to and quality of products and services, affordability, responsible business practices in marketing, and customer privacy.
3. Human Capital. This dimension addresses the management of a company’s human resources (employees and individual contractors) as key assets to delivering long-term value. It includes issues that affect the productivity of employees, management of labor relations, and management of the health and safety of employees and the ability to create a safety culture.
4. Business Model and Innovation. This dimension addresses the integration of environmental, human, and social issues in a company’s value-creation process, including resource recovery and other innovations in the production process; as well as in product innovation, including efficiency and responsibility in the design, use phase, and disposal of products.
5. Leadership and Governance. This dimension involves the management of issues that are inherent to the business model or common practice in the industry and that are in potential conflict with the interest of broader stakeholder groups, and therefore create a potential liability or a limitation or removal of a license to operate. This includes regulatory compliance, risk management, safety management, supply-chain and materials sourcing, conflicts of interest, anti-competitive behavior, and corruption and bribery.

These dimensions tie in with the drivers of Corporate Reputation as used in the Reputation Institute’s and other leading research organisation’s survey methodologies.

Sustainability is seen as a driver (dimension) of Reputation and these standards now provide companies and investors around the world with codified, market-based standards for measuring, managing and reporting on sustainability factors that drive value and affect financial performance.

Takeaways

1. Be careful of managing risks in silos. Risk interconnections are certainly deepening.

2. Can organizations really afford to ignore “Reputation Risks”? Reputation is amorphous and what these studies show is that ESG can no longer be ignored. It is now mainstream and definitive for Corporate Reputation.

3. Be prepared. Your DNA, your purpose and your sustainability efforts will be tested by stakeholders.

The post My Recap of an Ever-changing Reputation VUCA Landscape appeared first on Deon Binneman.

Stakeholders expect it. And smart companies are doing it: integrating their reporting of financial and nonfinancial performance in order to improve sustainable strategy.

How can managers better identify, describe, and confront the issues of environmental and social sustainability that their companies increasingly encounter? One answer is One Report, a method of integrating information about financial and nonfinancial performance into a single, jargon-free document.

HBS senior lecturer Robert G. Eccles and coauthor Michael P. Krzus explain the benefits and value of the One Report method. Plus: book excerpt from One Report: Integrated Reporting for a Sustainable Strategy.

One Report: Better Strategy through Integrated Reporting

Leslie Gaines-Ross, Chief Reputation Strategist of Weber Shandwick, commented in the article that "In today’s multi-stakeholder and multi-channel society, CEOs are increasingly concerned about reputational risk, both for their company and themselves. Now is the time for CEOs to carefully explain their companies to stakeholders, engage in productive two-way conversations, and clearly communicate their contributions to the market and society.

If stakeholders are left on their own to unify all the information they need about an enterprise, companies could find themselves vulnerable to misinformation and hearsay and put their reputations at risk."

Just reading this quote also defines a new look at the use of social media in an organisation. How to integrate not just reporting but two-way conversations with stakeholders. And, the importance of integrating reporting and use of social media into a company’s strategic communications plan.

Interesting and essential reading for Stakeholder Reputation Managers.

The post Why the One Report is Necessary – It Speaks With One Voice to All Stakeholders appeared first on Deon Binneman.

The following story was shared years ago with me (Caveat- I cannot remember who) but it is worthwhile considering the discussions at Copenhagen.

In the year 2009, The Lord came unto Noah, who was now living in the USA and said, "Once again, the earth has become wicked and over populated and I see the end of all flesh before me.

Build another Ark and save two of every living thing along with a few good humans."

He gave Noah the blueprints, saying, "You have six months to build the Ark before I will start the unending rain for 40 days and 40 nights".

Six months later, the Lord looked down and saw Noah weeping in his yard….. but no ark.

"Noah", He roared, "I’m about to start the rain! Where is the Ark?"

"Forgive me, Lord," begged Noah. "But things have changed. I needed a building permit. I’ve been arguing with the inspector about the need for a fire detection and sprinkler system. My neighbours claim that I’ve violated the neighbourhood zoning laws by building the Ark in my yard and exceeding the height limitations. We had to go to the Development Appeal Board for a decision.

Then the Government and other stakeholders demanded a bond be posted for The future costs of moving power, trolley and other overhead obstructions, To clear the passage for the Ark’s move to the sea. I argued that the Sea would be coming to us, but they would hear nothing of it.

Getting the wood was another problem. There’s a ban on cutting local Trees in order to save the Giant Spotted Owl. I tried to convince the environmentalists that I needed the wood to save the owls. But no go!

When I started gathering the animals, I got sued by an animal rights group. They insisted that I was confining wild animals against their will.

As well, they argued the accommodation was too restrictive and it was cruel and inhumane to put so many animals in a confined space.

Then the Department of Environment Affairs ruled that I couldn’t build the Ark until they’d conducted an environmental impact study on your proposed flood.

I’m still trying to resolve a complaint with the Human Rights Institute on how many previously disadvantaged individuals I’m supposed to hire for my building crew.

Also, the trades unions say I can’t use my sons. They insist I have to hire only Union workers with Ark building experience.

To make matters worse, the Customs and Revenue seized all my assets, claiming I’m trying to leave the country illegally with endangered species.

So, forgive me, Lord, but it would take at least ten years for me to Finish this Ark."

Suddenly the skies cleared, the sun began to shine, and a rainbow Stretched across the sky. Noah looked up in wonder and asked, "You mean you’re not going to destroy the world?".

"No", said the Lord. "The Government beat me to it!"

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