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Social responsibility campaigns from the social media industry?

By Marit Sillavee, Consultant, ReputationInc

A recent study found that social media is more addictive than drinking wine. That in fact, people are more likely to give up a glass of bubbly for an opportunity to check their Facebook account. Probably not a surprise to many but got me thinking about what this means for the social media industry in general.

In a few years’ time, will we have institutions trying to cure the social media addiction? Will we see, in the future, some kind of ‘social responsibility’ programmes from Facebook, for instance allowing only grown-ups to sign up and use the sites and have little note ‘use responsibly’ on social media adverts? Is it time for the social media industry in general to start thinking more about how they could prevent this from happening and avoid their reputation being torn down by health, privacy and human rights activists?

Well, some say the fault lies with people themselves. That people are too weak and just too lazy to build willpower to resist temptation. For instance, Jon Henley wrote in the Guardian last week how people with strong willpower in general grow into wealthier and healthier adults and are more likely to achieve success in life (hence, less likely to fall to any kind of ‘weak’ addictions). He brought examples of several studies that have concluded the same, the most amusing one conducted by a sociologist Walter Michel who studied children’s’ behaviour by offering them a marshmallow immediately or two, if they could wait for 15 min. Tracking down the children years later, Michel found that those who had the patience (and willpower) to wait, had become more successful. And there is no chance of accusing bad genes here – apparently willpower is something you can train and become better at.

So, the social media industry, if accused of causing addiction, might just not do anything about it and accuse people of being too weak (although this attitude didn’t work for the tobacco industry). We’ll wait and see…I’m looking forward to seeing some social responsibility campaigns from the social media industry before their reputation gets damaged by those who accuse them of causing addiction.

Why small is better than big

By Anastasia Chernoivanova, Consultant, ReputationInc

I am a voracious filmgoer. After booking the usual weekend treat at my cute local cinema I realised that I bought tickets for the wrong date. ‘No need to worry’ I thought. They are a small business and therefore will probably be quite flexible about these things, I am sure there will be no problem in exchanging tickets - So I told myself.

How naïve I was! Three days, four phone calls, and five pounds of expense later, what should have been a simple process of changing my ticket was finally completed in accordance with “the company’s policy”.
The whole episode reminded me of my three-year-old nephew who is rushing to ‘grow up’ by foregoing the benefits of being young and nimble, and wants to wake up the next morning as a grown-up so that his parents could not tell him what to do. In the mean time he acted the part by copying his parents’ actions.
The question of why small businesses voluntarily forego their potentially ‘natural’ advantages, such as better and more personalised customer service, over their much bigger competitors is puzzling to me.

There are several reasons why small businesses are likely to deliver better customer service than a large company.

Being small means better customer knowledge.  A small company is closer to its customers and requires fewer resources to learn what people want to meet their expectations.  There is simply no need for complicated CRM systems that holds millions of customer records, nor in-depth knowledge of Mosaic classification to identify your customer segments to ‘unlock’ their hidden desires.

Being small also often encourages flexibility. For small businesses, the costs of adapting to volatile market demand and changing consumer preferences are much lower. They could spot a new trend earlier and have the rare luxury of applying common sense over standardised operating procedures.

Last but not the least, being small can facilitate trust. Trust is probably the most valuable asset that a business can possess. At the times of large businesses’ failures and corporate governance scandals, customers lose their faith in huge conglomerates and instead tend to empathise with local companies that have a stake in their community.

While small companies may have ‘natural’ advantages in these customer service areas, it doesn’t mean that they are not facing customer-related reputational risks. In recent years, small businesses have been confronted –most of them unprepared- with the imperative of reputation management. And some have already paid a heavy price for it. Think about small restaurant owners who have seen their bottom line directly impacted by a few bad Tripadvisor reviews.

On the other hand, larger corporations that have more insight on their own reputation might benefit from reconnecting with the strengths of small businesses. Some big companies, such as First Direct, O2, Dell and John Lewis have already successfully managed to cultivate and preserve a ‘small company mindset’ when it comes to customer service. They win consumer trust through understanding their needs and staying flexible.

The lesson for big and small businesses is clear. From the vantage point of customer service, try to preserve and consolidate the advantages of being small, however think big when it comes to your reputation.

Dirty truckers need a reputation turn around

By Maita Soukup, Account manager, ReputationInc

Despite being regarded as the lifeblood of many industries and the backbone of transportation in the UK, the road freight sector is never far from a green politicians’ cheap shot about oil dependence and industry’s resistance to a low carbon economy. 

I was reminded of this last week in Brussels as I listened on while a senior member of the European Commission’s Transportation Cabinet lambasted a room full of fleet owners for their failure to act definitively to reduce CO2 emissions.

The audience, full of success stories and innovative programmes to “go green”, was unsurprisingly disheartened by the Commission’s robust dismissal of its programmes as “piecemeal” and “not strategic”.

So why is it that when it comes to sustainable business, certain sectors’ reputations have been buoyed by their response to the low carbon agenda, while others continue to be painted as fossil-fueling consuming dinosaurs, unwilling or unable to adapt to a new world of declining oil reserves and ambitious carbon reduction targets?

In a word, reputationmanagement.  Industries must confront their not-so-pretty reputation legacies in order to grow, maintain favour with stakeholders, and ultimately maintain their licence to operate. 

Let’s look at how other sectors have tackled similar regulatory challenges, and then conclude with some advice for how road hauliers can think differently about their reputation in order to secure greater understanding and support from government and environmental activists.

Supermarkets & the environment

 Savvy retailers across Europe were amongst the first to recognise post-Copenhagen that they would be on the chopping block once public concern about the environment began to influence consumer purchasing decisions.  While such a shift has yet to be documented, Marks & Spencer’s Plan A is a shining example of a genuine, well-thought through initiative that positions the business as part of the solution, not contributing to the problem.  From simple operational changes to wider supply chain commitments, all initiatives in Plan A makes good business sense as well  as demonstrating low carbon leadership. 

The alcohol industry & binge drinking

The alcohol sector is perpetually under attack from public health officials and NGOs bemoaning a culture of binge drinking.  In the UK TheWine and Spirits Trade Association, working with the support of the country’s alcohol makers, recently side-stepped further regulatory intervention by contributing proactively to the government’s Responsibility Deal. 

The Responsibility Deal aims to tackle public health concerns without heavily regulating industry, and was only possible because alcohol producers were willing to acknowledge their role in the problem, and to become part of the solution.  A commitment to further self-regulation, including tightening marketing restrictions, continuing to fund successful Drinkaware campaigns, and improve server training initiatives all resulted in an alcohol sector which is no longer a scapegoat for politicians trying to explain away binge drinking concerns.

So, what can road hauliers learn from their retail and alcohol counterparts?

First, act early.  The EU is expected to tax trucks based on their carbon output in the next five years.  To avoid this punitive tax policy, fleet industry associations should be looking to find their own version of M&S’s Plan A.  Agreeing a self-imposed CO2 reduction target that is feasible for the industry to meet, would demonstrate goodwill to regulators, and put fleets on the front foot when it comes time to lobby against any crippling taxes the EU might suggest down the road.  Like Plan A, a shared commitment to reducing CO2 emissions in fleets will result in cost savings for the sector.

Second, formalise informal practices and commitments.  The alcohol sector was already following the majority of commitments it made in the Responsibility Deal long before Andrew Lansley took up his role as Health Minister.  When the time came to collaborate with Government, the trade association had a number of ongoing initiatives to package up and present them back to government as an industry-driven “vision” for responsible drinking.  Road hauliers must now do the same thing, and at an EU level.  For instance, the UK the Freight Transport Association’s LogisticsCarbon Reduction Scheme is already yielding successful outcomes, as are programmes across the continent aimed at reducing empty drive time, improving fuel economy, and training drivers to use minimum energy when on the road.  Collecting these shining examples, and presenting them back to the European Commission, will prove the sector’s willingness, and possibly open up new channels for collaboration or funding.

Finally, stop being defensive.  Given the amount of finger pointing and scapegoating the trucking sector endures, it is little surprise that road hauliers may have developed a feeling of healthy animosity when dealing with regulators.  However, as the alcohol and retail experiences demonstrate, changing your reputation with policy makers calls for re-aligning the industry’s aims and objectives to match those of the public good.  In the case of fleets, this means translating business objectives, like reducing fuel bills, into shared objectives, like reducing overall carbon emissions. 

Whether battling fat taxes, fuel taxes, or marketing restrictions, demonstrating shared commitments and setting out timelines to deliver on those commitments is a necessity for any industry looking to improve its reputation and survive periods of heavy regulation and market change. 

A brave new (digital) world?

By Gauri Mahtani, Consultant, ReputationInc

Re-reading my colleague Jonathan’s fascinating insight into the world of Eastman Kodak, I cannot help but smile at the thought of a global business head convincing his audience that he was going to “drive [digital] back into the sea”.

Admittedly, it’s much easier to snigger with hindsight firmly on my side. That global leader was not alone in articulating a prophecy which would eventually prove to be completely off the mark.

In 1943 for example, Thomas Watson, then chairman of IBM, predicted a world market for five computers.

Even more bizarrely (in my opinion at least), in 1962, Decca Recording Company rejected the Beatles, claiming that guitar music was on the way out.

I could go on, but if your interest has been piqued, Wikipedia probably has an entry on incorrect predictions. If you’re really interested in the subject, there’s Facebook, Twitter, YouTube and a plethora of other social media platforms for you to share your views on fallible futurists. The myriad of possibilities which digital technology and the internet have opened up – from the personal to the political – are relatively well known, well understood and well documented.

Which is why last week’s virtual protests against the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) didn’t surprise me. It’s one thing to be prepared for future challenges and opportunities (more on that another day), but what if the future is NOW?

Digitally mobilising grassroots support, in the manner seen last Wednesday, is far from a weak signal or emerging trend. It is a current reality which has major implications on corporations and legislators alike. Which is why proponents of SOPA and PIPA should have seen the protests (and its potential impact) coming.

Thanks to the protests, I spent a very enjoyable lunchtime on Wednesday doing the following:

• Following Guardipedia, the Guardian’s tongue-in-cheek antidote for readers suffering from Wikipedia withdrawal symptoms

• Congratulating myself on figuring out how to circumvent the Wikipedia blackout

• Skimming through countless Facebook posts and Twitter feeds (The most scintillating of which are too rude to repeat)

But I digress. Beyond being gleefully distracted and amused, the protests testify to the changing dynamic of lobbying and campaigning processes, and the increasing role of social media in galvanising grassroots support.

Don’t get me wrong here – I’m not for a moment advocating that legislative processes have previously operated in a vacuum, or that public sentiment and scrutiny or consumer-led activism have not figured prior to the digital revolution.

However, new technologies have undoubtedly amplified the speed, scale and impact of getting one’s message across, reaching out to key influencers and opinion-formers, and galvanising grassroots support in general, with its attendant risks and opportunities. A multitude of new terms have been coined to describe this phenomenon (ranging from social lobbying to e-campaigning and e-activism) and with them have emerged an equally diverse range of perspectives on the effectiveness, ubiquity, cohesiveness and longevity of online activism.

One thing is certain though. Last week’s ‘watershed moment’  could have easily been anticipated, and even prevented. The signs were all there – in the here and now, and not even in a remotely distant future.

Questioning whether the drafting of SOPA and PIPA is well-intentioned is a moot point. Online piracy is a serious issue, and demands a serious solution. And in today’s environment, it is more important than ever to craft such solutions by listening to multiple stakeholders, engaging in constructive dialogue and engaging experts. No matter how sophisticated one’s traditional lobbying tools may be, antagonising and excluding key players is no longer a viable option. As a contributor to Forbes tellingly noted, after last Wednesday, “the time for constructive dialogue, which Congress and industry groups had overtly snubbed all year, was over”.

Eastman Kodak: Distorted Images

By Jonathan Chandler, Partner, ReputationInc.

Jonathan was Communications and Public Affairs Director Europe at Eastman Kodak EMEA from 1998 to 2000.


Rochester, New York,  1999. We weren’t sure if the world was going to end with Y2K or we were going to finally realise Prince’s promise of the party of all-time. Or both.

Certainly those 80,000 of us working at Eastman Kodak didn’t have bankruptcy on our minds.  The future looked scary. But filled with possibility.  Some analysts predicted the stock would hit a $100. Other's were more sceptical.

A year earlier at the bi-annual photo-fest in Cologne our CEO Dan Carp took a brave view into the future. It was a critical moment for me in the business of forecasting and risk.

He boldly and correctly predicted that we were entering an “explosion” of picture taking.  How right he was. He described (first time I'd heard of it) a strategic inflexion point.  The chart showed how our business would either accelerate upwards as part of this revolution... or  decline at an exponential rate if we didn't ride the curve.

That’s what the chart said. It was an honest forecast of the unknown future.

He rightly described how digital would transform the way we use, share, relate to pictures. And that was even before anyone dreamed of Facebook.

There was excitement about a digitally-created photo book for....say $100. A photo CD for £15.   A 2 megapixel camera for $200 (check your phone, that "free" camera you have in your hand has at least twice the power of the brick you could have bought back then).

This was not a leader afraid to confront the future or indeed to predict it.

So what was Kodak doing about it?

At the same show the stalwarts from "consumer imaging" division were lauding the breakthrough of an APS camera (the one with the little film cartridge) that could actually allow you to see the shot you had just taken. On a tiny digital screen.   And if someone blinked, take it again, and expose another ray of light on your silver halide film until all 24 frames were exposed. Progress along the curve?

Across the hall the "digital and applied imaging" crowd - West Coast dudes recruited from silicon valley hot-houses  - were offering gear that you needed a PhD to operate. Billions of dollars were being poured into the loss-making digital business.

But it seemed  they were either chasing the "golden age" by grabbing the camera business back from Japan at "any cost"  or driving people back to the 60s and the joys of  "home processing", when my Dad was developing film in the bath (not at the same time, that would be dangerous, although I wouldn't put it past him.)

It was the active disruption and confusion of a consumer pattern that Kodak itself had established...9 times in a year in Japan, six times in the US, 3 times a year in Europe, and half a time a year in China... People "on average" would take a roll of film, drop it off and come back in an hour or a day and enjoy.  Not that fast moving,  in the overall pattern of consumer consumption.  I created about 50 facebook albums last year (processing cost, nil) but spent a whole lot more with Moonpig.com  doing greetings cards, than ever did on Kodak film.

I always felt if we had just called the chip an "e-film" and encouraged people to take it to Boots or Wal-Green rather than convert their loft into a digital darkroom... We might have bought some more time.

The tragic conclusion to the "strategic inflexion" presentation - which was otherwise spot on - was that silver halide would continue to grow.   Because as more people use pictures,  film and photographic  paper will be a smaller but still growing part of the mix.  But what if not? Who was going to fund the (good or bad) investment in digital?

 The Rochester campus was about six miles long, has its own coal-burning powerplant, and then "only" employed 35,000 people.  Hard to accept a different future without film when you sit in the citadel at the centre of all that.

Forecasting future scenarios takes more than vision. That is arguably the easier part. For an organisation, the challenge is to see itself. To accept that the assumptions on which its franchise, its future, is based are by definition fragile.  Be it technological, environmental, regulatory.....no fortress is unassailable.

One of the most powerful reasons to conduct a serious forecast of future issues is to give context to "weak signals" of change. The one's that inconveniently don't fit into the business plan but become a tidal wave a few years later.  But even if the signals are loud and clear organisations demonstrate an amazing resilience to change.  Visionaries throughout history tend to get short shrift from the status-quo-ers. So anyone serious about future reputation or policy challenges in a major corporation needs to exhibit equal resilience and an adventurous mind. We're proud to work some clients who have just that.

At Kodak, the vision had been set as early as 1998 and surely now we were all pulling together to "inflect" in the right direction.

We even had a booth at the eery void called the Millenium Dome to demonstrate our participation in the brave new world. Assuming there was one when the clock struck twelve.

Back to Rochester, 1999. IT analysts were getting filthy rick fixing our clocks,  Prince was limbering up for the big show and Francois Mitterand was asking "what's it for?"  (it's the best concert venue in Europe now, stupid).


At a gathering of the PR community,  we were addressed by the various global business heads. The Yamamoto-clad cyber gurus made us feel intellectually bankrupt by describing products that you clearly needed to be cleverer than us to find a use for.

Meanwhile the Brooks Brothers consumer suits told us about exciting new yellow boxes, but nothing - at all - that mentioned digital.

I turned to my "digital and applied" colleague for clarity.  "Oh, they're not interested", she said.  

So I dared to ask the question: "You haven't mentioned digital once, I just wonder what your...opinion is?"

The gent looked at me with some surprise.  He consulted with his colleague who was sharing the podium.  I presumed he was going to straighten up the "narrative" on the partnerships with the "greats" of the era like AOL or AT&T.

But instead, he delivered a line that could have been a straight from "Sands of Iwo Jima"....

"We're gonna drive 'em back into the sea."

Managing the reputation of online platforms

By Jeremie Guillerme, Consultant, ReputationInc

A lot has been written on how companies can leverage social media to enhance their corporate reputation, but there is currently little thinking around the emerging topic of reputation management for social media themselves. Online social platforms are a particular breed of business, where one of the reputation pillars – the ‘product’, i.e. online content – is generated by its users, be they merchants, website owners, or members of the public.

Facing increasing reputation risks such as regulatory scrutiny, media criticism and consumer activism, social media platforms will have to grow and defend a reputation of their own if they want to continue to operate their business unimpeded.

Reputation risks of online platforms

Most user-generated content platforms have already learnt the importance of reputation management the hard way. In the past years, the sector has suffered various attacks, which fall under three categories:

- The debate around inappropriate content. Online platforms need to wage a permanent war on illegal or inappropriate content, as any content is likely to be noticed by both traditional and online media, and lead to a reputation crisis. An interesting example is the issue of counterfeits sales on Ebay, which posed a serious threat to the company’s licence to operate.

Conversely, online platforms need to be very careful about what they consider inappropriate to avoid accusations of censorship. In several instances, Facebook’s extremely strict policy on nudity has attracted flak from its users. For example, the group Hey Facebook, breastfeeding is not obscene!, has attracted nearly 260,000 members. The complicated arbitrage between what is inappropriate and what isn’t still has to rely the company’s deep understanding of its user community.

- Lifestyle issues. Social media have changed the way we live, which has lead to increased scrutiny from all sides. Researchers and NGOs send warnings about health and addiction, while businesses, concerned about confidentiality and employee productivity, are banning them in the workplace. In addition to these ‘sectoral’ threats, social media are often held responsible for the conversations happening on the platform, as traditional media and the general public tend to ‘blame the messenger’. For instance Facebook and blogging platforms have been said to encourage eating disorders amongst young girls.

- Privacy issues. The way the terabytes of personal data users give away everyday is the primary concern of regulators and users. Each change in Facebook’s privacy policy now attracts significant scrutiny, and quite often, leads to petitions of users against it.

Building reputation for online platforms

In this difficult context, and with little or no content of their own, how can online platforms build their corporate reputation?

In the past year, social media have explored some interesting avenues:

- Using data for the greater good. Social media’s role is now recognised as crucial in tracking epidemics. Just a few days ago, Twitter has been praised for yielding data that helped authorities manage the cholera outbreak in Haiti, while Google mines its search data on an ongoing basis to monitor flu trends.

- Owning an issue. In the UK, Google has launched the "Good to Know" campaign on internet safety, in partnership with the Citizens Advice Bureau, which tells internet users how to choose a strong password, recognise phishing emails, amongst other basic safety tips. Doing so, Google harnesses its activity to a major societal concern, and it positions itself as an authority regarding online security, giving the company a credible vehicle to engage with its stakeholders and telling them how Google is handling personal information.

- Maintaining trust by improving transparency on personal data usage. Important progress has been made in this regard. Facebook made considerable efforts to make it easy for its users to know what type of data they are sharing with whom amongst their friends. However, information on the way personal data will be used for commercial purposes is still fuzzy, basically coming down to one, tautological point: “you are allowing us to use the information we receive about you”.

While these initiatives may have reached their objective and delivered some reputation benefits, major online platforms will have to much more if they want to demonstrate a positive societal value, maintain user trust, and preserve their licence to operate.

This means: growing and diversifying their portfolio of initiatives, and getting them more publicised.

How the US model of campaigning shaped politics across the world

By Andrew Hammond, Associate Partner, ReputationInc


The eyes of much of the world will this coming year be on the US presidential and congressional elections as Democrats and Republicans fight it out for control of the White House, the US House of Representatives, and the US Senate.

The 2012 US federal ballots will be the most expensive in history, with some anticipating that Barack Obama might even become the first presidential candidate in history to raise more than 1 billion dollars for his re-election effort.  Overall, it is estimated by the Center for Responsive Politics that the cost of the presidential and congressional campaigns could be a mammoth 6 billion dollars.

Given the vast amount of money spent on campaigns in election years, a significant mini-industry of US political consultants has long existed.  However, what is less widely appreciated is how common-place it has become for many of these same people to work behind the scenes in other countries, including here in the United Kingdom.

Indeed, it is estimated that US political consultants have already worked in more than half of the countries in the world supporting campaigns and elections.  This year, that tally will only grow as US consultancies reach out to more uncharted international territory.

In early 2012, key potential targets for new ‘work’ will include:  the Egyptian legislative and parliamentary elections in January and March respectively; the presidential elections in Turkmenistan and Yemen in February; and potentially the Russian presidential election in March.

While the success of these internationally-mobile political consultants is mixed in terms of electoral outcomes, they have nonetheless had a lasting effect, prompting what some have called the ‘globalisation’ of the political communications industry.  Or, in the eyes of critics, the international triumph of spin over substance, which has tended to promote more homogenous campaigns with a repetitive, common political language.

As James Harding, the editor of The Times of London, documents in Alpha Dogs, the origins of what has become a mini-industry lie in the 1970s.  It was then that US political consultants (at the vanguard of which was the Sawyer Miller agency) began exporting US political technologies and tactics into Latin America and ultimately across the globe.

A key underlying premise of the industry is that such technologies and tactics can achieve political success just about anywhere. Thus, many foreign countries are sometimes deemed as mere international counterparts of US election battleground states like Pennsylvania and Ohio.

What started as international elections and campaigning work soon branched out into providing more foreign governments, leaders and bodies such as tourism and investment authorities with international communications counsel and ultimately what is now known as ‘country branding’.  Country branding is founded (like disciplines such as public diplomacy) on the realisation that, in an overcrowded global information market place, countries and political leaders are, in effect, competing for the attention of investors, tourists, supranational organisations, non- government organisations, regulators, media and consumers.

Some countries may only get a few opportunities a year to make a favourable impression and get their ‘side of the story’ across.  In this ultra-competitive environment, reputation can be a prized asset (or potentially big liability) with a direct effect on future political, economic, social and cultural fortunes:

• In some cases, a single highly damaging episode can fundamentally damage a country's standing - as China found following Tiananmen Square.  In such cases an approach involving a long recovery time to rebuild what is lost is often required.
• A country may simply wish to promote an opportunity based on a specific single goal, such as wanting to attract more foreign direct investment or increasing tourism -- as the current ‘Incredible India’ campaign illustrates.
• Other states, for example Georgia, Rwanda and the Maldives, may want to establish a presence in the public mind because of fears about a specific issue (such as Russian preponderance, building sympathy amongst donors and investors and tourism in the short term, and/or climate change in the long-term respectively).

In general, the most effective country strategies align all key stakeholders (across the public, private and third sectors) around a single powerful vision for global positioning.  A good example here is New Zealand which, since the 1980s, has transformed itself from earlier perceptions of being a relatively remote backwater which, despite its scenic beauty, was not a major global tourist destination.

Especially in the midst of a difficult economic climate in the early 1980s, partly caused by the country's loss of preferred trading status with the United Kingdom (one of the nation's then major export markets), the ‘New Zealand Way’ initiative recognised that a strong country reputation for quality would be hugely beneficial if the nation was to compete in global export markets.  Here, the massive untapped potential of the country's natural environment was recognised, not just in terms of natural produce exports, but also for building a destination brand for tourism and outdoor sports.

The New Zealand example underlines how a simple, unified cross-sectoral vision can be enormously powerful.  To be sure, the country is not unique in having an unspoilt natural environment and quality produce.  But it has managed to capture the world's imagination with its consistent branding that has put natural values firmly at its core.

Today, of course, it is not just US political consultants who are blazing a trail in the industry.  London, for instance, has become a major country branding centre fuelled by its favourable European time zone between Asia, the Middle East, Africa, and North America; and the headquartering within the city of key global publications such as The Economist, Financial Times, and the Wall Street Journal Europe.

Looking to the future, demand for country branding is only likely to continue growing given the increasing complexity and overcrowded nature of the global information market place.  Indeed, in Asia, Africa and the Middle East, much of which remains unchartered territory for the industry, globe-trotting firms may be on the very threshold right now of some of the most challenging work they have yet encountered.

Will 2012 be Gingrich?

By Andrew Hammond, Associate Partner, ReputationInc 

Who will be the Republican presidential nominee to face Obama?

 The 2012 US election season begins on January 3 when Iowa becomes the first state to hold contests to decide who will be the Democratic and Republican presidential candidates in November.  While Barack Obama will be re-nominated as the Democratic contender, the Republican race’s outcome is uncertain.

Most recently, in November and early December, Newt Gingrich surged in national opinion surveys of Republican identifiers.  Although his polling lead has narrowed in recent days, and indeed some surveys now show him in a statistical dead heat with Mitt Romney, Gingrich had been written off as a complete long shot candidate only a few weeks ago. But can the controversial ex-leader of the House of Representatives really become the Republican nominee, and then beat Obama in November 2012?

On the first of these questions, Gingrich does now have a plausible outside chance of becoming the Republican nominee given his strong national polling amongst party identifiers.  The last few decades of US political history indicates that the victor in presidential nomination contests usually leads national polls of party identifiers on the eve of the Iowa ballot (traditionally the first nomination contest of the election season), and also raises more campaign finance than any other candidate in the 12 months prior to election year.

From 1980 to 2000, for instance, the eventual nominee in 8 of the 10 Democratic and Republican nomination races that were contested (i.e. in which there was more than one candidate), was the early front-runner by both of these two measures.  This was true of George W. Bush, the Republican candidate in 2000; Al Gore, the Democratic nominee in 2000; Bob Dole, the Republican candidate in 1996; Bill Clinton, the Democratic nominee in 1992; George H.W. Bush, the Republican candidate in 1988 and 1992; Walter Mondale, the Democratic nominee in 1984; and Jimmy Carter, the Democratic candidate in 1980.

Moreover, in both of the partial exceptions to this pattern, the eventual presidential nominee led the rest of the field on one of the two measures.  Thus, in the race for the 1980 Republican presidential nomination, Ronald Reagan (who ultimately won) led national polls of party identifiers, although John Connally was the leading fundraiser.  While in the battle for the 1988 Democratic presidential nomination, Michael Dukakis (who eventually won) raised the most funds, but was behind in national polls on the eve of the Iowa contest to Gary Hart.

Seen through this polling and fundraising prism, the 2012 Republication race resembles the Republican 1980 and Democratic 1988 contests.  This is because, as Iowa approaches, no one candidate clearly leads the field on both measures of early front runner status:  Romney has raised the most money of any Republican candidate in 2011, while Gingrich leads some of the latest national polls of party identifiers (and is in a statistical dead heat with Romney in other national surveys).

So who is best placed to win between Romney and Gingrich?

Predictions are always fraught with difficultly.  However, at this stage it is most likely that Romney (with his superior national campaigning organisation and financing) will prevail.  However, Gingrich has a chance, especially if he wins big in Iowa and this gives him momentum in a critical mass of subsequent state nomination contests across the country.

Other candidates (especially Ron Paul -- who is currently leading the Republican field in some polls in the state of Iowa -- and Rick Perry) should also not be completely discounted.  Here, it should be remembered that neither Obama (the Democratic candidate in 2008), John McCain (the Republican candidate in 2008), nor John Kerry (the Democratic candidate in 2004) were the early front runners on either the polling or fundraising measure prior to Iowa.  Obama, for instance, was in Hilary Clinton’s shadow for much of the year before the 2008 election season began.

Whether Romney, Gingrich or another candidate ultimately wins the nomination, one of the key factors that will influence Republican prospects of defeating Obama will be whether, and how quickly, the party can unite around the nominee.  A model here for Republicans is the 2000 cycle when Bush emerged strongly from a wide field of contenders before going on to, controversially, defeat the Democratic candidate Gore in November 2000. 

However, it may be harder for Gingrich or Romney to unify the party in 2012 in such a decisive way.  Romney has hit a relatively low ‘ceiling’ of support in 2011 of around 25% to 30% of party identifiers.  This is largely because his generally moderate conservative views (which make him more electable than Gingrich in a national election against Obama) have alienated many right-wing Republicans, including those with Tea Party sympathies.

By contrast, Gingrich is generally perceived as a maverick by the Republican establishment which has considerable doubts about his ‘electability’ against Obama.  Moreover, Gingrich’s current support from right-wing Republicans could also prove fickle inasmuch as they have concerns about his perceived ethical wrong-doing, but nonetheless appear to view him -- for now at least -- as the most credible ‘stop-Romney’ candidate.

Whoever ultimately wins the nomination, most Republican operatives are particularly keen to avoid a bruising, introspective and drawn out contest which exposes significant intra-party division to the national electorate.  The last time such a scenario unfolded for Republicans, in 1992, the chief beneficiary was Democrat Bill Clinton who won a relatively comfortable victory.

While the circumstances of 2012 are different to 1992, another divisive Republican contest would almost certainly provide a much needed boost for the Obama campaign’s fortunes.  With the president’s job approval ratings remaining at or below around 45%, historically low for an incumbent seeking re-election, he remains potentially highly vulnerable to defeat.

Indeed, Obama’s re-election prospects may now rest to a very significant degree on a factor that remains largely out of his hands.  That is, whether the US economy can stage a much more vigorous recovery in 2012 at a time when other areas of the world, including Europe, appear to be heading back into recession.

Andrew Hammond is an Associate Partner at ReputationInc.  He was formerly US editor at Oxford Analytica, and also a special adviser in the Government of UK Prime Minister Tony Blair

There’s a lot of news out there

By Paul Raeburn, Associate Director, ReputationInc

Reading Charlie Brooker’s column in the Guardian on all that has made the news this year, it brought home just how much happened in 2011.  The news agenda seems to have swung from one major story to another with barely a pause for breath.  As Brooker points out, stories like the Libyan conflict almost became dull because they weren’t resolved indecently quickly, and the killing of Osama Bin Laden was far too quickly ‘over’ and forgotten as other stories rolled in.

So what’s behind this (besides the obvious), what does it mean for those of us trying to manage and advance corporate reputations, and can we cope with another year of the same?

A perfect storm

First it’s important to acknowledge the seriousness of the economic situation, and the seemingly regular occurrences of natural disasters and political instability.   Worryingly at least two of those elements are unlikely to be any less pertinent in 2012, so no respite there.

While the media will cover news of job creation, interest in softer corporate brand-building stories has on the whole been increasingly limited due to the near permanent noise around the latest major story. 

In such an environment, corporate campaigning and thought leadership on major issues and policy debates feels a lot more effective and appropriate than trumpeting a self-focused narrative with small-fry corporate news. 

Don’t rely on anyone else

This year has also seen diminishing levels of trust and the continued hyping of news, and reaction to it, by social media.

The Liberal Democrat u-turn on tuition fees has affected how the next generation, already facing grim employment prospects, view those in authority. And while many corporates feel they have logical arguments around issues such as their tax status and exposure, the public often sees such issues differently and they undermine other efforts to communicate good corporate citizenship.

This atmosphere, combined with the rise of social media, means it’s less feasible than ever to rely on others to get your message out there.  The days of no comment and selective interventions to manage news and reputation are looking increasingly untenable, with plenty of others more than happy to fill the vacuum and generate noise that will define your reputation in your absence.

Mistakes will happen

All this sounds a little apocalyptic (and a little bit overly-serious), but it’s the reality with which we are faced.  The news that News of The World journalists maybe didn’t delete voicemail messages from Milly Dowler’s phone makes you consider how events might have panned out differently if there wasn’t such a frenzy around that story at the time.

At one stage this year I believed someone when they told me that Mubarak had fallen (several weeks before he actually did) and that David Hasselhof was playing Tahir Square that evening.  I almost tweeted about how excited I was to hear that the Hoff was embracing the revolution.

Had I done so I would have looked quite silly, but perhaps another story would have broken soon and my error would be quickly forgotten.  Which makes me wonder, how many potentially tricky situations for corporates were somewhat buried in 2011 by the avalanche of news?

Or perhaps that’s just a little too fanciful, as those that have come under the microscope this year may testify, the job of reputation management is getting harder than ever.

Charlie Brooker’s 2011 Wipe will be broadcast on Friday 30^th December at 10:30pm on BBC Four

Love and Betrayal on the UK High Street: A Tale of Two Brands

By Nuno da Camara, Director, ReputationInc

How long does it take to win over the loving adherent of a rival brand? Well, in my case, I thought it would take years for me to consider betraying my favourite provider of consumer electronics, the much loved John Lewis, to go with anyone else. I love John Lewis with a passion. They have excellent customer service and product knowledge and are polite and charming. And they always give you such good advice on what to buy. Then there‘s the free guarantee, always longer then you get at other stores. What’s not to like?

Well, nothing, but as I sat on my sofa last weekend watching TV I was intrigued by PC World’s latest advert: staff that are trained to deliver amazing customer service is their hallmark, they claimed. Really? Surely not as good as John Lewis though, I thought. Nevertheless, having decided that it was finally time to get that home cinema sound system I had been dreaming about for months, I set off to my local PC World. Is this the beginning of an amorous betrayal, I hear you cry? Well, no. And, actually, yes. You see, I only dropped in to assess the lie of the land, an initial reconnaissance mission if you will, because the PC World store is near my house. The plan was to go to John Lewis next. However, as the autumn leaves whisked around the high street, strange things started to happen to PC World. I wanted to ask a question and a member of staff was immediately on hand. I told him what I was looking for and he gave me a useful tour of the products. I asked for an opinion on the best quality products and received a quick and sensible evaluation.

Slightly taken aback, I pressed on with my barrage of increasingly deft (or so I thought) questions, trying desperately to test his product knowledge to the core. I fully expected this informational assault on the senses to floor him at some point. But it did n’t. He just carried on being really polite and giving knowledgeable answers.

By this point, I was confused. “Is n’t he behaving just like a John Lewis person?”, said a little voice in my head.  He homed on his prey. He asked me what I would use it for: mainly TV and films? Loud music for parties? X-Box? It was a sensible attempt to fit the product to the person. The little voice got louder. And the cognitive dissonance started to get painful. I was on the ropes and he delivered the sucker punch:
“The Panasonic will be perfect for you, Sir. It’s great quality and has everything you need. And it’s £30 off, so it’s a great price as well.”

So, that was it really. How could I possibly stay faithful to my favourite retailer? A few minutes later and I am inserting my PIN at the point of sale. The betrayal takes place to the tune of £258.51. I feel slightly guilty. But the facts are irrefutable. A quality product at a great price bought on the back of good advice.
So, how long does it take to win over the loving adherent of a rival brand?? In my case, about 17 minutes. Yes, it took PC World exactly 17 minutes to convert a vociferous adherent of the John Lewis brand to a paying customer of their own. Don’t get me wrong, I still love John Lewis. But now I would recommend PC World as a good alternative option. What’s the secret? Something to do with training staff to deliver amazing customer service I guess...

Russian Dolls Time or the Beauty of Simplicity

By Anastasia Chernoivanova, Consultant, ReputationInc


Yesterday it was announced that Northern Rock was to be acquired by Virgin Money. We thought Mr Branson had already left his footprint on every possible industry: from mobile, radio, media, to trains, planes, spaceships. And now banking. We cannot help but ask: how far could the Virgin Empire be stretched? And most importantly, what lesson has been learned from Sir Richard’s failures such as Virgin Cola, Virgin Cars, Virgin Brides.

In today’s world, the business environment has turned from complicated to complex with rapidly changing consumer behaviour, rising stakeholder activism, technological revolution, social media boom, unpredictable competitor landscape, toughening regulation. The list goes on and on. Financial crises don’t make companies’ life easier either. The level of complexity only grows with the number of markets your company operates in.

No wonder more and more companies are struggling to make sense of the situation. Sooner or later diversified businesses are overwhelmed by pressure from different fronts, and treat each issue as a separate matter. However, once this happened, it t becomes very easy to lose focus on why they are running all these streams of work in the first place.

Here is where our Russian Dolls come in. Every child knows that the most important doll is the smallest one and that is why it is hidden inside all other dolls. In a similar way a company’s mission (why you exist), values (what you believe in and how you will behave) and strategy (what your competitive game plan will be) should be put at the heart of everything it does: from stakeholder engagement to risk forecasting. All other larger dolls are different in colours and sizes but they are the same in shape. It is the mission, value and strategy that define that shape. Mission, values and strategy should be simple, short and very clear in order to be understood and remembered by all employees and therefore by stakeholders.

Returning to Virgin, the secret of its success appears to be simple - Mr Branson himself. The tycoon injects his entrepreneurial spirit into his operations and puts it at the heart of the every business he touches. Successful ventures in the Branson Land live and breathe the ideas embodied by the man himself, and thus stay as true as possible to that mission and value. With yet another adventure into another Virgin territory, the world would be watching closely to see what Mr Branson may bring to the banking industry.

Every child knows the smallest doll is the most important one and if it is lost all other dolls do not matter.  A simplification? Maybe. But sometimes simplicity is what the scarcest resource, because it is so easy to forget what is hidden inside.

Bad reviews travel fast: Tripadvisor and online reputation management

By Eileen Lin, Consultant, ReputationInc


Here is the situation: You have just over an hour before the evening performance, and stumble upon what looks like a decent pre-theatre menu.  After all, anywhere with fast service and reasonable food will suffice.

The punter at the door promised you snacks within 5 minutes and drinks within 10 minutes. You enter full of hope, only to find that after 20 minutes, you have not been served at all, despite having asked the waitress twice. Then, when your food is finally ready  45 minutes later, it never reaches you, because it sat on a service stall for 10 minutes in the middle of the room, where all the guests and staff had to walk past.  At the end of the meal, you find a 12.5% ‘voluntary’ service charge added to your bill. What do you do?

Do you…
1) Refuse to pay for service
2) Ask to speak to the manager
3) Pay the full bill and vow to never come back again, or
4) Pay the full bill, nod, smile, thank the staff for their hospitality, only to scurry home to write a long and whining online review criticising the poor service?

Let’s face it.  Britons are no good at complaints or confrontations. Most of us faced with this situation would probably prefer to avoid the embarrassment of making a scene and quietly ‘vote with our feet’ instead. However, with social media, things have changed. Popular review websites such as Tripadvisor.com have enabled consumers to get their own back on restaurants and hotels that disappoint.

The extent of such influence was well-documented by a recent documentary by Channel 4, entitled ‘ The Attack of the Tripadvisors’, where a group of B&B owners, whose life and business fortune had been made hell by the review website, confronted their critics. For the hosts, the hardest things to come to terms with was the fact that customers always seemed happy when leaving the premises but as soon as they reach their nearest computer, the meal has turned sour and the stay uncomfortable.

Why didn’t you tell us so, they cry, rather than simply slating us online? We would have done something about it, they say. To illustrate the emotional damage the site has caused, one B&B owner went as far as to say that she had ‘considered paying for a hacker to destroy the website’ because it had turned her childhood dream into a nightmare.

I cannot honestly say I don’t have sympathy for these struggling independent businesses. However, they are missing a fundamental point: the reviews websites are merely a reflection of the increasingly high standard modern consumers have come to expect from anyone that seeks to take their hard earned money from them. We all laughed when watching Fawty Towers, but who among us would actually be happy to pay to stay there?

Over the years, consumers have become increasingly conscious of their collective power and rights, while social media has enabled individuals to have influence beyond their immediate network.  This rise in citizen journalist has forced businesses to re-examine how they obtain and manage customer feedback.

Rather than blaming the reviews website for mis-management and accusing the critics of being cowards hiding behind computer screens; businesses, large and small, must learn fast. Not only on how to deal with customer complaints online, but also how to turn each crisis into an opportunity, using feedback to inform business strategy and action changes. After all, we know that customer satisfaction and advocacy tends to increase when a complaint is cordially addressed, compared with when there is no complaint at all. Managing customer feedback, and thus business reputation, is no longer a communication tool, but a business imperative.

Friends in high places: the paradoxical relationship between business and government

Charles Pitt, Account manager, ReputationInc


The relationship between business and government is paradoxical. At one level government pontificates on how businesses operate and regulates their working practices – posing as our doughty defender against the unacceptable face of capitalism. At another, government is dependent on business to drive economic growth and raise tax revenue. And government is a customer – buying huge chunks of expertise to deliver its agenda whether that’s rolling out smart-meters or getting people off benefits and into work. Telling someone how to do their job, relying on them to do it for one’s income and buying stuff from them all at once does not make for clear cut roles and responsibilities.

Politicians and big business are widely distrusted so it is unsurprising that businesses invest more and more of their external relations function in getting those relationships right -- both for their reputation as well as for their profit margin.

This week the Business Minister published the list of chief executives who have been offered a hotline to ministers. This new scheme designates six ministers as the go-to person in government for some of the UK’s biggest firms.

British business is split on the benefits. Some, such as the CBI, argue that British business needs this degree of “account management”.  Others contend that the largest businesses in Britain already enjoy cosy relationships at the top of government and that formalising relationships in this way might crowd out smaller players – the very companies that need extra help with investment and exports.

However, obsessing over who at the top of business is talking to who in Whitehall distracts from the far more complex web of relationships in play. The fantasy that multi-million pound government contracts are sealed on the golf course is just that – and the fact that the very hint of such underhand dealings frightens politicians and businessmen alike reflects the better-informed consumer landscape in which they both operate. Consumers have exploited growing choice by making ever more demands on those from whom they buy, demanding ethical behaviour across the supply chain. Consumers have also forced transparency on politicians; formerly smoke-filled rooms are not only smoke-free, they are now made of glass.

Rather than nostalgically pining for a cigar in the 19th hole, the smartest business people are responding to their customers’ needs and recalibrating their relationships with government. In some cases they are investing ahead to develop proactive solutions – businesses that spot problems that have yet to be noticed in Whitehall are well-placed to offer (and charge for) the solutions.

Rather than adopting defensive positions, the best external relations managers understand the need to stay focused on the horizon. In other cases businesses are leveraging their experience to deliver what the government can no longer afford to do itself, paying for it and recouping their costs in the future savings made by the state. And chief executives have sat up and noticed – the best in-house public affairs managers are not looking to merely create opportunities for executives and politicians to meet over lunch but using their political insights to drive business growth.

Politicians and businesses are both subject to brutal accountability – whether at the ballot box or on the high street. But rather than colluding in damage limitation the wisest amongst them are embracing their shared agenda: delivering the services people want for the best possible price. Business and government working hand-in-hand, and out in the open, is in all of our interests. And if they fail us they know what we can do about it.

Measuring what matters

By Kerstin Liehr-Gobbers, Director, ReputationInc.

A column for www.research-live.co.uk.

Sitting in a board meeting recently, I was delighted to hear the CEO of a global FMCG brand say that he’s started measuring the performance of his managers based on the businesses’ reputation strength: the more positive the reputation, the better their bonuses, and vice-versa. As a reputation consultant, I know that reputation has not always achieved such revered status among the C-suite.

However, delight turned to doubt as I looked closer at the company’s approach to its annual reputation measurement. What struck me first was the lack of a target variable. There was no endgame, to borrow a sporting analogy.

Corporate reputation is a strong measure of a business’s perceived competitiveness and future ability and should be related to behavioural outcomes, since it actually motivates stakeholders to invest in, apply for, recommend or endorse a company.

But without a set of clear behavioural objectives to measure reputation against, the FMCG company in question was left with a generic reputation measurement model that simply reflected the mean score of stakeholder perceptions of each reputation dimension – be it innovation, customer service, corporate responsibility, governance, leadership and so on.

In this approach, the weightings of each dimension of reputation are assumed to be equal and the impact on behavioural outcomes goes unmeasured. So high scores might be enthusiastically received by the CEO but it may be a case of false optimism. The simple mean score approach fails to account for how important stakeholders think each dimension is and how reputation impacts their future behaviour.

Even more worrying is that such results can lead managers – who are motivated to maximise their bonuses – to focus their efforts on driving reputation scores up in areas that are not necessarily beneficial to the overall goals of a business.

For instance, the initial reaction of the FMCG company I mentioned was to focus on improving the poor perception of its community work. But there was no way of knowing whether this investment would make a difference to reputation or whether key stakeholders would give the firm credit for its efforts.

Measuring reputation should be about understanding which stakeholder groups a business needs to build equity with and which messages or perceptions will drive the company’s bottom line. The question all companies should be asking is: How does reputation influence practical decision-making among key stakeholders that will ultimately help or hinder business growth?

Olympus – Blind to Basic Reputational Truths

By Mark Hutcheon, Associate Partner, ReputationInc


The unusual sight of ‘CEO as whistleblower’ – was in full view this week as Michael Woodford blew the lid on a bizarre internal cover up at camera company Olympus.

While the story doesn’t have the corporate villainy or bad taste of News International’s Phone Hacking scandal, it once again reveals how cavalier companies are with their money, values and their reputation (arguably their most valuable asset).

Mr Woodford came out of the Olympus dark-room and revealed a very different picture of the Japanese firm after stumbling across a bewildering series of payments and decisions. Holding the company up to the light (and scrutiny) the CEO was shocked at a “catalogue of calamitous errors and exceptionally poor judgement…result[ing] in the shocking destruction of shareholder value of USD 1.3 billion.”

The scandal has turned attention on Japanese business - once heralded for its model corporations built on loyalty, technology and obedience.   Their consensus-driven corporate culture in this case breeds a fatal absence of challenge. Workers worshipped the chairman, knew their place and everything flowed from those reference points.

Until CEO Mr Woodford picked up his pen of truth to write the script for change. Culturally, he broke sacred laws of Japanese business – challenging your leader – in his case by insisting on transparency and honesty. Reputationally he got it right, just none of the company’s other directors could see the bigger picture.

Independent voices should be seen as a healthy feature of a modern corporation not least as they continually test whether the brand lives up to internal and external expectations.

Olympus wanted an outsider to shake up the company in the way a Japanese executive would not, but he clearly underestimated what this meant. Scrutiny of global business, mistrust of the markets and public expectations of transparency are normal operating conditions for businesses and Mr Woodford reflected this. In Japan, not so.  While the CEO learned the hard way you don’t challenge your leader in Japan, Olympus and possible Japanese industry has learnt that it cannot control the truth and therefore your reputation.

The bare facts are these: Olympus has destroyed $1.3bn – or about a quarter of its fast-dwindling market value – on a series of ill-explained and frankly incomprehensible deals and fee payments. Olympus ended up paying Axes and Axam, a related Caymans-incorporated entity a fee of $687m – 36 per cent of the value of the deal. These appear to have been overlooked or ignored in deference to the authority of its leaders.

The values of a corporation are the signposts and promises of how consumers can expect it to behave. Act in line with those values and you earn trust – a valuable commercial commodity. Go further and voluntarily reveal your genetic code if you want stakeholders to understand what the business stands for and believes in.
What is clear is management detached themselves from the values - the DNA of the business – encountering no challenge or oversight because no one dared question.   Rather than see the British CEO as a threat…Ironically he was their wake up call and the reality test Olympus needed as he represented the view of external stakeholders.

The Olympus affair appears to highlight the reputation risk in decision-making conducted solely through the internal lens of a company. If leadership and management cannot connect to a bigger picture, it will suffer reputationally and commercially.

Potentially, Japan’s country brand will emerge tarnished too.  As the FT put it “its manufacturing prowess is considerable, but the value created is often poorly husbanded by the practices of corporate Japan. Without better governance, these will continue both to stifle the dynamism of Japanese industry and to drag on growth.”

There are lessons for all companies in this story.  Companies have to accept change to their historical beliefs to stay relevant and reputable. The discreet, private corporation doesn’t exist anymore. Scrutiny is inevitable – in fact opening up the business to share its values, ideas and heritage are pathways to trust and enhanced reputation – not risk.

Olympus had its time for change and missed it. When the problem was revealed, it should have been managed in a discreet manner to minimise the reputational damage. Yet the board put personal loyalty above the interests of the company and its reputation, like its shares, are suffering (Olympus’s shares have fallen by 41 per cent since Friday’s board meeting).  On top of that trust in the governance or integrity of the brand is damaged all over the world.


A concluding thought for companies and comms directors: if you have a legacy issue – alleged or real surrounding your business – confront it early and seriously if you want to contain and close it.

Blackberry’s (reputation) crumble

By Maita Soukup, Account Manager, ReputationInc.

Despite the ill will on Twitter, the demands for compensation, and the business media’s early epitaphs to Research in Motion, this week’s Blackberry crisis was fundamentally a case of bad timing.  Had the business not already been facing serious doubts about its leadership and innovation capability, the global service interruption would have made one day of front page headlines – not three.

While the loss of service was an annoyance to customers, what makes this technology disruption so different from the lacklustre broadband service we’ve come to expect, or the multitude of glitches consumers found immediately after laying out hundreds of pounds for a shiny new iPhone?

In other words, what transformed a technical failure into a global reputation crisis?

First, when the spotty service began on Tuesday, RIM was already operating against a backdrop of falling sales, and diminishing faith in its ability to compete against the other smart phone makers on the block.  The global technical failure was a conveniently placed nail for disaffected investors to hammer into the company’s coffin.

Secondly, the server meltdown coinciding exactly when enthusiasm about Blackberry’s main competitor, Apple, took on a quasi-religious dimension following Steve Job’s death earlier this month.  Never as sexy as the iPhone, until this week Blackberry at least had reliability on its side.  At the first sign of weakness, Apple evangelists and technophiles took to social media with a distinct hint of schadenfreude in their criticism of RIM.

However, none of these forces would have had quite such a devastating effect on RIM’s reputation had the business managed its response to the crisis faster, and more proactively. 

The apology video from BB’s founder Mike Lazaridis was faultless in content: he showed true remorse; admitted failings; and provided new information. However, it was too late.  There was simply no way to reverse the tidal wave of negative sentiment that took a life of its own during the first 48 hours of the crisis.

Essentially, RIM lost control of the story during the critical first 12 hours of disruption.  The floodgates were left wide open for both traditional and social media channels to speculate, voice frustration, and begin demanding rebates for the service failure.

Responding to a crisis successfully is all about preparation and anticipation.  Had RIM been more proactive in managing its investors’ eroding confidence over the past six months, the negative sentiment picked up by media would not have been nearly as deep.  Similarly, had the company responded earlier and more definitively to the initial service disruption, it would have retained more control over the emerging story – rather than being on the back foot as new updates and criticism ran rampant throughout social media.

I may be in the minority, but I am confident that RIM can recover its reputation as a reliable innovator over time.  However, it will require the company’s leaders to share a clear vision for the businesses’ future (sharpish!) and then re-align its approach to innovation and operations to deliver on that ambition.

“Even the champagne was flat”: why the party conference has changed.

By Charles Pitt, Account Manager, ReputationInc

A regular criticism of party conferences is that they are now dominated by corporate guests (and their public affairs advisers) eager for valuable face-time with government ministers and senior opposition spokesmen in the amenable setting of a hotel bar. So the argument goes that having abandoned the affordable jollity of seaside resorts the “real activists” are priced out of the event and their voice is no longer heard. But this thumb sketch misses a critically important change that has affected the art of lobbying – a change that is directly responsible for the growing corporate presence at political conferences.

Consumers are now more politically aware than ever - 24 hour news, blogging and social media have transformed how we engage with the issues that matter to us. And as a consequence traditional routes for the politically-minded are less and less relevant. Activism in local government or local political parties has been supplanted by focused campaigns that target narrower interests. The collation of mass email lists has enabled special interest groups to develop a ruthless streak that would have been thought out of character even a decade ago. And the politically-aware consumer is now confident that such activism is working – unpopular government policies can be killed off when the right message is fired at the right target.

Politically-aware consumers are bringing pressure to bear on businesses as well as politicians. Where corporate and social responsibility might have in the past been a neat marketing tool it is now a serious business function – one that has been relatively-well insulated from cuts despite the recession. And where businesses were historically likely to exploit contact with government ministers to resist legislation that ran counter to their interests they are now looking to work with government in their customers’ interests. Note the way businesses position themselves as thought leaders who are setting their own agenda rather than following the regulators. Instead of arguing that carbon emissions targets set by the EU are unachievable many businesses are actively working to meet tougher targets to tighter deadlines – and telling their customers all about it.

The activism that presents at party conferences reflects this change. Some journalists have complained that in packed-out fringe meetings every question seemed to be coming from a chief executive or NGO founder. Chief executives have not chosen to invest their time and money in cross-examining junior ministers, or shadow ministers, for light amusement but because they are under increasing pressure to prove their social purpose to their customers and shareholders, and one way in which they can do this is to be seen to be actively engaged in the political process. As for the NGOs, their glossy brochures and slick heads of communications show that they went corporate some time ago.

The glory days of party leaders taking on a heckler in the conference hall or a speech from an unknown activist that upstaged the prime minister may be a thing of the past. But activism aimed at shaping the policy agenda is as lively as ever – it just looks very different. Consumers are expressing their concerns on the high street as much as at the ballot box or the public meeting. Businesses are responding to this by raising the standard of their political engagement and delivering it in a more transparent way. And one of the many consequences of this is that there are more chief executives (and their public affairs advisers) attending party conferences. But perhaps next year they could try to be a little more sparkling, for the journalists' sake – if Trade Unionists, Liberal Democrat Borough Councillors and Conservative Peers can party surely the NGOs and chief executives can too (with their public affairs advisers)?

Leveraging Innovation to enhance Corporate Reputation

By Jeremie Guillerme, Consultant, ReputationInc.

Being perceived as an innovator enhances corporate reputation and business performance. However, besides technology companies that consistently top reputation league tables, how can firms in more traditional sectors, such as food and beverage, leverage radical innovations to enhance their reputation?

Looking at the latest Fortune’s Most Admired list, it is clear that companies perceived as most innovative enjoy a significant reputation advantage over their competitors. The corporate reputation of innovators such as Google or Apple is clearly triggering admiration and envy across all industry sectors.

Academic research provides evidence that a reputation for innovation leads to various business and reputational benefits such as:

- customer loyalty

- improved favourability

- propensity to pay premium prices

- and perhaps most importantly: customer excitement (Henard & Dacin, 2010)

Ultracompetitive marketplaces require companies to think beyond customer satisfaction and market needs to become providers of excitement. Remember Steve Jobs’ mantra: “people don't know what they want until you show it to them.”

However, all industry sectors are not born equal when it comes to creating excitement. In the present context, the task is certainly easier for a technology company than it is for a large food and drinks company. While the high-tech industry has generated many disruptive innovations lately (tablets, apps, streaming technologies and so many others), the consumer goods industry has mostly focused on incremental product changes (improved taste, different portion sizes, more convenient packaging, etc.).

It would however be unfair to say that the food and beverage industry has not provided any disruptive innovation. Innocent is one notable example of a company that succeeded in creating excitement about a new product category, and reaped the associated reputational benefits. But what can be said about larger, sometimes century-old global players with well-established brand portfolios?

Acting under the constraint of increasingly stringent health-related regulations, these companies are also trying to create the new product category that will enhance their reputation for innovation as well as generate consumer excitement. However, large incumbents face a challenge that new players like Innocent did not. How to enhance an innovation profile with radically new products while avoiding blurring the reputation of a well-established company? Being a disruptive innovator can indeed be highly regarded, but doing so shouldn’t confuse stakeholders on your vision and purpose.

A classic example of a large food and drinks company successfully launching a disruptive innovation without losing focus is Nestlé’s Nespresso venture, which radically changed the way coffee is sold to consumers through a clever product associated with a profitable business model:

- A new, premiumized coffee giving consumers a ‘connoisseur’ feeling

- A business model where an appealing appliance (see the design of the coffee machines) is the starting point of virtually unlimited repeat purchases of high-margin coffee capsules

- A closed distribution circuit eliminating any competition

The resulting consumer excitement has led the new brand to the success we all know. However, it is interesting to note that, in order to achieve this level of innovation, Nestlé has had to create an entirely separate organisation, with its own staff and office buildings. In a well-known Harvard Case, a senior VP from the company mentions how difficult it was to break away from the company’s culture: “internally, there was a lot of scepticism about the possibility to commercialise Nespresso. The business was physically moved out of Nestlé so that it could establish credibility and so that it didn’t have to fight against all the company’s rules”.

However, the new venture remained bound to Nestlé by a set of unconditional values and principles formulated by its CEO Peter Brabeck: “very simple, not a lot of words, no mission statement—just a list of the things we didn’t want to change at all, even as we evolved.”

What learning can we draw from the Nespresso case, looking at it through the lens of corporate reputation management?

1- Even large companies in more ‘traditional’ sectors can create disruptive innovations and enhance their reputation as an innovator.

2- Fostering cultural change internally is not always sufficient to drive radical innovation. Sometimes innovation has to happen outside of the company culture.

3- Maintaining the overall coherence with the company’s vision and purpose is critical to avoid stakeholder confusion about your activities.