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?