All in Reputation

Some bickering broke out this week between Michael Arrington at TechCrunch and the folks at Twitter about some documents leaked to Mr. Arrington and then published in a column/post. I haven't been following the chatter about it, but there is a good summary at Social Media Today.

What caught my eye from Amy Mengel's report was this comment:

"But, let’s all remember that bloggers, like Arrington, aren’t journalists. They don’t operate under a professional code of ethics. they don’t report to an editor or publisher who tells them what to write about or what they can or can’t reveal. Many of them are ethical, many of them are former journalists, many of them would have chosen not to publish the documents."

Separate from the facts or otherwise of the particular events (now heading to the courts apparently), the question in my mind is this: When does a blogger who writes for a group-edited blog become de facto a journalist and perhaps subject to the same standards of ethical conduct to which journalists are expected to adhere (to the extent that they do in reality anyway)?

Wikipedia describes Mr. Arrington -- a lawyer -- as a "founder/co-editor" of TechCrunch. Many think of TechCrunch as an online news source. So, if it walks like a duck and talks like a duck . . . ?

Reputation risk for companies is an underestimated consequence of global concern about climate change. Rather than expending more inventive energy on denying a relationship between CO2 concentrations and global temperature, smart businesses should be looking for ways to gain come reputation capital by managing climate change risks in cooperation with communities and global agencies.

Last week, the UN Global Compact and the Pacific Institute released a short paper on climate change and its impact on water which recommends a number of sensible management strategies. The context for the paper is the statement that:

"There is overwhelming scientific evidence that burning fossil fuels has altered the chemistry of the atmosphere. Figure 1 shows that atmospheric CO2 concentrations are reaching levels that are likely higher than in the last 20 million years.Rising CO2 concentrations along with other greenhouse gases (GHG) are changing the planet’s climate. Global mean temperatures have increased three-quarters of a degree Celsius since 1900 and 11 of the 12 warmest years since 1850 have occurred since 1996.These climatic changes are expected to accelerate over the coming decades."

The paper argues that a significant body of scientific evidence suggests climate change will affect the scarcity, sustainability and quality of the global water supply, which increases business risk, especially with respect to energy supply management, raw material inventories, industrial production systems and the associated financing costs.

Reputation risks can easily follow, for example as "people become more aware of their rights to access water . . . local businesses may find themselves using copious amounts of water in regions where people lack sufficient water to meet basic needs."

The paper outlines some business strategies which mirror two dominant themes on how businesses today need to think of corporate responsibility (CR): CR as part of business strategy discussions (integrating "water and climate change into strategic business planning and operational activities") and engagement of stakeholders in responsible planning (engaging "key stakeholders as a part of water and climate risk assessment, long-term planning and implementation activities").

Philip Sheppard, a past president of the International Public Relations Association, brought to my attention this exhilarating and numbing video called Did You KNow? posted on the Pilot Theatre (from Wakefield West Yorkshire) website . . . Lots to make you think about business, communications, knowledge management and North American education (strengths and failures).

More Fortune 500 companies are blogging, but the pace of growth is still shall we say restrained.

The full results of a study by Dr. Nora Ganim Barnes, Ph.D. and Eric Mattson, CEO of Financial Insite Inc., a Seattle-based research firm are available here and a summary of the key findings are in a news release by the Society for New Communications Research.

Of the findings posted in yesterday's statement, here are few of particular interest:

  • 81 of the Fortune 500 or 16% currently have public-facing blogs, compared with 39 percent of the Inc. 500, 41 percent of the higher education sector and 57 percent of the nation’s Top 200 Charities.
  • 28 percent of the Fortune 500’s blogs link to Twitter accounts
  • 90 percent of the Fortune 500’s blogs have the comments feature enabled

I have no idea if this post from Molly Wood truly reflects Apple's approach to public relations ("hammer and hammer and hammer and hammer"), or if it is just the usual journalistic hectoring of public relations people doing their job.

But the pull-out quotation from the Wall Street Journal that prompted the piece demonstrates why many business people (and the demos at large) occasionally -- okay, often -- question the devotion of journalists to seeking truth from facts. Since the WSJ article uses as its source "people familiar with the matter", "these people say" and "they say" it is also fair game to conjecture, as The Molly does, whether the publication has been spun by a zealous public relations "machine".

The blame, though isn't with the public relations people, as Wood accedes, but with lame and now inadequately supported journalism:

"It’s not a crime for a company to have a good PR machine. It’s working for Apple and it has for a long time. But this is a nation that is, at the moment, finding itself in quite a pickle because we blindly believed everything that companies were telling us. So, if we’re trying to be skeptical about, say, large financial institutions and their outlandish and/or reassuring claims, shouldn’t we also cast the same critical eye on a convenient flood of information that does little other than improve Apple’s stock price a week before they have to answer to angry and worried shareholders? Or, hey, maybe the Wall Street Journal just trying to boost the Nasdaq on purpose. You know, to help the economy."

Maple Leaf Foods (not a client) today launched a blog in response to the 2008 Listeria deaths caused by eating its deli meats and, as with much of how the company handled the crisis, it is a very good model for the language and tone of effective messaging . . . frank, honest and contrite. (Although its design is quite lackluster.)

The first post is by CEO Michael McCain and here is how it begins: "Since August 2008 twenty-one Canadians have died after eating Maple Leaf deli meats contaminated with Listeria.  We all watched in horror as the worst food safety crisis in modern Canadian history rolled across the country." Now that's frank and the antithesis of how many companies begin apologies after serious events.

Later in the post Mr. McCain writes "This was by far the most awful event in the one hundred year history of our company.  I can’t properly describe the overwhelming sense of grief and responsibility we all felt … I felt, personally (emphasis added).  You may remember seeing me on television back then, apologizing for the tragedy and vowing to develop the most comprehensive anti-Listeria program of any food company in Canada." He then goes on to outline in details the changes Maple Leaf has made to reduce Listeria findings in its plants.

Even more significant he actually raises three subsequent issues related to Maple Leaf Foods' safety performance that most people had likely forgotten.

Textbook . . .

Thanks to a colleague with a personal blog here (really good, especially if you like indie music), I took a look at a CBC report of a blogging campaign targeted at pushing the song of an independent band to the top of the iTunes charts, bypassing the major record labels. The campaign -- called Bum Rush the Charts -- asks people to purchase a copy of the song Mine Again, by the alt-rock band Black Lab, at the iTunes Store on March 22nd.

Says podcaster Mark Yoshimoto Nemcoff, the campaign organizer, "Taking an artist like Black Lab and making them No. 1 on the [iTunes] charts would be making a statement. It would be like giving the music industry the finger.”  On Nemcoff's blog (here), he describes the motivation behind the campaign as creating a social movement: "Podcasting gets little respect from traditional media. To them we're little more than a joke, than amateurs. What they don't understand is that podcasting is more than just a delivery mechanism - it's a social movement."

Since I'm personally (let me tell you about my background sometime) and professionally (our clients can sometimes be the benefactors or objects of these campaigns) fascinated with the potential of such social movements finding a home online, I will be watching to see how viral this becomes. Stay tuned. 

The CBC, Canada's national radio network, is airing a six-part series called Spin Cycles: A Series About Spin, The Spinners and The Spun, developed and hosted by -- you guessed it -- a journalist named Ira Basen.

Despite a less than auspicious first episode, in which the usual hoary shibboleths are trotted out, I am willing to give the series the benefit of the doubt. I will listen to all of it without prejudice and comment on each episode from the perspective of someone who has been on both sides of the great divide -- magazine journalist and public relations professional. But I will only write about those things that stand out -- egregious misinterpretation or welcome insight -- not every aspect of the program. So, if you're interested in Mr. Basen's point of view, you will have to tune in every Sunday night or click through to the CBC's web site.

Let's start with episode one:

Point One:

The premise of the series seems to be that public relations is only about the art of stage-managing the media. This may be what politicians do; but it is not what absorbs many of us in the profession today. There are more effective avenues for engaging audiences in conversations about ideas than hoping a journalist gets the story right . . . social media for example; or dialogue panels; or co-creative developmental approaches to tackling tough community issues or decisions.

I know it may seem like a type of sophistry to suggest the series should be about something else. Really what I am saying, though, is I hope that in future episodes the series rises a little above the increasingly irrelevant matter of what journalists and PR professionals think of each other.   

Point Two:

From Mr. Basen's perspective public relations is synonymous with spin or "an alternative to outright lies." I have another definition that is more inclusive of other actors in the tragicomedy of supposed rational public argument: Spin is the wilful distortion of facts and the manipulation of half-truths to create a more persuasive or one-sided story. The most blatant spin in the last few years has to be, as Mr. Basen rightly points out, the monumental myth of weapons of mass destruction.

But looking at spin from my definition, one is justified in asking who are the real "spinners"? Could they as easily be journalists who select facts to make a more compelling story, or advocacy groups (some NGOs among them) who use selective science to defend a case. Here is an example of spin right from Mr. Basen's mouth: "But truth is a word that makes many people in PR uncomfortable". Is that because we are more comfortable with lying? Are you, reader, part of the many? (By the way, there are a number of other obvious examples of journalistic spin in the series. Perhaps others who listen in could point me to their favorites.)

Point Three:

Unlike Mr. Basen, I don't see "messaging" as ipso facto "spin". Messaging to my way of thinking is making a point of view apparent . . .  with simplicity, clarity and force. It is an element of Aristotelan rhetoric and is the foundation of ordinary discourse. Using it on behalf of a client to explain -- truthfully and openly -- a point of view is much less manipulative than juxtaposing a terrifying image with an alarmist headline. Of course, when messages are treated as dogma they can't help but sound like spin.

So, I await episode two with some unease.

An international conference in Athens, called the Internet Governance Forum, will apparently put Google on the spot over its self-censorship of its search engine in China. According to an article in yesterday's The Guardian by technology reporter David Smith (who is blogging from the conference starting tomorrow), Google will be attempting to defend its point of view in some smaller workshops at the event. Google's head of global public policy -- now that's an impressive job title -- Andrew McLaughlin explains that by hiring Chinese employees to be part of a "free", web-based company it is championing the cause for change in China.

Before I explain quickly why I side with Google on this, let me admit that the company's explanation sounds a lot like typical 19th century new-colonial self-justification for bringing civilization to backward peoples: 'If we let them work in our companies while we pillage their resources, they will become more enlightened, less brutal.' Google's take on it is that its very presence will create an inexorable drive towards freer thought.

It's for more politically sophisticated people than I am to assses whether this accurately captures neo-colonialist thought. But in the case of the point of view is probably right. The very presence of the Google search engine infrastructure creates an aspiration for free information. . . among its local employees, among their friends and among the people with whom they converse online. And it will help enliven nascent web-culture which, as we all know, is anarchic in form and democratic in sentiment.

Besides, I am always a little leary when people suggest that companies should do more to direct government policy in other countries, as some are suggesting of Google, Microsoft et. al. Isn't that the job of governments?  

A section of the NYSE magazine's CEO Report 2007 addresses how CEOs monitor their companies' reputations. Topping the list is something called "informal discussions with relevant parties". I would like to think that means regular dialogue with customers, communities and other stakeholders . . . Of course, it could also be referring simply to conversations with peers at the country club, or quarterly analyst conference calls. A little vague don't you agree? 

Of equal interest, though, is that discussions with, or surveys of, employees ranks second as a CEO's method of monitoring corporate reputation, especially in companies with market caps of $3 billion+. Frankly, I find it surprising that CEOs see employees in that way. But if it's true, then the finding speaks to the importance of structured, robust, dialogue-based internal communication programs, and the readiness of CEOs to sanction such programs if they help orient the company's external reputation-building.

Monitoring the Internet ranks almost as high as analyzing media coverage as a reputation bell weather especially for companies with market caps under $1 billion (63% of this group favor analyzing media coverage with 59% monitoring the Internet .)  In fact, as Leslie Gaines-Ross points out "one-third of CEOs (31 percent) . . . report that they spend more time on media relations compared to three years ago. In contrast, they spend only 22 percent more time on customer relations". I guess all those nasty front pages stories about C-suite malfeasance and boardroom espionage are keeping international business media relevant!

Being a firm believer in the quality of Hill and Knowlton's distinctive competence as an international communications consultancy, I admit some reluctance to drawing attention to a competitor's blog.

However, I just came across Leslie Gaines-Ross' blog called 'reputationxchange'. Ms Gaines Ross is with a competitor agency. Neverthless, she has always been a thought leader in addressing questions of a CEO's responsibility (in addition to devising business strategies and -- in a few cases -- managing the beneficial timing of grants of stock options) for building and defending corporate reputation .

The opportunity to read what she is thinking in near real time about these and other reputational matters is just one more benefit of social media. 

Now here's an astonishing fact . . . or at least I think it is. More than 35% of the recipients of Directors & Boards magazine have used an iPod. Think about it: of 298 people who identify themseves primarily as directors of publicly or privately held companies, 100 of them are iPod users. And the average age of respondents is 55 years old. Assuming many are listening to reggae -- I do and I am 56 -- that still means there may yet be a future for podcasting as a means of reaching decision makers.

What else does the study tell us? That 66.2% of directors regularly read electonic or online versions of business media; that 41% read blogs covering business or personal issues; that 65% read online stock message boards related to their company and/or personal investments; that nearly 88% of them rate their personal comfort level with technology as excellent (41.2%) or good (46.6%); and that almost half have voted electronically on a board decision.

There is a lot more in the study about fears of hacking, theft and confidentiality. But to me these numbers are incontrovertible evidence that we are in the era of "The Wired Board" as the study is called.

Adjust your strategies accordingly. 

Pepsi's reputation certainly gets a boost from the news story that it handed over a letter it received from a team of suspected con-artists -- one of them a Coke employee --  offering to sell Coca-Cola trade secrets. About the incident, a Pepsi spokesperson said "Competition can sometimes be fierce, but also must be fair and legal."

Score another one for honesty and transparency in corporate communications.

Last Friday in Canada we presented our qualifications to a major North American energy company in that most bracing of exercises in the consulting business -- the pitch. My role was to be part of a putative "expert" panel and answer a question about reputation building. (I am too diffident about my knowledge of this or anything to claim this without quotation marks.) Herein my answer -- reconstituted for posting:

Building a company's reputation today is tougher than it has ever been . . . at least since the days of the robber barons in the 1920s, or perhaps the England of Dickens' Little Dorrit, Great Expectations or Bleak House. And once built it has never been so fragile or more susceptible to challenge. It's the same with trust. Trust in what a company says about itself has never been harder to fashion nor so easily abrogated. The social philosopher Frances Fukuyama (Yes, I did quote him in my response.) has said about trust that it can be easily and quickly diminished if a person or a company is opportunistic or unwilling to engage.

A company may define and defend the social heart of its core values, but there are a hell of a lot of people ready to say prove it. These are the same people who when considering entering a customer relationship with a company will go first to Google to do a little background research. What they may or are even likely to find  is something unflattering, perhaps controversies about the company which evidence opportunism or which put into question the extent to which it can be trusted.

What does this all mean for corporate reputation? What it means is that corporate reputation isn't about a single orgasmic moment when all the corporate positioning stars are aligned. It's about a journey in which a company has to constantly "prove it".

That was my answer, more or less.

There is an interesting piece in the Sunday New York Times by Adam Nagourney about the impact of the internet on US politics. Political campaigners are looking at how to use podcasts to expand the domain for political messaging, Friendster and Facebook to reach new audiences, and blogging to insinuate themselves into sociopolitical conversations. Such techniques as "viral attack videos designed to set off peer-to-peer distribution by e-mail chains without being associated with any candidate or campaign" are making their presence felt as well.

Leave it to American campaigners to come up with some of the nastiest uses to discredit leaders of the opposing stripe. (The left and right are equally adept it seems.) For example, there is some ingenuity evident among Tennessee Republicans who set up a web site called "Fancy Ford" to highlight what they perceived as the egregious spending habits of a Democratic representative.

In Canada,  I don't think we are quite there yet . . .

For those who believe the battle against corporate fraud ended with the prosecutions of senior executives at Enron, Tycos and Worldcom, or that discussing the importance of improving business standards of behaviour has been over-shadowed, say, by the "hotter" topic of corporate governance . . . an editorial in today's New York Times suggests otherwise:

"It is sad just how predictable it was that the reconstruction of Iraq would be marred by fraud, dishonesty and profiteering. Last week Robert Stein Jr. was charged in federal court with a slew of crimes allegedly committed while he was financial officer for the American occupation authority in Iraq. The affidavit in the case says that Mr. Stein accepted over $200,000 a month to steer contracts to an American businessman whose companies often did poor work and sometimes did no work at all . . . There must accountability higher up for this clearly bad judgment. Unfortunately, this is only the beginning. Officials at the Office of the Special Inspector General for Iraq Reconstruction say they are pursuing 50 more cases and have already referred at least six more to prosecutors."

In an excellent piece in The McKinsey Quarterly 2005 Number 3, McKinsey & Company worldwide managing director, Ian Davis, makes the following recommendation which speaks directly to those who argue that social and ethical issues are now "peripheral to business management":

"(Business leaders) need to shape the debate on social issues much more consciously by establishing even higher (but appropriate) standards of integrity and transparency within their own companies and by becoming much more actively involved in external debates (such as those in the media) on issues that shape the social context of business."

It will be fascinating to see which business leaders step forward to denounce the "fraud, dishonesty and profiteering" identified by the US Office of the Special Inspector General for Iraq Reconstruction.

A couple of weeks ago, Hill & Knowlton Canada held a professional development weekend called 'Values in Action'. The goal of this annual -- more or less -- training session is to discuss with junior consultants principles and best practices in our discipline so they are better armed to become trusted advisors to our clients. I think most participants would agree that one of the best sessions at Values in Action (and not just because I facilitated it . . . LOL) this time round was a client panel in which H&K consultants and a half-dozen clients discussed what clients are looking for in their relationships with us.

Herein, then, a completely subjective summary of key ideas I took away as moderator:

  1. Clients like our faithfulness to some of the simple things . . . living up to commitments, returning calls promptly, thinking strategically and proactively, coming up with creative ideas for marketing "mundane "products, acting like a small agency yet making big agency resources available if needed, and finding ways to create dialogue
  2. Clients also like to see us provide structure for them in the delivery of our services. They are pulled in dozens of different directions, so require from consultants clear project workplans and reminders about decisions required and deadlines to be met.
  3. Consultants could benefit from spending some time in their client's shoes. There is a feeling among clients that we don't fully understand the internal pressures that drive the way they act . . . pressures to cap costs, lack of decision discipline among senior executives within their organizations, and competing interests internally through which they have to navigate.

When it came to discussing significant business trends likely to influence decisions about purchasing communication services, there was good news and bad news: The good news (at least for H&K, not our sister advertising agencies) came from a client in the packaged goods sector -- and confirmed by others on the panel -- who anticipates a continuing shift of money out of advertising and into PR and online marketing; the bad news is that all our clients don't see an end to cost control pressures within their organizations.