Corporate Reputation Roundtable: Opinion formers

The CEO's role in shaping impressions about a company and the rise of content creation were among topics discussed as industry leaders joined Steve Barrett in New York for this Burson-Marsteller-hosted roundtable.

Participants:
Michael Murphy, MD, corporate practice, Burson-Marsteller
Vickee Jordan Adams, VP of external communications, Wells Fargo Home Lending
Paul Argenti, professor of corporate comms, Tuck School of Business at Dartmouth
Angela Buonocore, SVP and CCO, Xylem
Nicole Didda, VP of communications, Skanska
Michael Fleming, head of reputation strategy and stakeholder engagement, GlaxoSmithKline
Ashley McCown, president, Solomon McCown
Elliot Sloane, CEO, Sloane & Company
Ken Stern, cofounder and president, Palisades Media Ventures

Vickee Jordan Adams (Wells Fargo): It is the responsibility of everyone within the organization, but those with day-to-day responsibility to respond and advocate externally must look very broadly across the organization so that there is a consistent point of view to all stakeholders.

Angela Buonocore (Xylem): Xylem [which spun off from ITT in late 2011] is a pure-play company focused on water. Prior to launch, we did lot of interviews with customers and employees to hear what they though the personality of this new company should be and what this brand would stand for.

Thinking back to the question about responsibility for reputation, while I agree that everyone in the company has some role in it, the chief reputation officer of a company is the CEO. Frankly, the CEO is also the chief communications officer. It's my title, but it's her job. Moreover, a company's board has a very important role to play in the reputation of a company.

Paul Argenti (Tuck School of Business): Reputation is an outcome – it's not something you can manage. It exists as a result of the things you do. However, people really don't understand what it is, so it's easy for a marketing person to convince a CEO that it's a marketing function. In reality, it's a communications function to figure out how you manage your identity in such a way that you can have a strong reputation at the end.

I don't really understand why you would ever need a chief reputation officer in an organization. You need people who can do communications and people who can do marketing and focus on the brand. Then you hope for a great reputation at the end.

Nicole Didda (Skanska): The consumer now decides how, when, and where to engage with a brand. As such, it is very much everybody's job in a company to think about reputation. Communications, operations, marketing, HR, every one of those functions that deal with touchpoints to our key constituencies plays a role.

The role of chief reputation officer has really evolved. In the 1980s, it was definitely the CCO. In the '90s, everyone was sort of selling the CEO as the chief reputation officer. Now, with world being so transparent and the media so fragmented, it's everybody's job and, in a lot of ways, the consumer is in charge.

Michael Murphy (Burson-Marsteller): We need to be careful as communicators to not solely define a company's reputation by one individual because then you create this cult persona of a CEO. If that person steps aside, you have to start over.

You need to look at the entire C-suite and your stakeholders. We must think more broadly about how we define it and make sure that we're measuring reputation as much as possible. Start with the benchmark analysis. See what your reputation is, then try to measure it over time to see if you're moving the needle at all with the communications you're putting out there.

Ken Stern (Palisades Media Ventures): Everyone is responsible for telling and living the story of the company. Over the coming years, I'd be really surprised if we didn't see marketing and communications merge more and more because the divide between earned and paid is going away. The divide between communications and marketing will fall as well.

Michael Fleming (GlaxoSmithKline): A company's reputation rests on its employees. If you're employees don't believe in you or trust you, no one else will. That has to be a culture that's built and demonstrated from leadership. The executive suite needs to be accountable to the board. The board must take a legitimate and concrete interest in measuring reputation in some way and holding executives accountable for ensuring that the values that ultimately influence external stakeholders' opinion of your company are built into the culture, the processes, and the way you work.

Elliot Sloane (Sloane & Company): In terms of reputation management in the financial community, the CFO has a key role, too. A lot of our clients also seek help in negotiating regulatory and legislative issues. The way stories get told and the way branding is done needs to be filtered through the public affairs dynamic.

We are also seeing general counsel get more involved with communications, which is not always a good thing. There's this natural tension between the PR team and the legal team about what can be said and how. Ultimately, the CEO generally gets to make that call in terms of how far he or she wants to go on an issue.      

Ashley McCown (Solomon McCown): Communications people used to have both hands on the steering wheel, drive the bus, and control it. You can no longer control everything, certainly not reputation.

In terms of employees, communications is the focal point. We are the keeper of the flame, the keeper of reputation in terms of whether or not employees have a clear sense of the organization's values and direction. This is important because employees are the touchstones with a customer, a client, a prospect, a partner, or a regulator. If they believe in what their organization is doing, they are your brand stores.

Stern (Palisades Media): The comments made about CEOs remind me of the famous Warren Buffet quote: "I try to buy stock in businesses that are so wonderful that an idiot can run them because, sooner or later, one will." The best companies have values that survive leadership changes.

Buonocore (Xylem): We're all on the same page in saying that person doesn't own it alone, but how the CEO's vision is interpreted and then taken forward by employees in the most progressive of companies does help form what the outcome will be of the reputation.

Building a reputation: Simple yet effective

In the ever-expanding media landscape, these three companies have used simple, uncomplicated outreach to boost reputation.

CEO Stephen Cloobeck appeared on CBS' Undercover Boss in early 2012. While “undercover,” he learned his staff does not always live up to Diamond's motto of “Yes,” as in clients should never hear “no.”

Diamond Resorts International

Perhaps not the desired result, but the spot did raise awareness – 12 million-plus viewers watched and visits to the company's website tripled after it aired. Cloobeck also displayed the transparency consumers demand – and it was noticed.

“We know by watching you in Undercover Boss how much time and effort you put into your company,” was one of many comments consumers posted on the company's website.

Bringing scholarship contests into the digital age, the KFC Colonel's Scholars program had high-school seniors tweet an image and include the #KFCScholar hashtag. The prize: a $20,000 scholarship to an accredited public university within the winner's home state.

KFC

KFC's efforts toward US education, a subject top of mind now, especially compared to other nations, go far to position it as a good corporate citizen.

UnitedHealthcare
In partnership with the US Council on Aging and USA Today, the company this past August released its United States of Aging Survey. More than 2,250 Americans aged 60 and up shared their thoughts on issues such as financial security, housing, transportation, and health.

The annual content partnership will help the company track how the US is embracing the aging influx and making changes to ensure citizens' longevity. This survey takes it beyond the insurer role by positioning UnitedHealthcare as a key dialogue initiator and a leader in helping a growing population segment.

Helping the leader
Barrett (PRWeek): How do communications pros help the CEO be an effective leader for their company?

Argenti (Tuck School): The CEO is responsible for developing and creating an organization's strategy. The communications person's role is to get people to understand what the strategy is. When that gets articulated, the opportunity to create something takes place. Where that lands is your reputation.

Didda (Skanska): Skanska CEO Mike McNally has great vision, a very strong sense of our corporate values and who we are as a company, and always knows what he wants to communicate. I see my role as being the filter that ensures he's speaking effectively to a particular audience's needs and values, whether they are analysts, reporters, employees, or the public. Mike knows what he wants to communicate. My job is to tailor it.

Adams (Wells Fargo): Government relations, investor relations, and legal can play a key role in corporate reputation and corporate communications not only in terms of what we can say, but to whom we can say it, particularly in the legislative and regulatory environment.

Ultimately, CEOs are the decision makers, perhaps the final decision makers. However, they do not always have as much liberty to make the decision their gut says they should. Because of the variety of business interests – investor relations, government relations, legal implications – there's a great deal more consensus building around decisions that are made.

Fleming (GSK): It is critical to have a charismatic and articulate CEO who is an ambassador for the company externally, but can also be very effective internally. Organizationally, you need leadership that sends a very clear message about the way you do business and your company's values. Those values need to be so clear and apparent to the leadership team that there's no question about what the right decision should be when there are difficult decisions to make. Ultimately, those things have the most impact on your reputation.

Murphy (Burson): Particularly during transitions at the C-suite level, not enough value is placed on legacy leaderships, the people who have been with the company for decades who really represent what has made that organization a great place to work. As communicators, we need to check the pulse of those legacy employees to understand what has kept them there for so many years, where they think this company should go, and what will keep them there and continuing to be a legacy.

Sloane (Sloane): New York Life takes real pride in how it thinks about itself. It's a mutual insurance company, not publicly traded, and is there for the duration. It is solid and stable. The brand has extended well beyond the tenure of individual CEOs and chairmen. When a new CEO comes in, it's very difficult to believe the company will do a 180 and all of a sudden become a fast-talking, transaction-oriented kind of entity.

For the most part, however, the reputation of companies is firmly dependent upon success in the marketplace. If you stumble as a company, miss earnings, or don't deliver product on time it dings reputations. There's nothing any of us can do to solve a problem when the company's not performing. You ponder these things and try to figure out how to put your best foot forward knowing that you're only as good as the content and performance you have to work with.

McCown (Solomon McCown): The respect for communications has been elevated both inside an organization and with agencies working with clients. If a company has a problem, how you communicate it is critical to whether or not both employees and outside audiences accept it. Communicators can assert more control over things that used to be defined as another department because it has to go through the filter of communications before it's executed.

Argenti (Tuck School): Reputation has helped elevate the role of communications. Reputation connects more with strategy and helps you think more clearly about what the organization's vision is. However, there is still a lack of understanding about what a reputation is. Organizations have identities and realities that are true about them, but what you do with that is based on the people in the organization.

Companies change dramatically over time, but the people who don't work in communications or marketing or HR still don't have a good understanding of what can happen to an organization, what the risks are to your reputation, and what that can mean from a financial perspective.

Buonocore (Xylem): Crisis is the true test of who has built equity in the brand and the outcome of the reputation. A corporate brand and the product brands that sit underneath that are a promise. How well you deliver against that promise and how well you can recover when – not if – you have a crisis underscores how well everyone in the company understands its vision.

Adams (Wells Fargo): Wells Fargo is a 160-year-old company that believes in its vision and values, which have to do with helping our customers' financial success. People know our stagecoach, but there are so many cultural icons within the company and there's a real identity.

We made a decision at a critical point in the financial services industry to forego a series of products, giving up market share in the process, because those items did not fit with our values of serving our customers' financial needs. Imagine the pressure on our executives when investors, the board, and people in the field offering products are saying, “Hey, everybody's eating our lunch on this.” We made that choice and it's actually worked out for us. Corporate reputation need not be something focused purely on selling product.

Sloane (Sloane): The soft, squishy vision and values can work well internally. Those are important things to talk about to galvanize workforces. However, it has a big drop-off, at least in the worlds my agency works with, because people are focused on how the company is doing. It's harder to sell just being good people, caring about employees, and having the best 401K plan. Those things are important to certain audiences, but can fall on deaf ears when companies are being measured by their standing in the marketplace.

Didda (Skanska): I respectfully disagree. Investors, media, communities, every single audience out there – especially the younger generation – now really cares about whether a company is making money to benefit the community. Does this company treat employees fairly? Does it care about the environment and sustainability? Ten years ago, we didn't even think about such things. All we thought about is the customer, sales, stock value. Those things are always going to very important, but now the soul of the company and who it is, not just what it does and offers, has become so crucial.

Argenti (Tuck School): I disagree, too, but for a different reason. Even internally, companies are actually still more focused on the things you're saying they're externally interested in. Shareholder value and the notion of making money is still a big part of what drives management teams. Let's face it – the language of senior management is numbers, not values.

Externally, however, there's a reason Walmart's strategic principle is Save Money, Live Better. The “Live Better” part feeds into something that is critical to society today. We know you can make more money by doing things that are ultimately good for society rather than doing things that harm it long term. But management, shareholders, and certainly the Street are still driven by a short-term focus that ends up hurting reputations in the long run.

Sloane (Sloane): Not to backtrack, but there are a number of clients that have stumbled, but who do wonderful things in their communities. They care about the world they live in and their employees. They're just not equivalent issues. When you're talking about corporate reputation, the fact that you donate 10% of your pre-tax profits back to the community does not mitigate performance problems. It doesn't mitigate a strategy that's failing.

A lot of those softer values work really well internally and drive employee engagement, but if you can't deliver on the strategy, if the CEO can't communicate what it is that's special about this company and why they should be standing out as a thought leader and a market leader, you still have these reputational issues that don't get fixed.

McCown (Solomon McCown): There are plenty of studies that show people are willing to pay a higher price for a product from one company because they think it shares their values. So if you're good at communicating your value proposition and what you're doing to make the community better, you'll see that those two are not necessarily mutually exclusive.

Fleming (GSK): The values your organization is based on must translate to value to your customers and external stakeholders. In a commercial sense, that means the values have to be imbued in the strategy your business is executing. Part of strategic, commercially oriented success revolves around having good relationships with an array of key stakeholders who can influence how successful your business is. It can also open up partnership opportunities, which are incredibly important to commercial success.