brand & reputation: a leadership perspective & reputation: a leadership perspective...
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Brand&Reputation:ALeadershipPerspectiveReputationConference2008
HenleyBusinessSchoolJohnMadejskiCentreforReputation
November25,2008
ElliotS.Schreiber,Ph.D.
ClinicalProfessor
BennettS.LeBowCollegeofBusinessDrexelUniversity
Philadelphia,Pennsylvania,USA
elliot.s.schreiber@drexel.edu
SeeingtheWorldfromthePerspectiveofCorporateLeadership
Managing Financial
Resources
Attracting &Aligning the
TalentAssuring Execution
• Financial targets & non-financial drivers• Shareholdercommunication
• Fiscal policy• Forecasting & budgeting• Capital expenditures
• Workforce acquisition, retention & performance management
• Performance reporting & review• Initiative management
Source: Balanced Scorecard Collaborative©—bscol.com
The Board holds the CEO responsible for 4 key objectives:
BasicPremise ChiefCommunicationsorMarketingOfficers(CCOs,CMOs)canhelpthe
CEOachievehis/herkeyobjectivesthroughastrategic*BrandandReputationManagementprocess
(*thewayinwhichanorganisationseekstoachieveadvantagethroughtheconfigurationofresourcesandorganisationalassetstomeettheneedsofthemarketandfulfillstakeholderexpectationsinawaythatdifferentiatestheorganisationfromcompetitors)
Thekey“valueadd”fortheCCOand/orCMOistoputinplaceaprocessto: Identifytheorganisation’svaluesandclosegapsbetweenarticulatedand“real”,
actionablevalues Helptheorganisationmaintainaperspectiveonallstakeholders,theirrelationships
andinteractions
Buildandmaintainrelationshipswithkeystakeholderstocreatevalue Connectcorporatebrandtoreputationinawaythatdrivesbusinessoutcomes
SixLeadershipChallenges/Issues1. BoardsandCEOsfeelunpreparedformanagingreputationrisk:
Issues: Theinsurancecompany,AON,surveyed360globalCEOsonriskconcernsin
2007
The#1concernof31categoriesofriskpresentedwasReputationRisk 48%ofCEOsfelttheircompanywasillpreparedforreputationrisk Boardsrecognizethecriticalityofriskmanagementandareengagedinthe
reviewofriskissues
2. CompaniesoftenlooktoCorporateAdvertising,CorporateSocialResponsibility,CrisisManagementandPhilanthropyasreputationmanagement: Issues:
Thesearetactics,notstrategy;corporateleadershipisexpectedtobestrategic
CEOsneedreputationandassociatedrisktobemanagedstrategically,asonewouldmanageotherrisks(e.g.,market,capital,legal,etc.)
SixLeadershipChallenges/Issues3. Reputationhasnotbeenclearlydefined:
Issues: Wecannotmanageormeasurereputationifwedonotknowwhatitis Withoutclarity,reputationbecomesa“catch‐all”phaseorasubstitutetermfor
publicrelationsorcorporateadvertising Nowbecomingusedasaeuphemismforsearchengineoptimisation
4.Communicationsprofessionalsofteneschewthetermbrand,associatingitwithmarketingandproducts:
Issues: Brandisbetterunderstoodthanisreputationbymanagementbecauseitis
taughtinbusinessschoolsandusedbystrategyfirmsasan“umbrella”term Organisationalbrandisinterrelatedwithreputation—agoodreputationrequires
thattheorganizationhaveawell‐consideredandactionablecorporatebrand
SixLeadershipChallenges/Issues5. BrandandReputationManagementaretypicallyfocusedon
communicationstoexternalstakeholders: Issues:
Actionsmorethancommunicationsbuildreputation Employeesarethemostimportantstakeholdergroupforanyorganisation
Thereisoftenafailuretounderstandthatrelationshipsbuildvalue‐‐customerserviceandstakeholderrelationsareoftenthepointsinnon‐consumerproductscompaniesatwhichbrandisdefinedatreputationisbuilt
6.BrandandReputationManagementaretooimportanttobelefttoanyonefunction: Issues:
Brandandreputationmanagementmustbeholistic,orenterprise‐wide‐‐weneedtointegrateacrosstheorganizationanddownthroughstrategicbusinessunitsandregions
Boardsneedtobefocusedonreputationsinceitdrivesordiminishesvalueandnotsimplydelegatethistomanagement
WhatisReputation?FortheOrganisation:reputationisanintangibleassetthat:
Thatoffersapromiseofperformance
Canbeusedtoshapeexpectationsandperceptionsaboutthecompany’sdifferentiationandabilitytomeetneedscomparedtocompetitors
Enhancesorganisationalvaluethroughrelationshipsthatbuildtrustandvalue
ForStakeholders:reputationisthebeliefthatanorganisationisdistinguishedfromitspeers:
Totheextentthatstakeholdersbelievethatthebehavioursandcommunicationsoftheorganisationresonatewiththeirneedsandinterestsandarebetterthancompetitiveofferings,theywillbeinfluencedtobehavetowardtheorganisationindesirableways
Theabilityofthefirmtoconsistentlydistinguishitselffromcompetitorsovertimecreatesa“haloeffect”thatprovidesgreaterresiliencetodifficultiesversuscompetitors
TheBrand‐ReputationConnectionBrandisownedbythecompany;Reputationisownedbystakeholders
Employees
Competitors
BusinessPartners
Media
Government
NGOs
Investors
Reputation
Brand
ORGANISATION BRAND• The self definition of how an
organisation wants to be perceived anddifferentiated from competitors
What factors create positive and differentiated perceptions?
How can we influence those factors?
ORGANISATION REPUTATION• The “vote” by stakeholders as to
whether or not the brand attributes andbehaviours resonate
Analysts
Communities
CoreAttributes
&behaviours
The Brand-Reputation-BusinessOutcome Value-Chain Model
9
Satisfaction
Retention/Attraction
Trust
Satisfaction
Reputation
Turnover
Trust
CorporateBrand
SymbolsCommunications
Behaviour
EmployeePerspective
CustomerPerspective
•Salary•Career•Culture
OrganisationCulture,Values&Strategy
Reputation
• Price• Quality• Service
Adapted from Gary Davies, Corporate Reputation and Competitiveness, p 76.
Fea
r, U
ncer
tain
ty &
Dou
bt
Complexity of Information in DecisionLow High
High
Brand and Reputation Strategies Dependon The Nature of the Organization
6
Driver: Personal Need Brand Strategy: House of BrandsDemand Created by: Advertising & Direct MailValue of Corporate Reputation: VERY LOWValue of Product Brand: VERY HIGH (P&G, Unilever)
Driver: Social AcceptanceBrand Strategy: Endorsed Brands Demand Created by: Advertising & Product EndorsementsValue of Corporate Reputation: LOW to MODERATEValue of Product Brand: HIGH (Air Jordan, Martha Stewart, )
Driver: Safety & SecurityBrand Strategy: Branded HouseDemand Created by: Relationships and 3rd
Party ReferralsValue of Corporate Reputation:
VERY HIGHValue of Product Brand: VERY LOW (Dell, Cisco, AT&T)
Driver: Ingredient PerformanceBrand Strategy: Sub-Brands Under a MasterbrandDemand Created by: Integrated Communications & ReferralsValue of Corporate Reputation: HIGHValue of Product Brand: HIGH (Intel, Pharmaceuticals, Marriott)
10
CreatingaStrategicProcess External:CreateaFrameofReferenceforyour
company: Whatstakeholderscanexpectfromyouintermsofproducts/service,investment,
employment,civicinvolvement,etc. Theframeworkshouldbecomean“organisationalimperative”:
• toengagemanagersandemployees• tocreateneededorganisationalchangeandactionsconsistentwith
communications
Internal:Developa“ReputationScorecard”tohelpmanageprogress:
Commonmodelofreputationthatisagreedto
ReputationRiskSWOTanalysisfortheorganization ObjectivesforCustomers,EmployeesandFinancialResults,aswellasfor
RelationshipswithKeyStakeholders
Metricsforeachobjective
ValuesaretheFoundationofReputation
ReputationConsistent, Trustworthy behaviours
Consistent Communications
Employee Commitment
Policies & Practices
Business Objectives
Values
Internal Controls &
Governance
Sta
keho
lder
Per
cept
ions
Resource Allocation
First‐ordervalues:Thosethatareintrinsictotheorganisation,embeddedinculture,monitoredandreinforced—connectedtothevaluesofstakeholders
Second‐OrderValues:Thosethatanorganisationcommunicatestostakeholderstoinfluencemarketperceptions,butwhichdonotnecessarilymeetthetestoffirst‐ordervalues
Intrinsicvs.ExpressedValues
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Financial Returns are a Proxy ofEmployee and Customer Satisfaction
Employee satisfaction and commitment are related to how employees’perceive their organisation is seen externally (Carmeli & Freund,Corporate Reputation Review, 2002)
There is a strong relationship between employee & customersatisfaction, and the interaction between these drives financial value(Girouard, Waukesha, Stowers, Barr & Franklin, Chicago School ofProfessional Psychology, 2007)
Companies perceived as good places to work earn returns double thatof others (Alex Edmunds, Knowledge@Wharton, 2007)
HOWEVER Schultz & Hatch, The Expressive Organisation (2007) found that 90%
of employees did not understand the company’s brand; 70% were notcommitted it
14
The EBP is an internal brand for employees, bothcurrent and future prospects
Builds understanding and actions of employees withthe external brand
Addresses two questions: 1. Why would a talented person want
to work here versus someplace else?
2. What can employees do to help enhancestakeholder value?
15
Employee Brand Proposition(EBP)
16
PuttingItAllTogether
LeadershipThroughaCouncilof“StakeholderRelations”
17
Communications
Marketing
Sales
R&D
Legal
Investor Affairs
Government Affairs
Human Resources
Strategic Planning
LeadershipinReputationManagement
Focus‐Defineyourbrandattributes,geteveryonetounderstandandagreetothem,andmakecertainthateveryoneiscommittedtothem
EstablishaCommonStrategyFrameworkthatintegratesbrandandreputation—theyareinterrelatedandcannotbeseparated
ConcentrateonBehavioursMorethanonCommunications
CreateanInternalCoalition‐‐usea“StakeholderRelations”Council
LeadershipinReputationManagement
BeAuthentic–makecertainthatyourcommunicatedvaluesareyourrealvalues.“WalktheTalk”,donot“TalktheWalk”
Inspire–emotions,notintellectualarguments,drivebehaviours
StrivetobeConsistentinEverythingYouDo—insideandoutsideoftheorganization
SeektobeDisproportionatelyValuedfromCompetitors
BrandandReputationLeadershipHelpsCompaniesAlignObjectives&ActivitiesatAllLevels
Corporate
Group
Division
Provides aframework forCorporate strategy
Process alsoprovides a framework forgovernance
Governance
Man
agem
ent S
trate
gy
Source: adapted from Balanced Scorecard Collaborative, 2003
Board CEO
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