Eskom becomes a Learning Company

What’s the point of history other than to teach us ways not to repeat the same mistakes?

This is why it is so gratifying to hear Eskom CEO Jacob Maroga say that the last year’s load-shedding debacle was a learning experience for the organization.

In an article : http://www.southafrica.info/business/economy/infrastructure/eskom-260109.htm,Maroga said his organisation had put in place measures to prevent past mistakes, including putting in place a maintenance schedule,improving infrastructure and beefing up capacity and skills.

“The challenges we faced in the past have made us to be wiser to deal with other challenges,” he said.

Peter Senge was not wrong in his seminal text – The 5th Discipline. I always keep my 5th Discipline Fieldbook – Strategies and Tools for Building a Learning Organization, close to hand. This book I feel is vital reading for any manager driving change.

On Page 49 he writes: ”Learning in organizations means the continuous testing of experience, and the transformation of that experience into knowledge- accessible to the whole organization, and relevant to its core purpose”

Have you read the Fieldbook? It combines OD and practicalities in a way that makes it essential reading for Reputation Managers, Organizational Development and Performance Enhancement experts.

The Mandarin word for Crisis contains two ideograms, the one shows that the word presents opportunity and the other that it presents danger and potential disaster.

This implies that how we respond to challenges is crucial. It is a pity that Eskom had to first damage their reputation, before they started to learn, but it is commendable that they have been prepared to, and are doing so.

Positive action and behavior supplanted by major communication interventions will eventually restore a tarnished reputation.

Financial Institutions do not take Risk Management seriously

I just read an interesting article in the Business Report which stated that the global financial crisis is largely the result of financial institutions not taking risk management seriously.

The article contained a number of interesting pointers and is based on a KPMG survey on risk management in banks which was released on Monday.

See http://tinyurl.com/aqqaxg

The article states that risk management was just a support function and an interesting finding was that though risk management programmes exist, there were shortcomings in their approach.

This correlates with my experience in teaching understanding about reputation risk. Worldwide reputation risk is seen as the one risk that is the most difficult to define and manage. Therefore it is often left to chance and dealt with post event.

It just goes to show that if there are problems existing with traditional risk programmes, then reputation risk is even less understood and managed.

In my master class workshops I show the audience three ways to define reputation risk. It is only then that the reality dawns on them, how to mitigate it.

(If you are interested in learning more about Reputation Risk, and whether it is a strategic risk on its own or just a consequence of a risk, register for my next Reputation Risk Management Master Class).

Do you still trust a Lift?

I read an interesting article today about how on Monday, 13 people were trapped in one of the courts lifts (elevator) at the Johannesburg High court.

When the group were rescued, three people had passed out – two from the heat and one after suffering an asthma attack. A Few weeks ago the same thing happened at Johannesburg Hospital (now called the Charlotte Maxeke Hospital)

This poses some debatable questions. How can we put our trust in the courts, if we cannot trust the building in which it is housed?

Levels of maintenance creates perceptions, sometimes unwanted.

It also raises questions about risk appetite. The other day I was in a lift in a building,going from the 13th floor to the bottom. On our disembarkment, I asked the CFO about whether the company had a policy stating that key executives should not travel in the same plane or car together.

He stated affirmative, upon which I said: ”But we all got in the same lift together” – there were three of us.

Last year, the Department of Labour conducted spot-checks on lifts in Durban, discovering that in more than 55% of cases, they were not adequately serviced.

Now, some will say, that lift accidents do not happen often…the probability is low. Sure, but the organisation’s reputation is still tarnished.

Customers experiences in a lift creates anticipation for future assocations with the institution.  The mere fact that I read about the level of maintenance, says clearly that the reputation of the institution is being affected.

And that, can take longer to repair, than some maintenance schedule.

(For those interested to find out how an elevator works, go to http://science.howstuffworks.com/elevator.htm)

Social Media needs to form an integral part of your Engagement Plan

Like many others, I have slowly getting to date with my reading workload. One of the blogs that appears on my want to read list is Shel Holtz’s A Shel of my Formal Self.

For those of you who do not know who he is, go to:

http://blog.holtz.com/index.php/weblog/research_brief_links_engagement_business_improvement_to_internal_use_of_web/

In September last year he blogged about research that was conducted by the Aberdeen Group that shows that those companies who outperform others, all tended to have better and more effective social media engagement strategies.

He started his blog post with: ”The value of enabling social media for employees, both inside and outside the firewall, keeps getting reinforced by study after study, yet organizations continue to block access to external sources while resisting internal implementation citing excuses ranging from bandwidth and storage limitations to fears of diminished worker productivity”

Does this sound familiar? All the excuses and reasons?

The gist of this article and it is well worth reading, is the impact that social media can have -  even if management thinks being on Facebook is goofing off, it may have real value.

The value of social media in recruiting, learning and development and organizational development has become very apparent, useful and undeniable. The mere fact that Aberdeen joins companies like McKinsey, Gartner, and Forrester in endorsing social media tools as drivers of business improvement can only help those trying to make the case for internal social media with those inclined to resist it.

 

Technorati Tags: Stakeholder Management,Social Media,Engagement

Ernst & Young releases Business Risk Report for 2009

The Ernst & Young’s Business Risk Report for 2009, released on Friday, outlines the top 10 risks to business across 11 industries.

“There are great opportunities despite the difficult times ahead,” said Ernst & Young director of advisory services Celestine Munda. Risk management will help South African companies prepare for the worst to achieve the best, the report said.

1. In the 1st place is the credit crunch with firms in asset management, real estate, insurance and banking being hardest hit. Capital-intensive sectors like power and utilities are also feeling the pressure of a tighter credit environment.
2. Regulation and compliance, 2008’s top threat, has dropped to number two this year. Experts anticipate more regulations will be put in place due to global market conditions, but they believe these regulations should be more balanced. “There needs to be a more pragmatic approach to regulations, especially in the financial sector.” said Munda. “As we globalise, we are exposed to different regulatory practices in different countries, making it more complex.”
3. Deepening recession is in the third spot with funding drying up, numerous leading global firms closing their doors and consumer confidence spiraling downwards. “The global economic crisis is probably going to get worse, we don’t know how much worse, before it gets better,” said Munda.
4. In the fourth place is Radical Greening (What is your carbon footprint?).Environmental & Sustainable practices will be under the spotlight.
5. Non-traditional entrants are named as the fifth business risk.(This impact has already been seen – through surveys conducted by the Reputation Institute and Weber Shandwick. As Prof. Charles Fombrun have said:”Watch out for competitors, they will come into your industry and do it quicker, faster and better than you. Just ask Sony when they were surpassed by Samsung  in the World’s Most Admired Company survey)
6. Cost containment. Ernst & Young said companies have to maintain a careful balance between the risks of cost-cutting and talent management if they are to succeed. These business risks are ranked sixth and seventh respectively.
7. Attracting and retaining talent. Just because there is a recession, due thought needs to go into giving people the red card.
8. The eighth business risk is executing alliances and transactions. This remains crucial to business strategies of leading firms in telecommunications, media and utilities, even as tightening credit conditions have resulted in fewer mergers and acquisitions.(Think about who you want to get into bed with)
9. The ninth risk is business model redundancy, forcing industry leading firms to reinvent their corporate strategies.
10. Lastly, reputation risks need to be considered. Companies are here to make money, but they cannot survive on profit alone. There needs to be a combination of both profit and a good reputation if businesses are to survive, said Munda. “Corporate governance is becoming more transparent and I believe this will continue.”

See, you cannot ignore your reputation. It is woven into the fabric of the company.

Question to you: Is Reputation part of your company’s DNA? If you say yes, how do you know THAT. If not, what strategies will you use to embed it?

Technorati Tags: Risk Management,Corporate Reputation,Reputation Risk,Management surveys

Checklists – a Vital Tool for Reputation Managers to use

Checklists are a useful tool that any budding Reputation Manager can use. Not only do checklists enable a manager to anticipate and forestall events,
they also help to initiate a course of action that needs to be taken. In today’s turbulent society, a manager is judged by how well he or she responds to crises and critical issues and manages to keep the organisation’s reputation intact.

How quickly and adequately these issues and incidents are detected, analysed, and resolved spells success or disaster for an organization.

By developing a set of checklists to which items can be added; a Reputation Manager will over time have tabulated and recorded his or her approach to
handling incidents that could affect the organisation’s reputation.

A manager’s use of a checklist can be likened to that of an airline pilot. I undertook but unfortunately due to work commitments; never completed the program to obtain my PPL – private pilot’s license. We were taught that before any aircraft leaves the ground, the pilot must conscientiously run through an exhaustive checklist of instruments, linkages, wheels, hydraulics, servomechanisms, etc checks. He needs to check every single unit, for failure of any single item could mean disaster, and remembering to check everything could mean a safe flight.

We used a document called an inspection flight pre-checklist. This document had to be completed every time before any take-off.

This checklist was not designed to tell me how to take off. It did not instruct me how to land. Its purpose was to ensure that the pilot has overlooked nothing in his prevention of accident or has been reminded of every procedure to achieve a successful flight. In Health & Safety Consulting we use similar emergency and other inspection checklists with great effect.

Every organisation will be faced with an opportunity to build, sustain or protect their organisation at some time or another. By developing checklists for every driver of reputation, categorizing them into opportunities, issues and potential crisis response strategies, the Reputation Manager will have developed a very valuable database that can be used to build intellectual capital in the organisation.

Powerlines No. 82

Welcome to the most recent edition of Powerlines, my newsletter covering Strategic Reputation matters.

This issue features the following commentary, articles and event details:

1. Water Resources – A New Risk

2. The Stumble Rate – An interest view on how companies lose their reputation

3. The use of Humour – a Subtle tool

4. Understanding the Rules of Engagement

5. Social Media and the Tyranny of the Urgent

6. Dates for my next Training Courses

7. A List of Popular Presentations

Just click on the link – Please let me know what you think of the Powerlines newsletter.

Just click on the link – powerlines-number-82

Please let me know what you think of the Powerlines newsletter.

Is your company at risk of damaging its reputation due to noncompliance?

In August 2004 I wrote an article in my newsletter Powerlines Number 50 that is well worth repeating today.

Why?

Well, if you have been reading the papers lately, you would have noticed that quite a few organizations have received nasty fines from the Competition Commission of South Africa for price fixing and other anomalies. And, these are the ones in the limelight.

PricewaterhouseCoopers have found in one of their research studies that compliance failure is one of the biggest reasons for reputation loss.

Here is the article:

A company was fined a heavy penalty the other day for a workplace accident that was caused by the company managers condoning illegal actions, because that is the “way we have always done it in the past”.

In this case an unlicensed driver of a forklift caused an accident. The company decided to plead guilty being negligent in terms of the Occupational Health & Safety Act, expecting a thousand rand fine, but the court decided a fine of R10000 would be more appropriate.

The judge’s words: “Do not think you can just come in here and walk away with a small fine and continue the practice. This fine will help you to take Health and Safety issues seriously”.

What if the accident resulted in a death and the company had no proper safety practices in place? According to the law the CEO could then be held negligent, and he could receive a sentence of two years in jail and a fine of R100000. With that the media would have a field day!

Luckily in this case, no media reporter picked up the case, so the damages were confined to R 10000, but what if they did?

Organisations have two kinds of visibility to deal with.

The first is planned visibility, which is caused by day-to-day operations and actions by your organisation. The second is unplanned visibility, which is caused by the vulnerabilities you face due to the very nature of your business. These threats are caused by employees, environmental threats, safety issues and government intervention due to a company’s noncompliance to a changing legal environment, and unplanned visibility often does more harm, because of its editorial value.

In this case the company caused problems for itself by not taking the law seriously. In South Africa laws are changing “thick and fast”. Keeping up with all the new legal developments is difficult. Maintaining compliance is even more challenging. Fortunately, employers can take practical, proactive steps to maintain compliance and reduce liability risks.

Here’s a list of some of the steps you can take to reduce non-compliance:

• Take appropriate measures to ensure that you receive timely notice of new legal developments, and that someone be instructed to evaluate its potential impact. Often in companies this is the job of the company secretary to evaluate the potential impact of for instance Internet legislation and the HR department to evaluate Employee Equity and whistle blowing legislation on company policies.
• Take note of internal developments and their impact on the company’s legal obligations. Reengineering efforts and business expansions can have an impact on employee legislative matters.
• Find out which policies are being complied with and which are not working anymore. Review current procedures and policies of your organisation — especially those regarding good business practices, including those to reduce risk of product contamination, etc; what hazardous chemicals are used; how product is labelled for distribution; and, what mechanisms are in place for communicating externally and internally. A simple exercise is to conduct a quick survey amongst senior management or the crisis team. Ask them to list those current procedures and policies that need to be examined and documented, or to list those that are no longer in use or working in practice.
• You could even set up a web based survey using http://www.surveymonkey.com, or http://www.zoomerang.com/- Some of these sites offer a basic free survey. This technology can help you to quickly gauge opinion and get a feel for issues surrounding compliance.
• Identify all the relevant legislation concerning your products and services. Consult various government departments and in-house or external legal counsel to ensure that nothing has been omitted. Measure your organisation’s compliance with these laws and evaluate likely impact of non-compliance.
• Review your approach. The old Latin maxim: “Ignorance of the law is no excuse” applies here. What is often ignored is the reputational impact of business decisions taken. Taking a minimum legal compliance approach in your business may not be enough to avoid potential litigation and the ensuing publicity that could accompany it. What about your company’s role in becoming a good corporate citizen and paying attention to the triple-bottom line? Should you go beyond what is legally acceptable? A useful rule of thumb; “Will your decision stand up in a court of public opinion, never mind a legal court?”
• Noncompliance with changing laws can damage your reputation. How compliant are you? When last have your company conducted a reputational audit? A Reputation audit is a systematic way of approach to identifying issues and risks that currently affect your company or will affect it within the next 12 to 36 months. (Like it or not, your company’s policies and actions are shaped and developed in anticipation of, and reaction to, political, economic, legal, social and technological forces).
• It is also a process of casting a look internally and examining processes, procedures, policies and issues that could impact and damage the company’s reputation. It involves an in depth look at the quality of management, financial soundness, use of corporate assets, community and environmental responsibility, quality of products or services, value as a long term investment, innovativeness, and the ability to attract, develop and keep talented people.

Does your company have a dedicated person dealing with the issues of compliance? If it doesn’t, perhaps you need to reconsider. Tiger Brands recently only appointed a Chief Compliance Officer after a number of scandals. Perhaps you need to get some advice from the Compliance Institute of Southern Africa.

Take a look at http://www.compliancesa.com/.The Compliance Institute is the recognised industry body for compliance officers in the South African financial services arena and it endeavours to enable professional compliance and to promote the application of international best practice.

The lesson: Prevention is better than cure.

2008 Dumbest Moments in Business – Laugh & Learn

Fortune’s annual list of 2008’s most laughable moves proves that, even in moments of crisis, stupidity lives on. From former Countrywide CEO’s accidental reply-all e-mail to reports of Steve Jobs’ death (he’s still alive), click through the gallery as Fortune picks the 21 dumbest moments in business for 2008. You won’t know whether to laugh or cry…..

http://www.walletpop.com/specials/fortune/dumbest-moments-in-business-2008

Here is how to turn this list into an organizational learning intervention. (For more on organizational learning, study the works of Peter Senge).

Take each of these examples and turn them into a Lesson for your executives. Share it via e-mail, in the boardroom and face to face.

Organizational development is about enhancing executive leadership through coaching, communication & knowledge sharing.

Personally, I just laughed at Number 5-  Mozilo’s ‘Disgusting’ Reply-All

“Already under attack as the overpaid, over-tanned and over-zealous pioneer of subprime mortgages, former Countrywide CEO Angelo Mozilo doesn’t do himself any favors in May after reading a customer’s e-mailed plea for help with his home loan. Intending to forward the missive to a colleague, Mozilo instead hits “reply all” and sends a response calling the beleaguered homeowner’s request “unbelievable” and “disgusting.” Mozilo’s heartfelt reply makes its way onto the Internet — and [he] finds himself out of a job after Bank of America acquires Countrywide in July”

So now we have had slip of the tongue, now we have slip of the finger!

And, how easily can that happen. Years ago we used to say in corporate communication circles that the easiest way to communicate in any organization, was to label a document top secret, and leave it in the office photocopier. Within an hour, the information would be country and company wide.

Now we have e-mail, Skype, Twitter, sms and other tools to add to the flow…..

No wonder the Chinese have a saying: ”Water will always find a way”

Lesson:

Skeletons in closets will be revealed and unfortunately simple errors and dumb moments will be magnified!

And be published and it will be on the Web, where it will remain and haunt you for a long time to come.

Fast Tracking Media Enquiries

So, you get a request for information from the Media. Do you act as quickly as possible, stall, ignore the request or put it on your list of things to do.

It depends. It depends on your understanding of the rules of engagement and the context in which an organization operates.

Media inquiries, whether crisis-related or routine, are an outstanding opportunity for companies to manage the most important asset they have — their corporate reputation. However media relations need to be seen in a context. That context involves understanding the rules of the game and of engagement.

I always like start with the end purpose in mind (ala Covey).

What is the end purpose in Media Relations?

It is to convey messages to targeted audiences, for example – voters – messages, whose purpose is to advance your organisation’s goals, raise its profile, and uphold its reputation. This means that journalists becomes a means to an end and are conduits or tools. This means that the focus of Media relations is about creating an ongoing dialogue between a news outlet and your spokespeople in an effort to have you or your company discussed in a positive light, in public, through a publication, or broadcast.

In order to this you need to focus on creating relationships with media people. But before you can create a relationship you need to understand the rules of the game. You need to know the rules of the game, because if you do not you may be caught out by not understanding the law, customs, conventions and standard operating procedures relating to the media. It means that you need to know how they operate and approach their job.

That knowledge in turn will shape your attitude towards journalists and editors. For instance if you distrust and dislike journalists, it will generally show and affect your dealings with the media.

I think that the media in general sees themselves as a ‘watchdog’ against big business and institutions. For example many major institutions have systems for communicating information. The entire advertising industry exists for the sole purpose of communicating good news and propaganda about products, services, companies, organisations and even organisations. You seldom see a press advertisement or a TV commercial telling the public what is wrong with a product or what a company failed to do. Why?

In an environment where the public is bombarded with information from advertising, public relations sources, organisation information units, ’spin doctors’ in industry and professional associations, lobbyists and so on, journalists and editors believe that they must provide a balance by consciously and aggressively searching for the bad news. They see themselves as devil advocates, standing guard for right and truth. If you understand that you will understand how they view their jobs, and you can then find ways to make their job easy.

For example – by becoming a trusted resource you put money in the reputation bank for the future.

Too often I see people focusing on how wrong the media is, etc… Perhaps by focusing on the end purpose, there will be better clarity. In one organisation the management team was of the opinion that it was not their job to make it easy for the Media to report on them. Through work shopping and working with them I was able to get them to realise that the principles of negotiation also applies to media relations. That the focus should be on win-win, and not win-lose!

Once they had the knowledge and understanding it was easier to persuade them to see the use of the media as an opportunity and not a bind.