Last year a blogger, the Time Ninja blog ran a post – 5 Reasons To Say No To The Fire Drill that I felt was irresponsible and ignored the emergency aspect and saving of lives.
The article asked the question – ‘what would happen if you chose to say no to the fire drill? Would the earth stop spinning? Would you lose your job?’
I responded as follows:
Whilst this is a good article, it completely misses the point of a fire drill.
The objective of such a drill is to save lives.
Not only is it a legal safety issue, it is crucial for any organization that wants to protect its reputation. I mean who wants to work or do business with an organization that killed employees and hopefully not, customers as well.
The whole idea with an emergency is to be prepared and to deal with the crisis situation in an orderly and organized manner.
This brings us to a problem situation. If you are an Emergency Manager, do you run an simulation unannounced or a simulation that has been communicated before the time. The one is real, the other contrived.
IMHO it is the best to do the second. People will comply, once they fully understand the reasons WHY, not just the How. I have taken managers with a dubious outlook to the burn unit at a local hospital. Once they visited there, their whole life experience changed.
Equip people to act positively. Build on rocks, not sand.
Ultimately, this goes deeper. To be an Admired Company today, to be a Best employer, deserves attention to detail others ignore. Ultimately it is about caring. A Company that does not prepare for all eventualities will communicate a message that it stakeholders are not important, and as research shows these days, people want to do business with companies they can trust – even from a safety perspective.
Just read an interesting piece in the Sunday Independent that the popularity of the Tour de France among French people has fallen dramatically, according to a survey. The survey claims that only 44% of French people said they like the Tour, which is down eight percentage pints from 2007 and five points from 2008.
It says that public has grown increasingly disillusioned with the event since the slew of doping –related scandals of recent years. After the Floyd Landis incident some even started calling it the Tour de Farce.
Now this might just be a survey, but in the light of other scandals such as Tiger Woods and the French team not performing according to expectations at the World Cup Soccer tournament in South Africa, this results makes sense.
Parents want sportspeople to be role models for their children, and even in the quest of winning at all costs, sportspeople and especially cyclists have a huge role of responsibility to show that they are balanced individuals. Not, just obsessed with winning at all costs.
In other words, they have to factor the aspect of reputation into their success drive. Simply you can win , and lose your reputation. And, then you are nothing, because the blemish will obscure your efforts and hard work.
Cycling is also an example of how long it can take to weed out malpractices. It also illustrates the importance of the role of governance, ethics and compliance in ensuring that reputation risk does not emerge.
Next to soccer, cycling is in fact the second most popular sport in Europe. Hopefully, there will be few doping scandals in this year’s tour and public sentiment will rise again in this wonderful sport.
The 90th edition of Powerlines is now available for download. This newsletter aims to provide you with timely, accurate and useful information to help you build, sustain and protect your organisation’s reputation.
Powerlines currently serves more than 8500 international and local readers! It is an opt-in newsletter list and comes at one cost – the time to read and share it! Please feel free to forward it to someone that may benefit from the content.
In this Issue
- Quotes & Thoughts – Alltop
- What Type of Reputation Management Consultant are you?
- How to Write and Implement a Media Policy
- The Implications of the King Code 3 on Stakeholder Management
- What is the Definition of Effective Risk Management?
- Manage your Stakeholders…Manage your Reputation Event invitation
- The Meanings of Words are in People’s Heads and not in the Words they use
- Develop a Breakthrough Marketing Action Plan for 2010
- I want to speak at your next event!
- Introducing REPUCOMM – The Reputation Management Training Specialists
Access Powerlines by clicking the following link
Last week I sent out my Powerlines newsletter Number 90 – a newsletter for Reputation Managers and those involved in stakeholder management.
Like any newsletter it always gets its own fair amount of subscriptions and unsubscriptions. However what got me this time was an e-mail from someone that stated the following:’’Your newsletter would be inappropriate for us as our business is not affected by your content”.
Now I don’t mind unsubscriptions and would rather have a targeted list of readers, but if ever I needed to take an exception over a statement it was that one.
The statement that any business would not be affected by the content is wrong. Knowledge, awareness and understanding of stakeholders and the reputation management process can only be beneficial for any organisation, no matter its size or stature.
No organization can state that they have no stakeholders. In fact it is useful to revisit the definition. Stakeholders are anyone, group or individual that can affect or is affected by an organisation’s behaviour, actions and performance. There is thus a fine interplay of factors to manage if an organisation wants an excellent reputation.
An organisation derives its reputation from the way it is perceived by its stakeholders. They will evaluate your actions, performance and behavior, and will in turn act reciprocally by either buying your products, recommending you, using your services or acting towards you in a favourable manner.
It is these actions that are important. You want stakeholders to say good things about you and your organisation, you want them to work for you and be loyal if they are an internal stakeholder, you want to be able to source funding when you need it because you have a good image and reputation in the eyes and minds of the shareholders and financial institutions.
In the world of the interconnected economy, the reputation of an organisation has become its biggest asset and risk. Research clearly shows that these days that reputation is a function of the communication with stakeholders, the understanding and perceptions they have about your business and the levels of relationships that have been fostered.
It makes the management of the stakeholder interface a strategic and vital one for any organisation. In fact, it has become so important that the new King Code 3 of Corporate Governance makes specific reference to it in Section 8. Although the Code is not enforceable it sets forth standards of good practice and provides guidance that will shape dealings with stakeholders in years to come.
Section 8: The Governing of Stakeholder Relationships spells out certain practices, as follows and I quote:
- Section 8.2. 1 Management should develop a strategy and formulate policies for the management of relationships with each stakeholder grouping. This implies that an organisation has a formalised stakeholder management model or system in place and that due thought has been given to dealing with each relevant stakeholder. A Good example of this is the difference between working with the Government stakeholder versus the Media Stakeholder. Deadlines for these two stakeholders differ. The Media stakeholder is always on deadline, whilst in Government, decisions go through a consultative process that includes strict use of protocol. Thus you cannot manage these different stakeholders appropriately unless you understand the different rules and nuances of the stakeholder game. It is these types of issues that I also address in my Stakeholder Reputation courses.
- Section 8..2.2. The board should consider whether it is appropriate to publish its stakeholder policies. Some companies like BHP Billiton have this information in their HSE reports and on their websites. They thus demonstrate their commitment to positive relationships based on trust, openness and transparency.
- Section 8.2.3. The board should oversee the establishment of mechanisms and processes that support stakeholders in constructive engagement with the company. There are many ways to engage. These methods are influenced by timing, decisionmaking resources and other issues. Again, due thought needs to go into deciding which engagement tools are appropriate and under what circumstances. The use of Facebook and other social media technologies are not by the way just a communication or an IT bandwidth or security issue, but falls right into the domain of engagement.
- Section 8.2.4. The board should encourage shareholders to attend AGM’s and Section 8.2.5. The board should consider not only formal, but also informal, processes for interaction with the company’s stakeholders are dealt with above.
- 8.2.6. The board should disclose in its integrated report the nature of the company’s dealings with stakeholders and the outcomes of these dealings.
All these specifications implies that a company will need a formalised stakeholder management system*** in place, in order to comply and adhere to these recommended practices. The Code also goes on to say that the board should take account of the legitimate interests and expectations of its stakeholders in its decision-making in the best interests of the company.
This means having a different set of criteria when making decisions – see my blog post called Which Decision-making Model are you using?.
However adhering to these recommended practices will be far from easy. Traditional company models rely on functional layering, whilst the skills and approach needed to manage a Stakeholder system will necessitate a systemic model, one in which a person will be required to work across departmental boundaries.
Company processes and practices will also offer their own set of restrictions. In my blog posting of 26 March 2008 I asked the question: ‘‘How much are you spending on Stakeholder Relations?.
I had few responses, and those who did, could not tell me how much they were spending on each stakeholder group, nor what the ROI was. This will be a problem in the future, because what we try and do in stakeholder reputation work is to influence perceptions and ultimately affect stakeholder behaviour. Spending money on these relationships are not wasted. Spending money on learning how to maximise these relationships will not be a not a waste.
Planning and managing the Stakeholder function will need to be done systematically and with great strategic insight.
So to conclude to the reader who unsubscribed. In my newsletter I try and raise awareness of these type of issues and topics. Whether you like it or not you will affect your stakeholders and they will in turn affect your reputation.
*** Here is a quick test for you. Can your management team answer the following strategic questions:
- Who are our stakeholders?
- What are our stakeholders’ stakes?
- What opportunities and challenges do stakeholders present?
- What economic, legal, ethical, and social responsibilities does our organisation have towards our various stakeholders?
- What strategies or actions should we take to best manage stakeholder challenges and opportunities?
- Do you have a system for managing relationships with stakeholders?
- How do you measure results? What metrics do you use to assess and gauge stakeholder relationships?
- In a crisis how quickly can you communicate with your relevant stakeholders?
- Do you know the various methods to engage with stakeholders and when not to use it?
- Can you state how much you are spending on each stakeholder group and what your ROI is?
- Have you developed a set of rules and practices on how best to manage the process of building stakeholder reputation with each stakeholder group?
If you need more help to understand this, take a look at this site: http://stakeholderreputation.invite43.com
Before you can market a product or service, you need to take the teapot lid off and look at what it is that is withholding you from marketing and growing business success. That will ensure that the foundations are strong and the marketing and eventual reputation will grow in leaps and bounds.
The problem is that many organisations participate in various surveys that tackle the multifaceted issue of reputation. They then get results that do not always give them the full picture of what is not working.
About a year ago I saw the results of a survey conducted at a client that indicated that their creativity and innovation presence was lagging. Lagging in what?
To get to the real reasons, a lot more detective work is necessary. The questions that a skilled management consultant would ask is different to that asked by a traditional survey. A consultant would probe and probe until he or she identified the root cause. Only then, can measures be implemented to enhance creativity and innovation in the organisation.
So, what is stifling innovation in the organization? Is it structural, process issues, the corporate culture or competencies of the people?
Let’s just quickly define what a competency is. A Competency is having the required knowledge, skill and attitude to do a certain task at a certain standard level.
In my experience, creativity can start at that level. Most people upon asked to do an exercise in which they have to list the names of five people, dead or alive, they believe to be very creative, would seldom put their own names on that list.
In few organisations, a staff suggestion and idea scheme operates at an optimum level (maybe I will blog more on that ).
Anyway, here is a formula that you can apply to changing your organisation’s reputation.
Change == D+V+S+C
For change to happen a business has to:
- Be dissatisfied with its present state (Are you happy where you are on the World’s Most Admired Company Survey? The Best Employer Survey, etc?)
- Have a clear Vision of where it wants to go (Do you know what makes your company unique? Do you understand what drives reputation in your industry?)
- Take the necessary steps to get there (Planning)
- Create enough energy (or tension) to overpower the COST required (in terms of money, time and energy) to make the change happen.
Simple formula, but as one speaker once said: ‘’Business is just about two things, Buying and selling and a millions things in between!’’
Depends on how much you value your Reputation. I know Warren Buffet does.
The beauty about stories is that they are like metaphors. I once saw a study that said that metaphors appeal to both the left and the right side of the brain.
I am not a Buddhist, yet am extremely fond of Zen Koans.
The way I try and do it is to research before every group facilitation stories, anecdotes, metaphors and humor that I can have in the "wings" based on the diversity of the group.
That way I may have options available to "unlock the potential" of someone.
Just like a builder uses solid construction practices, we need to design or build our training based on proven ways how the brain works. We know a lot about adult learning principles and how the brain works. The "best practice" of using metaphors and analogies takes advantage of at least two key facts:
- The brain works by building connections and associations.
- The brain remembers more easily things that are novel or unusual.
The right analogy or metaphor can be quite novel, build connections to the material you are teaching and often create the "aha" experience the learners need to effectively learn the new information.
Let me use an example. If I am working with a group of executives about the organisation’s reputation, I will tell them that they have to be careful how they communicate, how they behave as it will impact on the way stakeholders perceive them. That is a linear and left brain approach.
But for some this story will have more impact.
SPOKEN WORDS CANNOT BE RETRIEVED – The Story of the Feathers
A farmer slandered his neighbor. Realizing his mistake, he went to the preacher to ask for forgiveness. The preacher told him to take a bag of feathers and drop them in the centre of town. The farmer did as he was told . Then the preacher asked him to go and collect the feathers and put them back in the bag. The farmer tried but couldn’t as the feathers had all blown away. When he returned with the empty bag, the preacher said, "The same thing is true about your words. You dropped them rather easily but you cannot retrieve them, so be very careful in choosing your words."
Which one has more impact for you?
It depends on your style of learning and brain dominance preference.
It can destroy people’s trust in you, it can destroy relationships and ultimately shut doors in your face.
Yet, many people believe that time is the healer, and that with time knowledge of the incident or scandal will fade. Interestingly, organizational research on the topic varies. Some say it can take 3.5 years to restore a damaged reputation whilst others have found it to be more than 10 years.
In some cases people never forget nor forgive.
Hence the saying: ‘’Reputation is like a fragile vase, once broken, not easily repaired’’. Here is a story that lends more weight to this argument.
There once was a little girl who had a bad temper. Her father gave her a bag of nails and told her that every time she lost his temper, she must hammer a nail into the backyard fence.
The first day, the girl drove 37 nails into the fence. Over the next few weeks, as she learned to control her anger, the number of nails hammered daily gradually dwindled down. She discovered it was easier to hold her temper than to drive those nails into the fence….
Eventually, the day came when the girl didn’t lose her temper at all, she told her father about it and die father suggested that she now pull out one nail for each day that she was able to hold her temper.
The days passed. The young girl was able to tell her father that all the nails were gone.
The father took his daughter by the hand and led her to the fence. He said, "You have done well my little one, but look at the holes in the fence. The fence will never be the same. When you say things in anger, they leave a scar just like these. Remember, you can put a knife in a man and draw it out. It won’t matter how many times you say ‘I’m sorry,’ those wounds will still remain."
You can cover up cracks, but the scars remain.
In athletes scar tissue can cause lack of performance and further injuries. In companies it is vital to fix that which caused the scars in the first place and to make the processes better than ever before. This takes time, investment, effort and hopefully fading memories.
However it is better you do not damage your reputation the first time around! It is better that you do not drive nails into the fence!
According to Wikipedia, “Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.”
There are best practices for identifying and mitigating reputation risk in different types of companies as well as best practices for managing reputation as an asset. Please note that not every environment or every company is the same. Your unique environment may require different configurations in order to provide the best protection results.
If you have questions about your environment and would like some guidance on mitigating reputation risk, contact deonbin (at) icon.co.za
Like all of the intangible assets whose value has escalated in recent years (other examples are talent, knowledge, know- how and intellectual property), reputation has often been overlooked by organisations because it is so difficult to comprehend.
It is only when a reputation incident severely damages the credibility of an organisation or one of its brands, or its standing in the eyes of its stakeholders, that the potentially catastrophic consequences of not managing the crisis properly become apparent. Studies of organisations that have handled crises affecting their reputation badly have identified long term and irreparable damage to share price, market share and brand value.
The recent eye-gouging incident by the Springbok flanker, Schalk Burger is a classical example of this. Not only was he suspended for 8 weeks, but the incident itself has raised the ire of the rugby loving public and the matter was compounded by the inept handling of the media conference by the coach, Peter de Villiers about the matter.
Many organisations make the mistake of assuming that all that is needed is media training and crisis planning. However, a reputation crisis exposes to public and media scrutiny not only the organisation’s competence at crisis handling, but the values, standards and shortcomings that existed beforehand.
In this instance, The Schalk Burger affair was compounded when he only formally apologized about a week after the incident.
While crisis communications largely remains a case-by-case practice, the author Laurence Barton said there are two essential immediate steps both individuals and companies should always use to control the media storm during a scandal.
1. Come clean. Issue a statement admitting to wrongdoing and accepting full responsibility (assuming the allegations are true, of course).
2. Apologize. Sincere acts of contrition can go a long way in getting back into the good graces of the public and media.
Every crisis must be handled differently, but in every crisis there should be a party accepting blame, and that party should apologize as soon as possible for being the cause of that blame. The end result – The Company’s integrity and reputation must be maintained at all cost.
Who said so: Warren Buffett and David Glass, CEO of Wall- Mart!
The problem is that apologizing does not come easily. The starting point of any reputation recovery process is a believable apology.
According to Wharton marketing professor Lisa Bolton, three key components ensure that an apology will work:
- The CEO must deliver the message,
- A solution to a problem must be outlined (Like a product recall process) and
- Some remuneration should be in place. The initial response is the most important," she says. "The general advice is to admit mistakes and try not to be defensive. Get out in front of the story. Get your admission and mitigation out there as well, and consider financial compensation. Also, customize your response in relation to the magnitude of the failure."
It is my belief that apology also goes hand in hand with the strategic communication process in any organization. For instance , if a company have not debated PRIOR to a crisis whether they are going to be open and transparent, do you think an apology will be forthcoming? (See the article Use this tool to improve transparency in your organisation in Powerlines Number 39 dated 20 November 2002).
The reputation best practice strategy should, therefore, have two simple objectives – to prevent the causes that could damage your reputation, and to minimise the impact if, despite your best endeavours, a reputation crisis should occur.
Here is a partial list of some of the best practices to consider:
- Develop ways to understand the nature of your reputation
- Design & develop a reputation risk management strategy that can act as a roadmap for strengthening risk management in particularly vulnerable areas
- Work together with PR, Risk and Compliance departments to close gaps
- Develop standards and controls for the action that the strategy places most importance on
- Learn how to proactively manage elements of reputations
- Provide reputation management training, education and communication to obtain the vital support and commitment of your employees and managers
- Design analysis and monitoring mechanisms to provide early warning of problems or crises
- Develop a process of continuous crisis assessment
- Conduct regular crisis planning and testing
- Ensure regular reporting and monitoring of reputation risk, including incident analysis, issue management, environmental forecasting and online reputation monitoring.
Some organisations have attempted part of this best practices process themselves, particularly the first few stages. In my experience, they are severely disadvantaged by being too close to the issues, or by risking avoiding taboo or politically difficult areas, or by not challenging assumptions vigorously or objectively enough.
If you would like to learn more about best practices in building, managing and protecting corporate reputation, why not attend one of our learning interventions?
What is the purpose of Corporate Governance? Compliance? Enterprise Wide Risk Management? Corporate Responsibility? Positive Company Actions and Behaviours?
In the book, the 7 Habits of Highly Successful people http://bit.ly/2gOas, Stephen Covey writes that a person should always start with the end purpose in mind.
So what is the end purpose of the questions that I just asked?
The end purpose is to be well regarded in the mind of the stakeholder, so that we can do business and achieve our goals.
If an Investor regards us in a positive manner, they will invest in our company.
If employees regard as a preferred employer, they will want to work for us. And in a business to business relationship, people will want to do business with you.
Ralph Larsen CEO Johnson & Johnson said: “Reputations reflect behavior you exhibit day in and day out through a hundred small things. The way you manage your reputation is by always thinking and trying to do the right thing every day”
So next time that you engage in your normal responsibilities as an employee, remember that the same principles applies to you. No matter the type or size of the task, always start it with the end purpose in mind.
The next time that you engage with a stakeholder, remember the end purpose.