Establishing Reputation: A Holistic Approach To Business

Every year, Reputation Institute looks at how the general public rates 1,000 companies in over 20 industry categories in more than 25 countries, making Global Reputation Pulse the largest study of reputation in the world. Most of the work focuses on how companies perform in their home countries, but an article in Forbes today highlights 28 companies with international merit.

The Top Ten Brands By Reputation.

1. Google (United States)
2. Sony (Japan)
3. The Walt Disney Company (United States)
4. BMW (Germany)
5. Daimler (Germany)
6. Apple (United States)
7. Nokia (Finland)
8. IKEA (Sweden)
9. Volkswagen (Germany)
10. Intel (United States)

Microsoft just missed the top ten. And there are many great companies that round out the full list of the 28 most reputable companies. The study was based on several factors, including products and services, innovation, workplace, governance, citizenship, financial performance, and leadership.

Understanding What Reputation Really Means.

One of the most common mistakes in business is to use two terms — brand and reputation — interchangeably. (The same can be said for brand and identity.) The confusion has become more pronounced in recent years, in part, because some social media experts frequently combine identity, brand, and reputation. So let's dispel some of the mystery.

There isn't much reason to reinvent an answer in this case. Richard Ettenson and Jonathan Knowles clarified brand and reputation well enough in 2008.

They defined brand as a “customer-centric” concept that focuses on what a product, service, or company has promised to for its customers and what that commitment means to them. In short, it's the total net sum of all positive and negative impressions about a company based largely upon the consumer-company relationship.

Reputation, on the other hand, is a “company-centric” concept that focuses on the credibility and respect that an organization has among a broad set of constituencies. This would include everyone: employees, investors, regulators, journalists, local communities, and customers. And, it would include all those factors cited by the Reputation Institute.

If you need an example to help drive the difference home, Walmart is one of the best companies to consider. It frequently scores high as one of the best known brands, but its reputation often serves as its primary detractor. It will always be that way for Walmart until the company holds itself to a higher standard.

What It Takes To Establish A Strong Reputation.

1. Product/Service. The ability to deliver on a brand promise — products and services — is paramount to establishing legitimacy. It's one of the primary reasons Google sucked some of the air out of Yahoo as search stewards. As Yahoo bought companies and rebranded them to the central brand, it also inherited and transposed product and service issues. Sometimes it worked out okay with platforms like Flickr, but it suffered the opposite fate with platforms like MyBlogLog. Google, on the other hand, saw its reputation soar as it transformed its acquisitions into Google culture.

2. Brand & Identity. While reputation, brand, and identity are different, they work in tandem. While the products and services may have differentiation, the ability to communicate that differentiation makes all the difference. Apple is paticularly good at this by demonstrating its minimal design elements and innovation virtually with everything it does, right down to the people we expect to see behind the counters of any Apple retail outlet.

3. Advertising. While anyone can argue the finer points of whether social media has circumvented the traditional principles of advertising, it's still the primary source of message delivery. Advertising, more than any other discipline, communicates the brand promise, establishes the identity, and attracts enough attention to create sales opportunities. Sure, sometimes advertising drives sales, but mostly it focuses on everything else.

4. Public Relations. While some people might take exception to seeing public relations follow advertising, there is some truth to the idea. Public relations (and this includes but is not limited to the art of media relations) works to have other groups — ideally employees (via internal communication), investors, regulators, journalists, local communities, and customers — to adopt and believe in the brand promise. To do it, public relations professionals need to assist in creating an environment of mutual trust.

5. Corporate Citizenship. Great companies do not operate within a void. They generally consider corporate philanthropy part of their culture. Even small localized companies can learn from larger companies in that if the community isn't economically viable, healthy, vibrant, and provides a better quality of life, then it will wither. And with it, so will sales within that community.

When you add it all up and look to some of the best run companies in the world, you might sometimes come away with the feeling that those scoring highest on the reputation charts seems to have it all or, at least, very close to it. In some ways they do. But what's even more important to consider it that any company (or individual) can have it all too. It's a choice.

Communicating To Employees: Obvious But Overlooked

Last Thursday, Joanna Blockey, ABC, communication analyst for Southwest Gas Corporation, help put the crossover impact of external and internal communication into perspective as a guest speaker in my Writing For Public Relations class at the University of Nevada, Las Vegas.

While Southwest Gas Corporation has a well-defined program, she pointed out that many companies do not. Some employers still believe that "providing a paycheck" is the company’s only obligation to employees.

“We communicate to approximately 3,200 employees and retirees at Southwest Gas Corporation,” said Blockey. “It would be a mistake to discount them because they are one of our most important publics. Every day, employees go home with a message about the company.”

And then what happens? They talk to friends and family.

Considering some studies place the average person’s number of friends somewhere between 25 and 35, one internal impression about a company can travel considerable distance. At Southwest Gas Corporation for instance, 3,200 employees and retirees could deliver 96,000 impressions about the company. If these friends pass that impression on to even half of their friends, the impression count suddenly reaches 1.5 million people. It doesn’t end there nor does it consider the number of employees who communicate online.

It didn’t seem like it in January, but Yahoo has learned this lesson the hard way. More than one employee has made their layoff public. This communication, which started with 87 connections on Twitter, has since circled the globe and been picked up by the media. That's just one person.

It's something we alluded to back in Jaunary. Employees don’t like the uncertainty created at Yahoo, a message reinforced by Jerry Yang, chief executive, when he botched the balance between being empathetic for the 1,000 employees to be laid off, which started last week, and being bullish on streamlining the company for non-internal shareholders.

Add up employee impressions alone and you'll discover Yahoo is struggling against the weight of more than 3 million low morale impressions per day, which doesn’t even count that some employees have hundreds or thousands of connections online. Suddenly, this seems to make the recently added "padded" severance packages, for employees and top executives in the event of an acquisition, not all that comforting. In fact, the idea of a Yahoo buyout doesn’t even seem very comforting to Microsoft employees either.

All communication overlaps, inside and out.

Seattle Times reporter Benjamin Romano recently published part of one Microsoft internal communication sent by Kevin Johnson, president of the platform and services division at Microsoft.

"While some overlap is expected in any combination of this size," it said, "we should remember that Microsoft is a growth company that has hired over 20,000 people since 2005, and we would look to place talented employees throughout the company as a whole."

It then when on to shed light on just how important advertising has become to Microsoft executives: "Respect for both the creative and analytical aspects of advertising is core to both companies, along with recognition that advertising is an industry that represents opportunity and growth."

The full communication seemed to have several purposes. In addition to fending off growing concerns that a Yahoo acquisition could lead to Microsoft layoffs, it’s a message to internal Microsoft shareholders (meaning employees). It’s also a message to Yahoo employees (who are also Yahoo shareholders). And, it's carefully written in case it might land someplace else like, um, the Seattle Times.

Communication doesn’t happen in a vacuum.

Watson Wyatt, a global consulting firm, released some key findings to consider about employee communication in its 2007/2008 report: Communication ROI Study
Secrets of Top Performers: How Companies With Highly Effective Employee Communication Differentiate Themselves.

• Effective employee communication is a leading indicator of financial performance.
• Effective employee communication translates into a 15.7 percent increase in the market value of a company.
• Effective employee communication increases employee engagement, which translates into better relationships.

The reasons are simple. There has never been a barrier between internal communication and external communication, except for the delusional beliefs of some executives. Simply put, if you cannot get the employees to buy into the company, then how you can expect customers to buy into its products and services?

People, like some companies, make the same mistakes.

The mistake in attempting to apply spatial barriers onto non-spatial ideas, as if things don't overlap, is not limited to business communication. It's an idea that keeps being transposed onto social media and social networks over and over again.

People attempt to define themselves like companies define themselves. They talk in terms that make the company-individual seem like it is the center of the universe with various social networks hovering around them like little planets, not at all different from the geocentric system debunked by Galileo.

Ergo, social networking is better represented by people orbiting an unknown center. On the Internet, they don't orbit a network but rather pass through networks much like they pass through networks in life. Their orbit takes them through this industry, that industry, work, home, friends, etc. Along the way, they leave little bits of communication.

Sure, I know this may seem terribly philosophical to some, but it’s the truth. Human nature is not all that different than nature, which is why employers need to ask themselves what they are communicating and where that communication will be left as their employees go about their daily lives. And then, where will that communication go from there?

Had Yahoo asked these questions months ago, I bet they would have considered a different communication strategy all together. You think?

Yodeling Less: Yahoo! Cut Backs

Yesterday, Yahoo! announced that what was expected to be hundreds of layoffs will be rounded up to more than 1,000 jobs cut. Unfortunately, the writing has been on the wall for some time as several Yahoo! assets were underperforming.

Yahoo Video fell 80 percent while traffic to rival YouTube grew by nine percent. Metacafe grew by 27 percent. Traffic on Yahoo! asset MyBlogLog, a social network for bloggers, has been declining since a poorly communicated move to Yahoo! IDs. Gmail seems to have an edge over Yahoo!
Mail, which is a bit more clunky than it used to be and is largely unusable by Safari (a small, but still viable percentage of accounts).

Not all the news is sour mind you. Yahoo! and AT&T are expanding their alliance. Yahoo! has cornered a big share of the $548 million market for online ad revenues for sports sites, says Forbes. And most people seem to like Flickr. Even their front page news is pretty good, even if you don’t use the search tool. These are just a few of the reasons I suspect people like the Silicon Valley Insider is calling for any ideas that might “help save” Yahoo!

Part of the challenge isn’t technology as much as it is communication, inside and out. Outside, members of various assets call Yahoo! unresponsive. Inside, layoff rumors have been whispered about for some time. Even The New York Times called said the Tuesday conference call droning and jargon filled.

Since the best communication happens from the inside out, it seems to me that how Yahoo! handles its layoffs will largely dictate how long the road of recovery will be. Large-scale layoffs, especially when no one knows which business areas will be hardest hit, can demoralize employees to the point of paralysis.

It’s especially important for Yahoo! to avoid the concept that there is some magical "clean slate" once layoffs are over. Why? As Umesh Ramakrishnan, vice chairman, Corporate Technology Partners, said: "The biggest challenge Yahoo! has is cultural. It's gotten away from the creative company it used to be—that's the difference between it and Google. Yang needs to bring that culture back and bring innovation to the forefront."

I could not agree more. Yahoo! needs to get away from being too myopic and retain some of the color and creativity that seems to escape every time it purchases a company. Instead of telling employees what to do and online members what will be done, invest more time into discovering why the acquisitions were performing so well to begin with, sans the Yahoo! brand.

By almost every account, Yahoo! is not a sinking ship. But it could be, unless someone inside makes a serious push to bring the passion back from the inside out. And that is always much more difficult to do, when almost one in 10 employees won't be there to help.

Advertising Online: Intel & Everybody

Advertising online is the only medium that has seen substantial gains in spending. According to the Internet Advertising Bureau and PricewaterhouseCoopers, Internet ad revenue totaled almost $10 billion, which represents an increase of nearly 27 percent from the same period a year ago.

This is one of the reasons that Intel is bringing a larger portion of its extremely successful co-op advertising budget to the Internet with 10 to 20 percent of its own budget being spent online. And where the “Intel Inside” campaign goes, so goes Intel marketing partners — at least 35 percent of the ad dollars Intel provides must be devoted to online marketing.

“It was a big change for us,” said Kevin Burkum, vice president for marketing at the egg board in Park Ridge, Ill. told The New York Times. “TV is still very important to us, but it’s not the be-all and end-all as it used to be.”

Maybe that’s because Internet users are conducting about 1.4 million searches every minute — with about 60 percent of those searches occurring on Google. At least that is the word on MSNBC. Citing a study by comScore's qSearch 2.0 service, more than 37 billion searches worldwide went through Google in August. (Side note: they just bought Jaiku.)

Yahoo Inc. was second worldwide with 8.5 billion, followed by Baidu at 3.3 billion, Microsoft Corp. at 2.2 billion, and NHN at 2 billion.

With so many searches, online media buyers might be wondering if buying up keywords and Google click-throughs is the way to go. Sure, but it is not the only way and maybe not even the best way.

One of the more compelling studies that I’ve come across is from the Atlas Institute, which points out what I hope other advertisers and marketers know — 67 percent of all consumers are influenced by more than one ad before they purchase. In other words, they might see an ad here and go somewhere else, forget about it, see it again, conduct a search, and then click on it again.

It’s something to think about if you are a content provider. Your click-through ads have a greater chance of supporting someone else’s shared revenue. But more importantly, marketers might be a bit more careful about where they think click-through purchases are coming from … the prospect likely came from somewhere else.

All of it provides great food for thought and suddenly makes concepts like social media relevant. Thinking about this sure beats writing about the bubble. Besides, Eric Eggertson already did an outstanding cover of the bubble buzz around the second departure of the not-so-anonymous Amanda Chapel. I pretty much closed my case study on them in July after discovering they were causing their own brand damage.

Growing Pains: Really Fast Apps

We all know about fast cars, fast companies, and fast social networks. But how about a fast app?


“We’re about 5 days into the launch of BlogRush and its growth has been nothing short of EXPLOSIVE,” screams an e-mail from BlogRush. “We’ve served over 40 MILLION blog headlines…”


Zooooommm …

But all is not is not well in the land of social media for BlogRush. In some cases, it is losing subscribers because it took less than five days for programmers to game the system. From BlogRush …

• We are moving to a Manual Review; eliminating automation
• We are continuing to add security measures to ban cheaters
• We have added different colored widgets (called flavors)

This is not to say BlogRush will crash; I am still testing it. So far, there seem to be a few errors in their overall model. Much like Yuwie, they are attempting to overlay a multi-level marketing approach, where members who get members get credit (this model begs for cheaters). But more than that, one wonders how much gaming there really is — are people randomly clicking through just to drive up their credits? (I won’t know until I can measure “time on site” from BlogRush clickers to regular readers.)

BlogRush is not the only one experiencing growing pains. The New York Times announced that people would rather search for news than subscribe (really?). And CBS is speeding up its plans toward convergence. Everybody, it seems, is attempting to leap frog to the next level.

• Yahoo! just merged MyBlogLog accounts without any communication other than an opt in.

• Bloglines is beta testing a start page that looks a little like PageFlakes without the news and cool content.

• Digg is adding profiles along with 50 new features. It highlights a mere five promising features on its video; it says it will only take a minute but it really takes about two-and-half.

• BlogCatalog.com is in the process of launching Groups, which is expected to be moved out of beta in just a few days.

• Hey!Nielsen is only three days away from becoming a larger public beta, Nielsen’s effort to stay relevant in a changing world.

From a communication perspective, only Digg and BlogCatalog seem to be spot on with communicating change. They both have different approaches: Digg launched the changes but had an arsenal of communication vehicles waiting in the wings and BlogCalalog has been completely transparent every step of the way.

So if communicaton is any measure as it can be with traditional companies, those who communicate the best will likely thrive. Those who don't ...

Well, hold on tight. Really fast apps mean some people might crash and burn along the way (or maybe get acquired). As they do, you can expect some measures to crash right along with them. More about that on Monday.