2. Uluslararasi İtibar Yonetimi Konferansi-What it takes to Build a World Class Reputation System / Nicolas Georges TRAD

What it takes to Build a World Class Reputation System Nicolas Georges TRAD

Global Executive Partner, Reputation Institute

2.Uluslararası İtibar Yönetimi Konferansı 3-4 Ekim 2013, İstanbul

Copyright 2013. Reputation Institute. All Rights Reserved.

What it takes to Build a World Class Reputation System

Nicolas Georges Trad Global Executive Partner, Reputation Institute

October, 2013

Istanbul


The Purpose of Today…

Is to clarify the Business Case of

Reputation

and

Outline how to work systematically with

Reputation Management

3


New expectations on Corporate Communications Professionals …

4

From… an ex-journalist whose job was to make sure the company (often CEO)

received favorable coverage in the media

To… managing communications with a variety of internal and external stakeholders,

on a global 24-7 basis… Acting in a broad range of stakeholder groups, being a bit

like a minister of foreign affairs for the firm…


On the role of Corporate Reputation Management …

5

“Increasingly CEOs and boards expect their CCOs to be

more than functional experts. Rather they need CCOs who

are multidimensional strategists and advisors, collaborative

leaders who can develop, integrate, and align, as well as

execute both offensive and defensive strategies.”

The Korn/Ferry Institute

“Increasingly CEOs and boards expect their CCOs to be

more than functional experts. Rather they need CCOs who

are multidimensional strategists and advisors, collaborative

leaders who can develop, integrate, and align, as well as

execute both offensive and defensive strategies.”

The Korn/Ferry Institute

CEO View of Communications

Arthur W. Page Society ‘The Authentic Enterprise’

“Chief Communications Executives’ role is more

valuable than ever and likely to increase in value in

the future, BUT they need to be business - savvy

executives who can show business relevance in

what they do “


Reputation Attracts Senior Management Attention

6

52% say it is a

HIGHER priority

than last year

56% Say that reputation is a

HIGH priority to Executive Management and Board of

Directors

and 63% Expect Reputation

Management to be a HIGHER PRIORITY for their company

in the next 2-3 years

Source: Reputation Institute, Reputation Leaders Study, 2013


Changing Marketplace with Two Factors at Play – What Matters the Most?

7

Enterprise

Product

Recommend

Buy

40 % 60 % Work for

Invest in


Business Case for Reputation Management

8

For them to support you they need to trust

you.

Trust you as a company that will deliver on its

promises.

A company who has a good reputation

Your success as a company relies on people supporting

you…

• Buying your products…

• License to operate…

• Investing in you…

• Reporting on your point of view…

• Delivering on our strategy…

Copyright 2013. Reputation Institute. All Rights Reserved. 9

If you deliver on these 7 dimensions you will be in a situation where each stakeholder will be willing to support

you.

How do they see you?

For your stakeholder to trust you, you need to deliver on their expectations… They expect you to be leading within 7 key dimensions:

1. Products / Services 2. Innovation 3. Workplace 4. Governance 5. Citizenship 6. Leadership 7. Financial Performance


Because they impact stakeholder support

10

Products

Customer Service

Investments

Employment

Direct Experiences

Branding

Public Relations

Marketing

Social Responsibility

What You Say

Media

Key Opinion Leaders

Topic Experts

Friends/Family

What Others Say

Perceptions Support Business Results


Reputation Drives Stakeholder Support

11

Would buy the products

Reputation Score

16%

Would recommend the products

Would work for

Would invest in

Would welcome into local community

31% 41% 55% 64%

13% 28% 38% 50% 59%

16% 30% 37% 42% 47%

13% 25% 31% 33% 35%

16% 30 39% 47% 50%

0-39 40-59 60-69 70-79 80+

Above 80 Excellent/Top Tier

70-79 Strong/Robust

60-69 Average/Moderate

40-59 Weak/Vulnerable

Below 40 Poor/Bottom Tier

Products

Customer Service

Investments

Employment

Direct Experiences

Branding

Public Relations

Marketing

SocialResponsibility

What You Say

Media

Key Opinion Leaders

Topic Experts

Friends/Family

What Others Say



Support Across your Value Chain

12

Partners/

Suppliers

Employees &

Target Employees Media &

Social Media

Customers &

Prospects

Support

Invest/

Recommend

Investors

Government,

Regulators,

Opinion Leaders

Products

Customer Service

Investments

Employment

Direct Experiences

Branding

Public Relations

Marketing


What You Say

Media

Key Opinion Leaders

Topic Experts

Friends/Family

What Others Say



Good Reputations = Better Financial Results

13

37% Better financial performance

(RoE; RoA)

27% Better market performance (P/E; Market/Book; EV/EBITDA)

Source: Reputation Institute, 2011; quantitative analysis based on 2011 RepTrak™ Pulse, 2010 Financial Data, Large Cap U.S. Companies, N=274

High Reputation

Low Reputation

S&P 500

0

20

40

60

80

100

120

140

160

180

January-06 July-06 January-07 July-07 January-08 July-08 January-09 July-09 January-10 July-10 January-11 July-11

Top 10 Bottom 10 S&P

High Reputation

Low Reputation

S&P 500

Companies with High

reputation outperform

Low reputation firms AND

S&P 500

Products

Customer Service

Investments

Employment

Direct Experiences

Branding

Public Relations

Marketing


What You Say

Media

Key Opinion Leaders

Topic Experts

Friends/Family

What Others Say



The Biggest Reputation Leadership Challenges

14

# 1 We don’t have a structured process for implementing reputation management

into our business planning

# 2 We are not leveraging the knowledge we have to be relevant to each

stakeholder

# 3 Internal silos prevent cross-functional

collaboration

Business planning around reputation is the biggest challenge faced by companies


Key Elements

World Class Reputation System?

15


Using Corporate Reputation to Drive Business Value

16

Business Rationale

Intelligence & Strategy

Management & Accountability

Integration

The 4 core elements of a world-class reputation management system



Current State of Reputation Management

18

Source: 2013 Reputation Institute, Reputation Leader Study (Based on responses from 313 leaders at 284 of the world’s largest and most influential companies)


Case: Using Reputation to Drive Value

19

Comparison with financial metrics(Telefonica)

● Reputation and other Customer Metrics comparedwith a range of Financial Indicators

● Reputation of Telefonica + Primary Competitor was found to be responsible for 17% of ARPU, 29% of churn and 11% of Financial Metrics Average globally

5%

4%


Case: Use Reputation to Leverage Insight

20

1. Assessment of efficiency of activities in addressing key stakeholder issues

2. Evaluation of the ROI from activities and contribution in creating reputation/support

3. Input for change in programs and overall story to tell



21

vs.

Likelihood

Imp

ort

an

ce

to S

takeh

old

er

Likelihood

Rep

uta

tio

n I

mp

act 1

23

45678

910

11

12

Risk Prioritization

• Risks are events with a negative

reputational impact which prevent

value creation or erode existing value.

• By systematically identifying,

assessing reputation risks, you stay in

control, pre-empt risks and ensure a

coordinated response to potentially

emerging risks. You protect the value

of your company.



22

“…everything we do affects our reputation, and our reputation affects everything we do – this is why we need to manage and protect it.”

- Dennis Jönsson, President and CEO, Tetra Pak Group

Customers

Competitors

Retailers

Governments & Regulators

Media

General

public

NGOs / special interest groups

Consumers

Opinion

leaders

Brand consultants


Case: Use Reputation to Integrate Corporate

23


Know your Stakeholders Expectations - to Act in Ignorance is to take a Huge Risk

24

“We missed the issue of obesity and the value of

healthy and nutritional food. We were behind, while Nestlé was riding that wave. Not being in tune with society, with the benefit of hindsight,

can cost you dearly.”

- Paul Polman, CEO of Unilever

Source: McKinsey & Company: March 2013


Bring your stakeholders into the room when you make decisions

25

“Stakeholder interests, risks, and opportunities

are deeply integrated in every business decision

that we take.

Every single project or investment decision

comes with reflections, risk maps, and mitigation

actions around the particular topic that we’re

discussing.”

- Helge Lund, CEO Statoil


Thank You

26

Australia • Belgium • Bolivia • Brazil • Canada • Chile • China • Colombia • Denmark • Finland•

France • Germany • Greece • India • Ireland • Italy • Japan • Malaysia • Netherlands • Norway •

Peru • Portugal • Russia • South Africa • Spain

Sweden • Switzerland • Turkey • Ukraine • United Arab Emirates • United Kingdom • United States

About Reputation Institute Reputation Institute is the world’s leading

reputation consulting firm. As a pioneer in the field

of brand and reputation management, Reputation

Institute enables companies to make decision that

protects their reputation capital and improve their

competitive advantage

With a presence in 30 countries, Reputation

Institute is dedicated to advancing knowledge

about reputation and sharing best practices and

current research through client engagement,

memberships, seminars, conferences, and

publications such as Corporate Reputation Review

and Reputation Intelligence.

Visit ReputationInstitute.com to learn how you

can start making reputation based decisions

Questions or Comments Please post your questions or

comments and continue the discussion

in our LinkedIn Group Reputation

Institute

To find your local office please visit our

website

www.reputationinstitute.com/contact/