Aligning internal & external communications for reputational and competitive advantage

Reputation Management Conference Sydney, 31 August 2011 Clayton Ford Senior Manager, Centre for Corporate Public Affairs

What is a good reputation worth?

§ Command premium prices for products

§ Pay lower prices for purchases

§ Entice top recruits to apply for positions

§ Experience greater loyalty from consumers and employees

§ Have more stable revenues

§ Face fewer risks of crisis

§ Given greater latitude to act by their constituents

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Source: Fombrun, 2008

The value of good reputation

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“Companies with good corporate reputations do better over time. Their reputational capital can be 55% to 85%

of a corporation’s market value.”

Source: Fombrun, 2006

Reputation or legitimacy gap

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Organisational performance /

activities / practices (perceived or real)

Stakeholder / community

expectations

The size (and impact) of the legitimacy gap between perceived organisational values, activities and performance and stakeholder and community expectations is referred to frequently in Australia and Europe as the ‘reputation gap’

Legitimacy Gap

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Comcast asleep on the job…

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Target make themselves a target…

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Domino’s falling over…

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Habitat making a hash of it…

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United tuning out…

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Common factor?

Internal / employee behaviour

§ Not triggered by external forces (events, NGOs etc.)

§ Companies’ own employees shooting them in the foot

§ Not solved simply by a social media guide or code of conduct

§ Gaps between internal and external perceptions of the brand

Attributes of a good reputation

Trustworthy

Corporate Reputation

Responsible

Credible Reliable

Source: Fombrun, 2008

Seven dimensions of corporate reputation

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Employees an essential element

Employees ARE your brand

•  One of the most trusted information sources about an organization

•  Main contact point between internal & external environments

•  Communicate real company values through their behaviour

•  Boundaries between employees & consumers is blurring

Informal corporate identity

§ Corporation identity rarely emerges solely through planned communications

§ Corporate identity is communicated informally & unconsciously through daily routines & behaviours -  Unplanned behaviour as compelling in communicating identity

§ As stakeholders become more sophisticated, less likely to rely on planned communications as a means of interpreting a firm’s business activities -  A conscious choice to judge unconscious behaviours -  Amplified via social media

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Source: Otubnajo, Amujo, Cornelius (2010)

Putting the corporate into corporate branding

§ Globalisation driving companies to differentiate by positioning the corporation, not just products

§ Exposes entire organisation to scrutiny of everyday behaviours -  Transparency amplified via social media

§ Whole organisation focus requires whole organisation response -  Not sole preserve of marketing or communications departments -  C-suite, HR, Finance, IT, Sales all involved

§ Three key elements -  Vision, Culture, Image

§ Most successful corporate brand connects strategic vision & (real) organisational culture

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Source: Hatch & Schulz ( 2001)

The six Cs of corporate marketing

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CHARACTER (Corporate identity)

“What we indubitably are”

COMMUNICATION (Corporate communication)

“What we say we are”

CONSTITUENCIES (Marketing & stakeholder

management) “Whom we seek to serve”

CULTURE (Organisational identity) “What we feel we are”

CONCEPTUALISATIONS (Corporate reputation)

“What we are seen to be”

COVENANT (Corporate brand management)

“What is promised and expected” Source: Balmer (2006)

Corporate marketing as a philosophy

“…we regard corporate marketing as more of a philosophy rather than a function.

…the mix of elements should be seen as informing an organisational-wide philosophy rather than as

encompassing a mix of elements to be orchestrated by a department of corporate marketing.

In essence, the philosophy of corporate-level marketing should permeate how people in the organisation think and behave on its behalf.”

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Source: Balmer & Greyser (2006)

Coordinating corporate communications

“Projecting a firm’s image is not the exclusive responsibility of the public relations or advertising practitioners…everyone who comes into contact, directly or indirectly, with any of a firm’s publics

contribute pieces to a mosaic.

Whether or not the pieces form a comprehensible total picture depends upon the degree to which the firm’s corporate communications are coordinated.”

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Source: Bernstein, 1994

Case study – Southwest Airlines

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Mission & Values

Desired brand image

Sources / modes of

msgs

INTERNAL Formal

- HR / PR Informal - Culture - Leaders

EXTERNAL

Formal - Advertising

Informal - Feedback

Employee’s Psyche

Knowledge of desired

brand image

Covenant / contract

Employee brand image

Outcomes

Brand position

Turnover

Satisfation

Loyalty

Reputation

Source: Miles & Mangold, 2005

Feedback

Case study – Singapore Airlines § Core promise is in-flight experience, embodied by ‘Singapore Girl’

§ Aligned internal & external branding achieved via: -  Internal communication

-  Led by ‘People Networks’ Department -  Based on mission & key corporate values -  Print, online, mass & tailored -  High number of face-to-face channels, with senior leaders

-  Infusing corporate values -  Relentless focus, -  4 different touchpoints – induction, training, corporate events, communication channels -  Evaluation & performance management

-  Cabin Crew the crucial touchpoint -  Very selective recruitment -  4 months intensive training, then ongoing -  Role play other roles (eg pilots, ground staff)

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6 steps to strategically aligned behaviour

1.  Provide clarity about the behaviour expected

2.  Integrated focused change process, starting at top management levels, showing commitment to clear vision

3.  Consistency is key across management role modeling behaviour and corporate communication (internal & external)

4.  Execution takes employees’ needs seriously, such as capabilities and flexibility to deliver, evaluation, feedback

5.  Measure and track alignment or gaps systematically

6.  Combine internal motivation programs with external campaigns using same corporate story – stimulate internal audiences to provide proof points in daily behaviour

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Source: Riel ( 2008)

Living the brand

“…up to 40% of the marketing investment is said to be lost when employees do not deliver on the

organisation’s promises to clients.

…when employees understand and accept that the values are genuine, they align their attitudes and behaviours to the brand values, which results in

greater satisfaction for both customer preference and loyalty.”

- Gapp & Merrilees (2006)

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Competitive benefit

“When brand expectations and culture clash, the effects can devastate a business.

When brand and culture match, the effects can devastate the competition.”

- John R. Childress

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Do You Have Questions?