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INSIDE STORY Research and Knowledge Management | Level 5, 2 Barrack Street, Sydney NSW 2000Tel: 02 9299 9979 | Fax: 02 9299 7991 | Email: [email protected] | Web: www.insidestory.com.au | ACN: 00 364 0953 | ABN: 46 795 383
901
INSIDE STORY opens the vaults on corporate reputation
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Introducing INSIDE STORY
25 year
s old!
CELEBRATING A BIG BIRTHDAY MEASURED CORPORATE REPUTATIONS SINCE 1999
REPUTATION CLIENTS SPAN MANY COMPANIES AND INDUSTRIES
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Unions
Employees
Students &
graduates
Associations
Academics
Members
Politicians
Advisors
Opposition
Bureaucrats
Regulators
News journalist
s
Business journalist
s
Wires
Television
Internet
Bloggers
Twitterers
Fans
NGOs
Community groups
Consumer advocates
SMEs
Large business
esEnterprise
s
Regional communitie
sAustralian
sInternational
visitors
Who influences your reputation?
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Journalists – every 6 months since 1999
News journali
sts
Business
journalists
Wires
Television
Internet
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How we measure reputation
Negative equity Positive equityNeutral:
neither weaknor strong
-5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5
© Copyright INSIDE STORY 2013 INSIDE REPUTATION INDEX
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How the environment has changed
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
In the beginning – companies perceived positively. Regularly saw reputation ratings up at 4.5/5
2000/2001 – Dot com bubble
burst2001 – HIH – Australia’s
largest ever corporate collapse
All reputations re-evaluated – drop. The best
sit at around 3/5
2008-2010 – GFC – Australian
business largely unscathed in a global sense.
However a degree of
nervousness.
The ‘new normal’ - businesses getting to
grips with high Australian dollar, ‘two
speed economy’, uncertain political environment, new
carbon tax, increase in superannuation –
increased uncertainty
Relative stabilityIncrease in interest in CSR activities, innovation
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Case study: QBE
Frank O’Halloran
14 years at the helm of QBE
Reputation for being a great leader
Made hard nosed decisions which paid off
Ability to attract top executives
Did not like talking to the media – unless it suited him
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Feb ‘09 Feb ‘100.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
QBE’s evolving reputation
Feb ‘04 Feb ‘05 Feb ‘06 Feb ‘07 Feb ‘08
1.5
Global financial crisis – period of
uncertainty
Feb ‘11 Feb ‘12 Feb ‘13
Recovering from losses in
September 11 attacks in USA
plus unsuccessful life
insurance expansion
1.3
1.9
2.3 2.
1
QBE goes shopping – buys
up cheaper competitors
3.1
3.8
QBE hit by multiple disasters – Japan & Christchurch
earthquakes, floods in Thailand, tornadoes in USA. Negative
impact on profitability – 45% drop in share price
2.0
Frank steps down as CEO, John Neal
appointed
1.9
2.1
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0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Feb ‘11 Feb ‘12 Feb ‘13
$-
$5.00
$10.00
$15.00
$20.00
$25.00
QBE’s share price
2.0
1.9
2.1
Feb ‘04 Feb ‘05 Feb ‘06 Feb ‘07 Feb ‘08 Feb ‘09 Feb ‘10
1.51.
3
1.9
2.3 2.
1
3.1
3.8
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Impact on trust and confidence
Feb ‘04 Feb ‘05 Feb ‘06 Feb ‘07 Feb ‘09 Feb ‘10 Feb ‘11 Feb ‘12 Feb ‘13Feb ‘08
0.6
1.5
0.3
1.7 1.
5
2.6
1.4
1.4
0.4
1.3
Trust Confidence
1.3
1.9
2.3 2.
1
1.5
3.1
3.8
Overall reputati
on
2.0 1.
9
2.1
Global financial crisis – period of
uncertainty
1.8
1.9
1.8
2.3 2.
0
2.7
4.0
1.4
1.4
2.3
QBE, which was regarded as the best managed insurer in this sector and one of the better ones
on the globe, wasn't actually quite as well managed as we thought it was.” Senior business journalist, May 2013
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What is a ‘good’ reputation then?
-5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5
© Copyright INSIDE STORY 2013 INSIDE REPUTATION INDEX
1.3
3.8
1.8 2.8
The ‘golden zone’
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Corporate reputation – what negatively impacts it?
Failing to meet forecastsEspecially without warning
Failing to grow Especially when your competitors are
Making unexpected major changesAnd failing to communicate reasons why
CrisisService outage, plant closures, major layoffs, strikes, off-shoring
DisharmonyBetween the board and management, institutional shareholders and management, company and government, social and shareholder expectations
Scandal Customer complaints, CEO or board indiscretions
‘Unethical’ practices Price gouging, significant price increases without explanation
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The journalist’s mental model – how they respond to your messages
Values Experiences Perceptions
Integrity, esteemRational economist
vs. humanist
Past and present, direct and indirect,
professional and personal
Things they hear, read and observe
Knowledge and feelings
‘You’ (the organisation)Actions, people, culture, competitiveness, corporate responsibility,
strategies, relationships
Message
How you project externally eg via messages, advertising, products and your relationships with the media.
How well your message is communicated and cuts throughJournalists will overlay your message with their previous experiences, perceptions and values.
This is combined with what they learn from others eg financial analysts, other sources
SupportPositive stories
RejectNegative stories
Wait & see
Neutral stories
Ignore
Overall evaluation
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Corporate affairs
A hygiene factor – ignore it at your peril
Timely access to the right people
Framing the strategy clearly and confidently
Understanding and communicating:What were the event triggers?What are the critical issues that led to this? What is happening in the background (industry, economically, etc)?
After an event, media focus is on strategy (what you are doing now?) as opposed to the business model (how you make money)
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When do journalists’ musings matter?
When your company has a big consumer footprint
When politicians or other major opinion leaders might take notice
When your company has many direct shareholders and customers who listen to these journalists
When your company is perceived as an iconic brand name (Qantas, Telstra, CBA, NRMA) – everybody thinks they should have a say in how these companies are managed!
When your CEO cares about how public comment reflects on his or her reputation
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What makes a good relationship with the media?
Build a relationship – get to know who writes about you
Help journalists to understand your wider industry as well as your organisation
Don’t mass spam your press releases – target your audience
Don’t try to manage the press! Hate exclusives – if have a release, be open
It’s all about the story – welcome coming with comments on issues, ideas for stories, positions on events
Give advance notice of CEO and senior management availability for interviews – especially if based interstate
Return calls and emails promptly – even just to say you’re unable to respond or you’re working on it
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INSIDE STORY Research and Knowledge Management | Level 5, 2 Barrack Street, Sydney NSW 2000Tel: 02 9299 9979 | Fax: 02 9299 7991 | Email: [email protected] | Web: www.insidestory.com.au | ACN: 00 364 0953 | ABN: 46 795 383
901
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