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Reputation Mangement Conference, Sydney 2011

September 7, 2011

Reputation Summit 2011 was held in Sydney over 2 days last week and it provided delegates with a wealth of strategies on how to enhance, protect or rebuild corporate reputation.

Speakers provided crucial insights, mostly from personal experiences that ranged from disaster management to total rebranding.

Since this is such a long post, packed full of useful insights, it has links to each of the speakers.

The theme for Day 1 was that customers and employees come first. When it comes to reputation, turning opponents into supporters and then into brand ambassadors can pay huge dividends:

Day 2 provided a variety of case studies on how to manage a crisis event or build a brand from the perpective of a mistake, a business deal and a natural disaster:

Richard Hadler, General Manager Corporate Affair, Coles:

Richard Hadler described the massive turnaround Coles has experienced in the last couple of years. He explained that they are currently about half way through the plan to rebuild a brand that was close to shutting the doors for good.

When Wesfarmers gained control of the Coles Group in 2008 it was clear that the brand was in trouble. The former owners had implemented cost savings on the consumer side of the business that resulted in poorly stocked shelves, terrible fresh food and broken equipment, all of which lead to a bad consumer experience and a damaged reputation.

In short, the business was being run purely to appear financially strong for shareholders with little or no consideration given to customers and that focus was leading to a complete demise of the supermarket business.

Wesfarmers introduced a new management team whose top priority was on shifting the focus from the shareholder to the customer as the primary stakeholder.

They undertook extensive market research on attitudes towards the brand and on the types of things that customers actually want. The new Managing Director, Ian McLeod, spent his first day on the job visiting stores and taking photographs and assessing perceptions rather than moving into his office at Coles HQ.

As a result, Coles developed a 5 year plan to completely overhaul the business. Some of the initiatives include providing ‘humane treatment of animals’ products such as hormone free beef, barn-kept pork and free range eggs, a dramatic increase in the quality of fresh food and in-house bakery and butchery.

The “down, down” campaign has also played a major part in the turn-around for the brand, despite the negative media coverage that’s accompanied it. When the campaign began and “prices came down and are staying down”, there were protestations by suppliers and industry groups about the effect it would have on primary producers, such as dairy farmers.

These protests gained a lot of media attention however Coles stood by the policy of putting the customer’s interest first and that decision paid dividends; not just for Coles and their customers but for the suppliers as well.

Since the campaign began, Coles has seen 2,000,000 more transactions per week, have saved customers over $800 million and suppliers have seen and overall increase in net profits.

Prices may have gone “down down” but their corporate reputation is definitely on the up and up.

David Breen, Head of Corporate Affairs, ING DIRECT

David Breen reinforced Richard Hadler’s assertion that putting customer interests ahead of all other stakeholders is a key strategy for building corporate reputation. ING DIRECT are currently the 6th most trusted of ALL brands in Australia and are streets ahead of other banks when it comes to reputation.

ING DIRECT believe that 1900-1960 was the Age of Manufacturing, 1960-1990 was the Age of Distribution, 1990-2010 was the Age of Information and now we are in the Age of the Customer.

Senior management at ING DIRECT put a heavy emphasis on the role corporate communications plays in the building of corporate reputation, to the point of ensuring they are involved in the decision making when it comes to issues that will affect customers, such as interest rates.

The culture within ING DIRECT more generally is one of inclusive and open communication with all staff. They conduct “Easy Day” where all employees are encouraged to submit ideas on how their lives can be made easier. This could include things like attending meetings that weren’t necessary (and therefore a waste of time) to more trivial matters. Literally anything that could be done to make their work life easier is submitted and each response is read by the CEO. This approach fosters a positive attitude with the staff that allows them to identify problems and, just as importantly, voice their concerns ‘without the fear of having their head’s bitten off’.

David joked that if you’re trying to get board support for reputation measures, simply mention Vodafone or News Limited and you should get prompt attention, if not approval.

Interestingly, David Breen pointed out that gradually ratcheting up fees, like most of the major banks in Australia, is great for short term gain but it has a devastating slow burn effect on reputation.

Not happy to rest on their laurels, ING DIRECT are continuing to look for ways to enhance their corporate reputation, admitting that bridging the gap between having happy customers and brand ambassadors is something they don’t have an answer to. They are trialling a variety of initiatives, however, aimed at doing exactly that. Things such as randomly covering a customer’s dinner when they go to pay the bill or delivering a flat-screen TV with a pizza order are example of how ING DIRECT are constantly searching for ways to turn customers into fans.

Oliver Freedman, Director, Reputation Institute Australia

Oliver Freedman shared some of the insights he’s gained in his roles both for Reputation Institute Australia and AMR.

AMRs research suggests Australian companies that rank in the Top 10 for corporate reputation will have 40% of their customers recommending them to friends or relatives. Conversely, for companies that are in the Bottom 10, 40% of customers refuse to support them. These figures in turn directly affect sales and repeat business.

Oliver Freedman recommends a reputation model that’s made up of 7 different components. His drivers for reputation are; Products, Innovation, Workplace, Governance, Citizenship, Leadership and Performance. Each of these drivers break down into various sub-groups and each have a significant effect on how a company is perceived, therefore the strength of it’s corporate reputation.

Oliver also pointed out the correlation between reputation and share market value. For publicly listed companies, those with good corporate reputation significantly outperform companies with average or poor reputations. How much? Try 55% to 85% more.

Clayton Ford, Senior Manager, Centre for Corporate and Public Affairs

Helpfully, Clayton Ford has made the slideshow that accompanied his speech available. Clayton’s speech shifted the focus from the customer to the employee, theorising that loyal and happy employees are the strongest brand ambassador a company can have.

He also pointed out that some of the world’s most significant examples of brand reputation damage caused via social media (citing Comcast, Target, Domino’s, Habitat and, of course, United Airlines) have a common thread; they were all caused by the companies’ own employees shooting them in the foot.

Employees are the greatest resource for building your brand reputation because they are the most trusted source about information about the company, they are the main point of contact with the consumer – indeed they often are the consumer – and they communicate their attitude towards the company through their behaviour.

There are 4 attributes of good corporate reputation: reliability, responsibility, credibility, trustworthiness.

As consumers become more aware of traditional means of marketing tricks, they are becoming more cynical of planned communications. They are making a conscious choice to judge the unconscious behaviours of a company and it’s employees. This effect is amplified by social media.

Clayton then provided 2 case studies from South West Airlines and Singapore Airlines that demonstrate the power of putting the employee first.

Specifically in regards to social media, Clayton points out that trying to ban employees from engaging in social media will fail, a far better strategy is to turn them into brand ambassadors.

Ultimately when brand & culture clash, it devastates the business. When brand & culture match, it devastates the competition.

Warren Kirby, CEO, Wieck Australasia

Not that I’m one to brag, but I delivered what can only be described as the Speech of the Century. I dare say, in years to come, some of it will be quoted on calendars and posters worldwide. It made people laugh, it made people cry, and it can be found here.

In short, I described the changing landscape of the media in the Digital Age and how an online newsroom is an essential tool for public relations professionals. Having an online newsroom removes the need for communicators to handle every media enquiry and focus on the big picture; a point reinforced later in the day by David Van.

Annalie Killian, Catalyst for Magic, AMP

There’s no doubt in my mind that Annalie has the coolest job title ever – Catalyst for Magic. Unfortunately I didn’t get a business card from her so I can’t be sure that this is her actual title, never the less, definitely cool.

Part of her magical responsibilities includes social media engagement for AMP and enhancing brand reputation.

Annalie did a quick poll to determine whether there was anybody from Legal or Finance departments attending the conference and was a little disappointed to find the crowd were mainly corporate communicators. She suggested that communications needs to encourage other departments, particularly legal and finance, to be influencers when it comes to corporate reputation. The rationale is that collaborative effort is always far more successful than approaching it as adversaries.

One of the projects the Catalyst for Magic works on is AMP’s Amplify Festival. Since its origins in 2005 as a learning experiment for AMP, Amplify has contemplated the impact of technology on our lives and the future of financial services through different themes.

AMP uses Amplify is an investment in its people, partners and customers.

Getting a project like Amplify off the ground is quite a challenge, much like overcoming the natural aversion to social media by legal types, however Annalie suggests it’s “always better to start with the cupcake before you try to bake the big cake”.

AMP uses Yammer as an internal means of social media engagement and they believe this is an ideal platform for companies wanting to play in the social media arena but are unsure of how to go about it.

David Van, Managing Director, DeWintern Group

Having sat through no less than three Royal Commissions, David Van knows a thing or three about managing corporate reputation.

David pointed out that there are many definitions of reputation out there and, to an extent, they all reflect what is a difficult thing to define. The Reputation Institute defines corporate reputation as “aggregate perceptions and interpretations of a company’s past actions and future prospects.” While this is absolutely correct, DeWintern doesn’t find it helps with actually managing Reputation.

DeWintern define reputation as: ‘the expectation stakeholders have of how the organisation will impact them or their interests” Including expectations is critical to actually managing reputation because it provides a baseline standard to consumers to assess success or failure.

DeWintern’s definition also brings a degree of relativity to reputation management and this is important as no two entities are the same.  For example we have different expectations of a high court judge than we do a car salesman, yet in managing their reputation we shouldn’t try to make a salesman seem like a judge. What we do need to set is an expectation of how dealing with either will affect their stakeholders.

Not only does an entities job play a part but also other factors such as quality and price.  For example we don’t have the same expectations of JetStar as we do of Qantas and by setting stakeholder expectations appropriately we therefore can manage reputation better.

Corporate Communicators must change their thinking to that of managing a company’s reputation, not just media relations.

And if there’s resistance from on-high about how important it is to incorporate reputation management into the role of Corporate Communications, David helpfully points out that 70% of a company’s reputation is based on the reputation of the CEO, so it’s definitely in their interest to take it seriously.

Gary Wheelhouse, Head of Social Media, Harvey Norman

Gary Wheelhouse was quick to point out that for social media you must add personality to raise brand awareness without selling anything. This is a tough concept for many companies to get their head around but it’s essential for effective engagement.

People who use social media are also quick to smell a rat and those situations can blow out of control very quickly. If you make a mistake, admit it. Own it. Fix it. And then move on. Don’t hide from criticism, engage.

Monitoring and responding quickly is vital to reputation in social media. Negatives can quickly be turned into positives because a rapid response shows that you care, you are listening and you are prepared to deal with any issues. As a side-note, Harvey Norman started following me because of my tweets during Gary’s presentation. I tested this philosophy out a couple of days after the conference by tweeting @HarveyNormanAU; they did in fact respond and engaged in a light-hearted conversation via Twitter.

Gary also pointed out that when you are responding via social media you have to be human. Corporate double-speak won’t cut it. If you have to think about it too much your personality isn’t coming through – and a sense of humour helps!

Effectively engaging in social media is so important because people yell at buildings or brands or logos or slogans but they respond to people. Social media provides companies with the opportunity to humanise.

Gary acknowledged that there is a difference between consumers who want to talk about you and those that want to talk to you. However, if you respond even to those that want to talk about you, the majority of the time the outcome is positive.

Jane Counsel, Senior Media Relations Manager, Westpac

Jane Counsel provided delegates with insight as to what it’s like to be caught up in a media feeding frenzy. A quick google search of “Westpac Bananagate” is enough to set the scene for the severe damage caused to Westpac’s reputation by raising interest rates almost double the amount the Reserve Bank did in December 2009.

To smooth(ie) things over, Westpac released a video that was universally panned for being patronising, insensitive, childish and condescending. The media relations team wanted the video to remain in-house, never to see the light of day, but apparently a senior manager thought they knew better than the team that are paid to give that kind of advice. This is an interesting parallel to Clayton Ford’s examples.

It seems that just because you’ve read a newspaper, it doesn’t mean that you understand the media.

Westpac’s reputation was so badly damaged, it’s taken over a year to recover. The media soon turned from the bank itself to start attacking the CEO, Gail Kelly. Perhaps it was tall-poppy syndrome, perhaps it was simply an opportunity for the media to attack the Gail Kelly brand; whatever it was, the attacks were very personal and moved well away from the original furore over the interest rate hike. This is another interesting parallel to David Van’s point on how closely the CEO’s reputation is tied to the company’s.

When it comes to crisis management, Jane recommends getting on the front foot ASAP. Speed, transparency and authenticity are all vital.

And when events are rapidly unfolding, “I don’t have that information” is a far better response for the media than “no comment”.

Roger Sharp, Director of Corporate Affairs, Bupa

Roger Sharp’s presentation was focused on Corporate Social Responsibility. Having said that, he was quite clear that businesses should stop thinking about it as CSR and start thinking about it as CR – Corporate Reputation.

In order for it to work, CSR/CR cannot simply be something a company does to benefit a charity or cause. It must be good for the three C’s charity, the consumer and the company. While the first two are fairly obvious, number three must not be forgotten. If number three benefits as well, there’ll be more resources available to numbers one and two, therefore more benefit to number three.

Reporting the success of CSR/CR initiatives is important however don’t let the tail wag the dog. Good CSR/CR is an integrated, not isolated, proposition. Link the activities heavily to the brand because successful CSR will translate to successful CR.

Using social media to help drive the campaign is a good strategy however, like the CSR/CR itself, the engagement must be genuine. You must have one over-riding strategy, not 100 different tactics.

It’s also important to understand that increasingly something that starts in the social sphere moves to traditional media, not the other way around.

Since Bupa is the relatively unknown parent company of multiple retail brands involved in a variety of health care sectors, enhancing their corporate reputation is inextricably linked to CSR/CR. They provide services for Aged Care, Private Health Insurance, Health Coaching, Chronic Disease Management, Corporate Wellness and Optical and are committed to helping people live longer, healthier and happier lives.

It’s easy to see how Bupa’s CSR/CR goals are directly tied to their corporate success however this only serves to underline Roger Sharp’s key point – CSR must work for all 3 C’s.

Alicia Kennedy, Area Director, Meltwater Group

While most people are aware of the significance of social media’s impact in Australia, some of the statistics Alicia Kennedy produced are enough to make even the biggest social media proponents sit up and pay attention. For example, over 4 major social media channels there were 27.8 million individual engagements in the month of June 2011. That’s around 644 per minute without accounting for peak times.

Yet research shows that while 84% of companies believe it’s important to monitor online activity, only 20% have invested in tools to do it.

Justifying ROI for social media is always a challenge but there is a direct correlation between the noise surrounding a company or issue and the engagement effort of that company.

Engagement in social media can no longer be ignored and, as was expressed repeatedly by almost every other speaker, getting it right is critical to corporate reputation.

Alicia offered a couple of handy tips for responding to social media noise surrounding your brand. Ask yourself, “would I reply to an email?” and then consider that hundreds – maybe millions – of eyes are waiting to see that reply. You must also respond AFTER listening and take into consideration the influence, the regularity and the number of channels of the person your responding to.

Ben Hamilton, Head of Corporate Strategy & Communications, Essential Energy

What do you do when you have a very well respected brand name taken away from you, yet you are still doing the same thing as you always were?

That was the question the operational arm of Country Energy faced when Origin Energy bought the retail component from them. The deal meant that they could no longer continue to use the name Country Energy, yet they were still responsive for building, operating and maintaining Australia’s largest electricity network – delivering essential network services to more than 800,000 homes and businesses across 95 per cent of NSW, parts of southern Queensland and northern Victoria.

Country Energy was so well respected that over 90% of their consumers thought they were good or excellent as a responsible provider of an essential service. The new brand, Essential Energy was completely unknown.

The transition had to be made over a relatively short time frame and, aside from the challenge of informing customers, Essential Energy had rebrand 150 property locations, over 6000 fleet and plant items, over 20,000 uniforms as well as things like stationary and IT systems.

Raising awareness of the change within rural and regional NSW was a challenge that required a careful understanding of the needs and media consumption of the people. The majority of their efforts were centred around television and local press. Social media was used in a very targeted way however, in the words of Ben Hamilton, “don’t assume digital is best for all engagement, in some cases you may be talking to an empty room.”

The main catch-cry used was “Our name may be changing, our heart’s still in the same place.” to provide reassurance that despite the name, it is still the same company. Essential Energy also used imagery that was unusual to a local market (eg workers in the snow being used at a coastal location) to remind customers of the diversity and strength of the company.

Overall the strategy was a success but Ben noted that some perceptions are hard to change, “For example, my grandmother still thinks I work at a county council…”

Leela Sutton, Corporate Affairs Manager, Lion

Not to be outdone, Leela Sutton had a rebranding story of her own. Lion Nathan was bought by Japanese giant Kirin in 2009, merged with National Foods and became Lion Nathan National Foods. Figuring this was too much of a mouthful, they decided to change their name again to simply Lion.

Two complete rebrands in two years; that should keep any communications professional fairly busy. However, as if that wasn’t enough, the company was hit by all three of the most significant natural disasters of the last year; the Japanese tsumani, the Christchurch earthquake and the Queensland floods all affected production facilities.

One of the unusual things about Lion is the large number of brands that are housed under the corporate banner. They own 3 of the top 5 beer brands in Australia and 6 of the top 10 brands in NZ. They are also a market leader in milk, cheese and other dairy foods, premium fine wines and juice.

Leela provided a case study on the impact the Queensland floods had on Lion and the balancing act they were required to participate in with the media during that time.

One of the best lessons learned from the crisis was that fast escalation to senior management was critical to mobilising a response and secure necessary expenditure to deal with the situation. Fortunately, Lion has an inclusive culture whereby senior management is open to receiving bad news – this alone proved to be a huge benefit.

During the floods, Lion discovered that an insatiable media appetite meant that Lion people, Qld pubs and clubs, farmers and dairy groups, suppliers and distributors, consumers and community groups all became potential media talent. This meant the potential for misinformation was huge. This underlined the need to have a strong corporate reputation before a crisis develops.

As a matter of priority, they established a “One source of truth” policy which meant all internal and external communications passed through Corporate Affairs. CA were responsible for keeping everyone up-to-date; senior management, customers, farmers and the media .

There were other forces that were perhaps unique to Queensland; XXXX beer is synonymous with the state and their dairy and drinks products are not only a daily staple but are supplied by some of the most affected communities and farmers. This meant that there was extra media interest in Lion and necessitated judgement calls as to whether it was appropriate to respond to media requests after the floods.

Ultimately the decision was made that the Lion brands were so intrinsic to Queenslanders that they should respond. Reporting on XXXX became a positive because it provided a distraction from the personal woes of those affected by the floods.

After the crisis had passed, Lion underwent significant reporting and review of the events, how they were handled and how they can be improved in the future. Having senior management involved in this process is vital to ensuring adequate support is given for any future disaster management.

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One Comment leave one →
  1. September 14, 2011 9:12 pm

    Thanks for this excellent summary Warren, and to Wieck for supporting a great conference. Having read your post, I’m even more disappointed I couldn’t stay longer, but definitely appreciated the presentations I saw (including the speech of the century!), and the people I met. A really helpful post – you were clearly engaged for the two full days!

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