In one of his famous Six Memos, “Exactitude”, the unforgettable Italo Calvino (among the 20th Century’s top ten Italian authors) concentrates on the power of words. And, on the other hand, the increasing banality of language in the modern age. Words are like an outfit: they give shape to our thoughts and allow us to decide how we wish to be perceived in public by everyone we encounter. Reputation is a company’s most important intangible asset. It can have a concrete effect on consumer behaviour. Nowadays people express their opinion more freely than ever before, and are fully conscious of being part of the global equation. They can affect the reputation of a company, a bank or public body. They can alter the perception of an influential person, whether that person is a company delegate, a government minister or a famous artist, drastically reducing their functioning capacity. How many organisations have a reputation management project that can bridge the gap between how they are perceived now and how they would like their stakeholders to perceive them?
The British newspaper The Observer once published a photograph of a public protest in which a banner read: “We are all social networks”. This could not be truer: thanks to the web, everyday connections have grown to levels that can no longer be ignored. But how many companies have a fully functional plan to manage their reputation on digital and social media? People want to feel unique; let’s make them feel important – because they are important. The success or failure of a product or service depends on them – on what they think of your brand and your business practices, on the opinions their friends and colleagues express (and then post on online forums). These variables, which can quickly make or break any company’s reputation, are vital. In a hyper-connected world, search engines are the biggest deciders of reputation, rewarding or punishing behaviours with a ranking that will affect future searches for your company.
Public Institutions and decision makers
Reputation management 2.0 entails listening to feedback with an open mind and steering the public towards improving their perception of you. The public are potentially your greatest ally. They can help you improve your reputation and therefore your power to influence society. Or completely ruin it, if for example your reputational front isn’t adequately protected. How many decision makers have at their disposal a strategic communication plan? And how many have 24/7 real time defence of their digital presence, complete with a reputational crisis management plan?
The term “storytelling” has firmly established its presence in the workplace lexicon. Not only does it represent the future – by now the present, in fact – of telling brands’ stories, it tells of the power of contemporary culture that fuses brands’ stories with those of the consumer, in perfect synthesis. It’s the process through which new stories are created and new markets open up, starting with the sharing of the content and ideas that the clients themselves build around a product, service or brand. The age of merely sharing content everywhere – without taking care over how it’s received – is over. You have to work with systems that foresee instant feedback as well as tools for collective storytelling. It goes without saying that users want to have their say on a brand’s story, but they also want to be able to influence the brand itself. The success story is discarded by the writers and left to the public. This is uncharted territory, in which production and consumption swap places and reassess their aims. This is an interconnected era, the age of real web 2.0 participation. More and more companies are also working to create brand communities: it’s by some stretch harder to create, but it can potentially lead to greater rewards. Creating a community means offering your audience a platform where they can discuss, share, learn, and meet like-minded people. It requires clear ideas, attentive design, patience, empathy and constant guidance. The reward will be an array of so-called evangelists – your most active supporters – who have got your brand’s back. Creating a popular community is not that simple, especially without professional support, but the concrete return on investment is both tangible and measurable.
At its most advanced level, reputation management works on the basis that it is better to predict worst case scenarios and be well prepared to solve them efficiently than to wait for them to happen and then manage the consequences. In this case, reputation management becomes crisis management, and benefits from crisis management techniques. This is another line of thought in reputation management that is conveniently forgotten: that of potential reputation crises. With the advent of 2.0 technological innovation and the affirmation of the internet’s global reach, local impact has become global. For example, something that might be considered a small setback can damage a brand on a much bigger scale. The ways in which information is propagated and an event that could jeopardise sales is “governed” are often more pertinent than the crisis itself. Events that bear little significance in themselves can be blown out of proportion, and situations that have nothing to do with your organisation can have a highly negative impact on sales, considerably limiting your reach. Proper – preferably preventative – management of reputational crises therefore becomes a vital tool in stopping a manager or business owner’s years of dedication and professionalism from being frustrated or called into question by a poorly managed reputational moment. In Italy – a country unfortunately poorly sensitised to the subject of reputational risk management – there are numerous stories confirming the old adage about the conditions of home burglary policies only being met after the burglars have visited. What a pity that when the problem is diffused, it’s almost always too late to manage it efficiently…
The European Commission’s Green Book defines social responsibility as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary Basis”. In my article “The ethical dimension of business life” I quoted Nobel Prize winner Milton Friedman, who in the 80s declared that “the only social responsibility of business is to pay taxes”. Time has profoundly changed this concept. Today, globalisation has spawned new concerns and expectations among consumers, communities, public bodies and investors. Companies are strongly rooted and connected to their area of operation and with society in general. Sometimes more than even the business owners themselves realise. Taking action on this inevitably means assuming new responsibilities which in the past were not part of everyday business life. But as always, new situations can and must be “managed”, and from that which appears to be a new problem, very interesting new opportunities may arise. Companies are no longer simply required to churn out profits or to do their job well. Top management is called upon to answer questions about reduction of poverty, environmental and social commitment, and quality of life. Today’s companies must deal with a truly global market – not just in a geographical sense, as we have known for decades – but as part of the “neural network” of the society in which they operate. Fulfilling one’s duty in terms of social responsibility doesn’t mean publishing a social report with a mere list of charitable acts: the days in which it was enough to “do some good” and then tell the story in a press release, shortly before a lavishly catered briefing for the journalists, are definitely over. Companies are part of a complex network, which at a global level connects everybody – every institution with another institution, every company with other companies, and all of these with each other. Only the development of these relationships (starting, naturally, with those that are “nearest”, and in a way that is gradual and sustainable for the investor) can guarantee the shareholders a truly significant and long lasting return on investment.
Continuous Flow Reporting
CSR evolved digitally. Thanks to a research deal and use of intellectual rights with one of Italy’s top experts in this sector, we have built the world’s first “Social Hub”. Based on a project born in 2008 and developed for years as a “work in progress” in various beta versions, the publicly launched platform involves an online integrated corporate report available 365 days a year, built not only by the company but by its stakeholders, to prevent the possibility of any end-of-year “tweaking”. In this scenario, the eventual publication of negative results becomes immediate critical analysis and highlights pockets of inefficiency which would otherwise pass unnoticed. No more of the hagiography or “do-goodism” typical of the social reports of old. Showing things how they are, transparently, with stats and figures that the public can read at any point during the exercise, in order to build a reputation solidly based on constant and productive dialogue with the company’s patrons, with the aim of building trust and thereby influencing consumer behaviour.
All reputation management activities can and must be carried out via multi-channel. By no means the only tool for spreading news and establishing a company’s or public body’s reputation, it’s certainly one that is favoured by mainstream mass media, TV, radio and newspapers – even through national press agencies. From a reputation manager’s point of view the focus should not just be quantitative, as it often is for press officers, but above all qualitative. Reputation reinforcement and the positive steering of consumer behaviour in the brand’s favour doesn’t necessarily come from a saturation of articles. It comes from paying close attention to identifying, selecting and creating content. And from there, the headlines – without neglecting the articles’ impact and effect on public sentiment, or the need to promptly monitor and manage negative or hostile comments in the digital realm. After years of research, with varying results, we have unequivocally chosen ESPRESSO as our qualified partner for this kind of activity. This dynamic Milan-based company shares our “circular” and strategic vision of corporate communication around reputation building.
Unfortunately, Italy is not a country known for its sensitivity to reputational crisis. Measures tend to only be taken in response to an overt crisis that is already underway, when it’s too late to effectively manage any backlash against a brand. One of the most commonly weaknesses from this point of view is the lack of a nominated brand spokesperson (a senior figure such as the CEO or a trusted manager) who can take on the role of frontman to the press, the authorities and more generally to the public, should it be necessary to quash a reputational crisis. This person’s training follows a clearly defined path, which for obvious reasons can and should not be improvised. Managing this aspect in a timely manner protects the shareholders’ values and increases the company’s resilience.
The truth is that we all communicate on a daily basis in the workplace and in our daily lives but despite this, few people know the basic principles that govern effective communication, and even fewer know how to put these principles into practice. Just as with many other human activities, communication has precise rules and criteria for execution, but it is not always instinctive and natural to apply them: taken together, they are the fundamentals of communication itself. The term “fundamentals” was chosen by the researchers in analogy to what happens in sports where every discipline has a set of precise technical movements that must be carefully learned in order to be successful. In the corporate environment, communication handled with poor fundamentals has a high probability of not being received correctly, causing irritation and maybe even triggering attitudes of unwillingness to cooperate, with inevitable consequent damage in terms of productivity.
According to research carried out by the Holmes Report on a sample of about 400 large U.S. and British companies, the economic damage attributable to poor communications and lack of knowledge of company procedures and policies was, in a single year, about $37 billion, with an average total cost per company of about $62 million. By contrast, when managers and company personnel have greater communication skills, there are significantly greater financial returns.
Working in collaboration with a team of scientific researchers, our company has created an effective tool-kit to train key individuals in private and public organizations and brings together years of research on these topics. We have created a unique, immersive and highly professional training model designed to train top management to withstand the pressures and stresses typical of a crisis, better manage communication flows and make them more effective in everyday corporate life.
When a CEO and their organization know how to use the correct bases of communication, unsuspected improvements in performance and efficiency can be observed, which transcend the workplace and the corporate environment, reflecting positively externally in terms of image, influence exerted and increased reach of the organization.