Professional Reputation Management: Measurement and …Professional Reputation Management:...

3er Congreso Internacional de Comunicación Organizacional

Professional Reputation Management: Measurement and Management

Prof.dr Cees B.M. van RielManaging Director Reputation Institute, New York

Professor of Corporate Communication at RSM Erasmus University Rotterdam, The Netherlands

Bogotá, August 5, 2005

2© Reputation Institute, 2005

Reputation Institute: history, goals and structure

The RI International Network:

RI Offices

Affiliates Associates

ClientsMembers

Started in 1997 by Dr. Charles J. Fombrun and Dr. Cees B.M. van Riel

MISSON: to advance knowledge about corporate reputation and to help companies create value from reputation management


RI Affiliates

Europe

– Belgium: (Frank TFree U. of Bruss

– Denmark: CBS (Majken Sch

– Germany: U. of

– Italy: Bocconi

– Netherlands: Erasmus

– Norway: BI (Peggy

– Spain: Foro de Reputacion

– Sweden: Stock

– UK: Henley Management College (Kevin Money

Business Schoolartmouth

(William Pullen)

hevisen) els

ultz)

Hannover (Klaus-Peter Wiedmann)

(Davide Ravasi)

U. (Cees van Riel)

S. Brönn)

Corporativa

holm U. (Tony Apéria)

)

USA, Africa & Australia

- Australia: Dr. Grahame Dowling, AGSM

- South Africa: Dominik Heil, Wits- USA: Paul Argenti, Tuck School at D

South America

- Brazil: Ana Luisa Almeida

- Chile – Generacion Empreserial

The RI is building a global network of

An RI Affiliate can be an academic institution or

representatives & affiliates in order to generate knowledge about reputation

an organization dedicated to the field of ReputationAn RI Affiliate is our preferred partner in release of international RI research


RI Associates & Research Partners

RI Research Partners

Media Analysis– Observer– Dentsu– Cubit

Market Research– IPSOS– AMR Interactive

Europe + Africa:

– Norway -Apeland– Spain –Kantya– Sweden – Nordic Brand Leadership– France -I&E– UK –Henley Management College– Germany – Hering Schuppener– Turkey – Orsa– South Africa –Mowana Media Inv.

Latin & South America– Chile - Feedback– Brazil – Troiano/IDEIA

Asia Pacific– Australia - Strategic Intelligence Group

RI Associates have exclusive rights to RI concepts, products and

RI relies on Associates for international pr

RI Associates are fully operating companies involved in reputation management

branding in their local markets.

ojects involving local markets.

, branding and corporate communication


Agenda for today

Why do Reputations Matter?Measuring and Managing External Support Measuring and Managing Internal SupportMeasuring and Managing Expressive Communication Take Aways

Why do Reputations Matter?


Why do Reputations Matter?

If you want to know why CORPORATE Reputations Matter, you have to think about why INDIVIDUALS have good or bad Reputations


Often mentioned in The Netherlands…


Indonesia


Often mentioned in Brazil


Colombia


Antecedents & consequences of a positive reputation

CommunicationONLY one of the antecedents of a

positive reputation

CommunicationCommunicationONLY one of the antecedents of a

positive reputation

ReputationReputation

Actual performance and behaviour

Actual performance and behaviour

ContextContext

Makes Jobs More Attractive

& Motivating

Makes Jobs More Attractive

& Motivating

Generates Favorable Press & Public Support Generates Favorable

Press & Public Support

Encourages Repeat Purchases &

Builds Market Share

Encourages Repeat Purchases &

Builds Market Share

Lowers Capital Costs & Brings InvestmentLowers Capital Costs & Brings Investment

• There are various antecedents of reputation. Corporate Communication is one of them.


RI’s Approach to Reputation Management

ReputationCommunication Expressiveness

Strategic Alignment

EcQ ®Research

RepTrack®CEQ ®

The RI can support organizations with three main clusters of tracking methods and the practical consequences of the outcomes of these studies in Result Driven Solutions: (1)

external e.g. RepTrack ®, (2) internal (e.g. EcQ ®) and (3) messaging ( e.g. expressiveness analyses, development of corporate stories, etc.)

Measuring and Managing External Support


Corporate Reputations are Perceptions...

• Expectations by:

– Customers – Investors– Employees– Suppliers– Public – Analysts– Media– Regulators

About a company’s:

PerformanceProductsServicesActivitiesEmployeesOrganization


Stakeholder Perceptions: The upside potential for reputation gains

Activists

Investors

Employees

Customers

Media

Regulators

Promise offAdvocacy

Promise ofFavorableCoverage

Promise ofLegal Action

Promise ofCommitment

Promise ofValue

Promise ofLoyalty

Partners

Promise ofCollaboration

CommunityPromise ofLegitimacy

OpportunityPlatform


Stakeholder Perceptions:The downside risk of reputation loss

ReputationalRisk

Activists

Investors

Employees

Customers

Media

Regulators

Threat ofBoycott

Threat ofExposure

Threat ofLegal Action

Threat ofRogue Behavior

Threat toValue

Threat ofMisunderstanding

Partners

Threat ofDefection

CommunityThreat of

Illegitimacy


Harris-Fombrun Reputation QuotientSM (RQ)

REPUTATIONREPUTATION

EmotionalAppeal

FinancialPerformance

WorkplaceEnvironment

Products &Services

Vision &Leadership

SocialResponsibility

ReputationReputation

Feel Good About Admire and Respect Trust

Market Opportunities Excellent Leadership Clear Vision for the Future

Rewards Employees Fairly Good Place to Work Good Employees

Outperforms Competitors Record of Profitability Low Risk Investment Growth Prospects

Supports Good Causes Environmental Responsibility Community Responsibility

High Quality Innovative Value for Money Stands Behind

7-pt scale7 = “Describes very well”1 = “Does not describe well”


Top Rated Companies (2004)Using Standardized RQ Scores

Company RQ* (Z-score) CountryTine 1.74 Norway

Virgin Blue 1.64 Australia

Microsoft 1.59 Australia

L'Oreal 1.46 France

A.P. Møller-Mærsk 1.46 DK

IKEA 1.41 Sweden

Virgin Group 1.39 UK

Johnson & Johnson 1.27 USA

REMA 1000 1.26 Norway

Sony 1.25 UK

Porsche 1.23 Germany

ALDI 1.20 Germany

Nokia 1.20 Sweden

3M 1.19 USA

Danone 1.18 France


Lowest Rated Companies (2004)Using Standardized RQ Scores

Company RQ* (Z-score) CountryAdelphia Communications -1.56 USA

SAS -1.71 Norway

Credit Lyonnais -1.72 France

AMP -1.72 Australia

Kmart -1.72 USA

NSB -1.75 Norway

NAB -1.75 Australia

Halliburton -1.81 USA

Skandia -2.02 Sweden

Vivendi -2.05 France

Deutsche Bahn -2.12 Germany

MCI -2.51 USA

Enron -4.01 USA


A Typical RQ Analysis…

Products &Services

.56

FinancialPerformance

.15 Vision &Leadership

.04

WorkplaceEnvironment

.34

EmotionalAppeal

SocialResponsibility

.40

.64Note: Numbers are derived weights, range from 0 to 1, and indicate the relative impact of one variable on another.


Recent Developments (2005)

Address Weaknesses of RQ Instrument– Weightings of Attributes– Additional Attributes

Address Weaknesses of Annual RQ Studies– Annual vs. Periodic vs. Continuous– Visible vs. non-Visible Companies

RepTrack®


The Attributes of RepTrack®


Calculating a Company’s RepTrack Score

• RepTrack® instrument was developed from qualitative research conducted in7 countries.

• RepTrack® is built on 22 attributes organized around 7 dimensions. An attribute score is made up by an average of respondent answers. Dimensions scores are made up by averages of 3-4 attributes each.

• The RepTrack® Score is a weighted index developed from the individual attribute scores. The attribute weights differ from country to country and are determined based on multivariate analyses conducted from RI’s national reputation studies.

Measuring and Managing Internal Support


Professional steps to be taken in Reputation Management

External support: RepTrack®

Communication Expressiveness

Internal Support

ECQ CEQ

12 3


Assessing Support for Shared Meaning

Aim various multi-business companies- Becoming an aligned group of companies (reinforce accountability,

more cooperation and synergy)

Implying:- Creating support for alignment in all parts of the organization

Method:- EcQ monitor; a method aimed at assessing the added value of

employee communication (both by managers and by the communication department) increasing support for the core strategic issues


What is Strategic Alignment and Why is it Important?

• Strategic Alignment: Involves creating employee support the Strategic Initiatives that the company seeks

to achieve.

• Building Strategic Alignment is vital: Companies depend on employees to achieve strategic initiatives.

•Ultimately, strategic alignment leads to better organizational performance.

•Hence, organizations should create strategic alignment to facilitate their functioning.

Shared understanding of strategic prioritiesis crucial, implying:

Do employees understand and support the strategy?

Is the organization capable of implementing the strategy?

Does the organization unlock thefull potential of key people?


How do you create Strategic Alignment?

This report shows that various globally active firms forge alignment in many ways –by breaking down silos, integrating systems. coordinating business unit activities to achieve strategic initiatives. Strongly aligned companies have a shared vision of what they want to achieve and why.

Getting there requires the unwavering support of top management and the sustained commitment of every stakeholder to the change effort.

Companies can apply hard and soft-wiredinitiatives to create an aligned company. Replacing executives, variable pay, performance contracts, etc. are examples of ‘hard’ tools. Soft tools are leadership development, empowerment, internal communication and storytellingSoft-wired initiatives work best

Source: The Conference Board 2003


Key Question to Ask: Do employees live up to the Strategic Initiatives of the Firm?

The purple promise

“I will make every FedEx experience

outstanding”

What should be done to make this work?


How to Create Strategic Alignment: Four Step Approach

Awareness

Understanding

Awareness

SupportiveBehavior

DevelopingCapabilities


Tools used by winning firms to create Strategic Alignment

Awareness

Understanding

Awareness

SupportiveBehavior

DevelopingCapabilities

Channels like FXTVIntranet, magazinesSymbols

Open Book Management

Global Life Audio Conference

Core ValuesCascade TourTown Hall Meetings

Knowledge Management Corporate Universities

Group Decision Room


Creating Strategic Alignment: monitoring progress with EcQ ®

Awareness

Understanding

Awareness

SupportiveBehavior

DevelopingCapabilitiesEcQ® Monitor

Tracking Strategic Alignment with the EcQ® Monitor


What is and does the EcQ® Monitor

The EcQ® Monitor is a standardized instrument developed by Dr. Cees B.M. van Riel (Erasmus University & Reputation Institute).

The Objectives of the EcQ® Monitor are:

1. To assess the degree of employee support for a company’s strategic initiatives

2. To identify the drivers that create strategic alignment

3. To provide comparisons across divisions within the company and across companies.

4. To enable Organizations to optimize efforts in the area of employee communications and to set specific targets for improvement actions in this area.


Drivers of Strategic Alignment

Indicators of Employee Support

Strategic Alignment

Indicators of Employee Communication

Understanding Strategic

Initiatives

Awareness of Strategic

Initiatives

EcQ®

Communication Climate

Management communication

Internal media

Cross-departmental

communication

Individual messaging

Corporate messaging

Supportive Behaviorfor

Strategic Initiatives

Capabilities for implementing



The EcQ® Monitor: Employee Communication Attributes

Employee Communication

Quotient®

Employee Employee Communication Communication

Quotient®Quotient®

Management Communication

Corporate Messaging Individual Messaging

Internal MediaCross departmental communication

• Openness• Taken seriously• Involved in decision making

Information across departments and business units

• Useful• Accessible

Communication Climate

• Intensity of efforts• Increasing involvement with company

• Intensity of efforts• Upward communication• Motivates subordinates• Relevant topics are discussed

• Individual performance• Expectations of individual employee • Promotion opportunities, salaries

and work benefits

• Sufficient info about PS, FP,social programs

• Sufficient info about strategicinitiatives


Example: Overall results of an EcQ® Survey

improve

maintain

Immediate action

Maintain (≥70)Improve (60-69)Immediate action (≤60)

61.6 64.961.5

71.2

64.058.6

52.0

0

20

40

60

80

100

EcQ® Cross-departmental

communication

Internal media Managementcommunication'

Individualmessaging

Corporatemessaging

Communicationclimate


Benchmarking Employee Support Drivers

Total Div. 1 Div. 2 Div. 3 Div. 4 Div. 5 Div. 6

EcQ® 62.0 61.2 64.2 62.4 63.1 60.2 60.7

68.0

63.9

68.3

69.3

64.8

64.0

66.9

68.9

69.5

63.6

67.0

61.0

Awareness of Strategic Initiatives

65.6 61.1 62.8 65.3

Understanding of Strategic Initiatives

71.2 64.9 60.6 57.3

Capabilities for implementing Strategic

Initiatives

59.2 63.7 54.3 49.5

Supportive Behavior 68.6 65.0 67.3 58.6

Maintain (≥70)Improve (60-69)Immediate action (≤60)


Driver Analysis

Indicators of Employee Support

Strategic Alignment

Indicators of Employee Communication

Understanding Strategic

Initiatives

Awareness Strategic

InitiativesCommunication Climate

Management communication

Internal media

Cross-departmental

communication

Individual messaging

Corporate messaging

Supportive Behavior for


Capabilities for implementing


Correlations &

multivariate analysis


Key Benefits EcQ® Monitor• Strategic Alignment is crucial for all organizations; the higher the support for

strategic initiatives among employees, the higher the performance of an organization will be.

• Increasing support for strategic initiatives implies four pre-conditions: awareness, understanding, having appropriate capabilities and above all showing the desired type of behavior by employees.

• An up-to-date method to track systematically the degree of employee alignment, allowing companies to press the right buttons at the right time, is using RI’s EcQ ® Monitor, enabling a firm:

1. To assess the degree of employee support for a company’s strategic initiatives

2. To identify the drivers that create strategic alignment3. To provide comparisons across divisions within the company and

across companies.4. To enable a firm to optimize efforts in the area of employee

communications and to set specific targets for improvement actions in this area.

•



External support: RepTrack®


Internal Support

ECQ CEQ

12 3


Consistent

Distinctive

Authentic

Visible Transparent

Improving Communication Expressiveness


Principle #1: Reputation Comes from Visibility...

National Heritage

High Street Presence

MediaPresence

Strong brand(s)

Listed at StockExchange

Responsible Social Behavior

VISIBILITY

Dominant in Public Domain

Dominant in Market


Highly Visible Firms

Visible atNational Level

Visible at Global Level

Best WorstBestWorst


Principle #2:Distinctiveness from Emotions


Support Our Nurses


`̀CorePurpose

Values

ProjectionsImages

Reputation

Identity

Principle #3: Authenticity Comes from Inner Being


Principle #4:Consistency & Alignment -Internal & External

Innovation To solve unsolved problems3M

To experience the emotion of competition, winning, and crushing competitors

Just Do It

To make people happyMaking Magic Disney

External Messaging

Internal Purpose

Consistency


Principle #5: Transparency to All

TAKE AWAYS



External support RepTrack®


Internal support

ECQ CEQ

12 3

Finding the Galvanizing idea


TAKE AWAYS

• BE AWARE OF Critical Success Factors in REPUTATION MANAGEMENT– Introduce clear KPI’s for external (RepTrack), internal (EcQ)

support plus stimulate expressiveness in messaging by applying the CEQ

• TAKE TRACKING SERIOUSLY – Tracking will probably show that some improvements need to

be made• DEVELOP AN APPEALING REPUTATION

MANAGEMENT STRATEGY– Improve your reputation by focusing on the six reputation

drivers and the five Communication Expressiveness drivers

Professional Reputation Management: Measurement and …Professional Reputation Management:...

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