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From Leadership Crisis to a New Era of Permission:Practical Lessons from the Ketchum Leadership Communication Monitor

A Presentation by Rod Cartwright, Global Partner, KetchumRiga,13th May 2016

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V U C AVolatile Uncertain Complex Ambiguous3

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The global leadership crisis

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Mismatch between expectation and delivery

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The buck stops here

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I blame the parents

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You dont call, you dont write

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Poor leadership hits sales hard

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Business best of a bad bunch

So are any leaders actually doing well?Well actually, the corporate community scored relatively (and I mean relatively) well coming out on top as both leaders and communicators, with 42% of respondents globally feeling that business leaders are delivering against the expectations of themBut before we get too carried away, this leadership by the business community is very relative.Just 29% believe business leaders are providing effective leadership, 35% view business leaders as effective communicators and 33% believe they lead based on clear values

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Never trust a politician

And while is unsurprising that politicians scored lowest on every measure in all three years, the nature of the data for this leadership group is shocking 70% believe political leaders have fallen short of their expectations in the past 12 months26% view them as effective communicators23% as leading based on clear values17% as being effective leadersAnd just 9% as taking appropriate responsibility when things go wrongAnd yet 50% expect their performance to get even worse over the coming year!!14

Take it from the techies

Turning to vertical industries, all three years of the study have seen the technology sector coming top on every measureIndeed this year, 52% rate the technology sector as demonstrating effective leadership (up from 43% in 2013)47% as communicating effectively (up from 44% in 2012)30% as taking appropriate responsibility when things go wrong (a little down on 34% in 2013)And only 10% as having fallen short of expectations

Compare this with the banks, where 38% believe they have fallen short38% as demonstrating effective leadership33% as communicating effectivelyAnd just 11% as taking appropriate responsibility when things to wrong

And beyond these headline data, we have also cross-referenced data on the attributes that allow a company to be seen as a leader with these numbers allowing us to identify the leading drivers behind positive perceptions of each individual sector15

Financial Strength and Customer Service

% of consumers saying leadership has caused them to start/increase purchasing or stop/reduce purchasing from a brand in Banking

The US and SOUTH AFRICA are average. The UK, GERMANY, and ITALY are negative about leadership in Banks. INDIA, BRAZIL, and the UAE see this sector as having effective leadership. Though INDIA rated it well for taking responsibility when falling short, the UAE and BRAZIL did not.

BANKSDashboard

Compared with other countries and other industries in their 'home' country ...

So that was the problem part of the pictureBut what did the study tell us about what can be done by leaders and those who advise them on what can be done to rebuild confidence?And what is the role of communications in doing so?17

Death to the say-do gap

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What you do speaks so loudly that I cannot hear what you say. Ralph Waldo Emerson

And no one hears you19

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Character is like a tree and reputation its shadow. The shadow is what we think of it; the tree is the real thing. Abraham Lincoln

And at the end of the day, words only and communication can only do so much for reputation. Your actions and your ethics stand up and guide you to understand what you do and dont have permission for.20

The future is more feminine

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Lessons for leaders of both genders

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Expectations ofleaders in crises

So what do people want from leaders in crisis situations?

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The limits of empathy

And what, relatively, was the least important attribute of a leader in a crisis? [GO ROUND THE ROOM TO GET VIEWS]Demonstrating empathy for those most affected comes last out of 11 leadership behaviours expected in a crisis, with only 28% including it in their top-5Germany (15%), France (20%), China (21%) and Italy (21%) place particularly light emphasis on the importance of an empathetic response

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Dialogue within reason

Providing consistent messages to all key audiences (29%) and allowing for a two-way dialogue with key audiences (30%) also score low relative to other behavioursThis does not mean that showing empathy and engaging consistently are not important far from itRather that they are relatively unimportant when compared with putting that empathy into actionIn other words, empathy without action can rapidly become warm words, while a concrete plan without empathy can look like heartless bureaucracyThis makes operationalising empathy matching words with deeds the key practical lesson for leaders and communicators when it comes to the data on crisis communications

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Visible planning is key

Well, Providing a clear and timely action plan to rectify the situation (particularly in South Africa) 26

Critical importance of defining the problem

defining the problem properly and committing to identifying real solutions (most notably in China and South Africa) and accepting an appropriate level of responsibility for the problem (again especially in China and South Africa) come out on top

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Earned, shared andowned trump paid

Let them look you in the eyes

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The way to be seen as trustworthy is to be trustworthy

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At your service ...

But in 2013 and 2014, we also saw product and service quality rise right up the agenda compared with 2012 with quality of products and services again coming in a very close 2nd, immediately followed by customer service and customer focusPerhaps suggesting that in an enduring recession, people want trustworthiness to be matched by value for quality and value for money in the products or services they by and the service they receiveAnd while you could argue that quality products and service are unsurprising tablestakes, these data remind us of the importance of thinking about the very different expectations of different audiences and tailoring communications approaches accordingly31

The rise of the title-less leader

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The rise of theLeadership eVangelist

Finally, this years study also unearthed the rise of the Leadership eVangelists A specific, vocal minority sub-set of consumers who have a disproportionate effect on commercial outcomes, they are those who four times a week or more do debate leadership on or offline, while also emphatically recommending, endorsing or criticising products, company or individual leaders to those they engage withCrucially, they are likely to be much more supportive from a purchasing perspective when impressed with leadership 58% bought more from companies showing good leadership in the past year vs. 37% of the general populationAnd much more actively negatively when unimpressed 66% boycotted companies showing poor leadership in the last year vs. 45% for the general population The are also more influenced than the general population by bloggers and social media commentators in making purchasing decisions based on leadership perceptions (23 % vs. 14 % respectively)They tend to be younger (55 percent are 18-45) male (54 percent globally), more educated and with more disposable income.They are values- rather than value-driven and are particularly prevalent in countries where the mobile device has taken hold at a faster pace such as Brazil (15 percent of global Leadership eVangelists) and India (11 percent)In short they are the friends and family of the web the vocal minority, hiding in plain sight and influencing the silent majority, with the power to affect company policies and how corporations treat consumers.33

The West putting up leadership walls

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The Good Leader Formula

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So, what next?

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Opportunity from crisis

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Corporate communications specialists have long focused on managing or controlling a reputation. The truth is, the concept of controlling a reputation in a social media era is old fashioned at best if not unrealistic. We introduce a new philosophy of reputation communication that of asking for and gaining permission from a brands or organizations key publics or audiences.38

There is universal truth that we have to accept and that is that businesses serve at the pleasure of the people. When brands lose sight of this foundational principle, they veer off course and wonder why their value propositions, their product launches, there positioning, their issues management dont get heard. Their messages dont penetrate.

Such a simple truth, but so ridiculously difficult for our industry to grasp: because, to be frank, this perspective is NOT native to us. Put simply: our default has always been to view the world from our clients' perspectives first. And in the days of old when there were only 3 major television networks that worked.

But this truth requires that we always view the world from the people's perspective first and foremost. And obviously, there's a big difference between the two

Because if you're viewing the world from the people's perspective first, when a company comes to you and tells you that there's not another message, or blog post, or press release they can put out to the world to get people to pay attention and care your response should be something like this: a) that there's a reason why the people are not connecting to you; and that b) you are almost certainly not coming at them from your authentic (and allowable) place.

But who are the people? For too long, reputation work has focused on very narrow definitions of audiences whose behaviors have an impact on the business a vote, a sale, a stock. And though this is traditional marketing that works in a transaction/sale, it is not the way to look at reputation or issues management in a world where ecosystems of audiences interact and impact each other. They talk about a brand. They complain about a brands actions. They champion certain leaders. And all this affects the reputation of a brand or organization.

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ONCE UPON A TIMEThere were working EurosMarketing and sales who communicated with a very targeted audience to improve salesIn more consumer circles, we might say these are the people marketing to the Skinny Jeans

And then there were non working EurosThe crisis/issues, regulatory and corporate communications departments who communicated with influencers to prevent and avoid negative coverage/ conversationsWe sometimes call these people the suits

Traditional, working dollars were managed in one way often by marketing experts. They are focused 100% on increasing sales and creating emotional connections with target consumers/buyers. And then there have been non working dollars for things like public affairs, issues management and even CSR these dollars are used to mitigate issues and create insurance policies for broad reputation acceptance. These two disciplines rarely met or coordinated their actions and communications a huge mistake today where your ecosystem of audiences intersect, blend and share information.40

WHAT IS CAUSING THESE WORLDS TO COLLIDE?The eVangelistshiding in plain site41

And in the middle of the concept is an audience we call the eVangelists. A group of people who often sit between working dollars and non-working dollars. They arent always the target customer. And they arent always the issues target of a legislator or high level influencer. But they are watching and talking and they begin to influence both ends of the spectrum41

eVANGELISTS INFLUENCE: SUITS TO SKINNY JEANSeVangelistsExperiences and Conversations42suitsskinny jeansTraditional advertisingConsumer brand marketingEntertainment/Sports partnershipsDigital and social mediaShared contentExperiential marketingSales supportSpecial eventsGovernment/public affairsCrisis communicationsIssues managementLegal affairsLabor relationsCommunity affairsCorporate communicationsSustainability/CSREmployee communications

This chart shows how they sit between the traditional suits and the skinny jeans. Telling their friends and family what to buy, what to think and how to feel about a brand or an issues. And reaching out to influencers to change policy, impact their community.42

{Permission Please}

And all this leads us to conclude that we live in a world where organizations need to make sure they have the permission to say what they say and do what they do. Do your audiences believe you? Are you sure you have the runway for that initiative? Does your value proposition connect or actually create cynicism and skepticism?

Remember our core premise: Businesses Serve at the Pleasure of the People.

What that means is that in effect people give businesses the right to exist no people equals no business!43

ISNT IT ALL ABOUT TRANSPARENCY?Table stakeYou can be transparent that doesnt mean people will like you or your toneYour definition of truth and transparency may be verydifferent from your publics its your job to find the difference!44

Many organizations manage an issue or even reputation with facts and define transparency as sharing the facts. The reality is that in todays world, this definition of transparency will often fail. It is a basic table stake that is expected. REAL TRANSPARENCY IS ANSWERING THE QUESTIONS PEOPLE ARE REALLY ASKING NOT TELLING PEOPLE WHAT YOU WANT THEM TO HEAR.44

DOES YOUR VALUE PROPOSITION STILL COUNT?Only if you have permission.Seeing yourself through your stakeholders eyes45

The key is understanding how all your audiences look at you and how they feel about you. And understanding the reality of their lives and how they see the world. What is in their hearts. How is your reality incorporated into their lives and their narratives? And how do they influence each other?45

LIFE WITHOUT PERMISSION

NO RELEVANCY OR TRUE ENGAGEMENT:No one pays attention to another press release, study, white paper, tweet, picture, video They wont hear you

A SITTING DUCK:For agenda-driven personalities and activistsNimble v. Frozen

If you dont have permission no fact sheet, messaging, value proposition, tweet, blog or campaign will penetrate. And you may set yourself up for attack because you just dont understand what your audiences see, live and say.

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47BUT SALES ARE UP!!!

But you may say that sales are up, especially in a quarter to quarter world. But that doesnt mean reputation issues arent lurking with longer term effect. Sales are critical for sure, but they dont measure long-term value and reputation. Here are some examples to consider.47

48Photo from eater.com

This is an example of a brand with a lot of permission that just went too far. The world just wouldnt accept the concept of having discussions about race over their morning coffee. The backlash came fast and furious and Starbucks was forced to end the dialogue.48

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Are you ready for the age of reputation by permission? Ketchum is here to help. It is really meant just to be an ending and a simple call to action.49

50WHEN YOU EMBRACE THE SHIFT risk? or opportunity?

But when you embrace the concept of reputation by permission, you can change conversation, reputations and issues. 50

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UNDERSTANDING YOUR REPUTATION The Hierarchy of Permission and Leadership52

Mission Driven Advocate & Leader

Masterbrand with a Permissible Leadership POV

Branded House

House of Brands with Individual Purposes

Products & Services Focused Only

It is important during this process that you understand where you are and where you want to be on the hierarchy of permission and leadership, especially if you a multi-national brand with a diversified portfolio of products or services.52

53HOW MUCH PERMISSION Does Your Brand Have?

How do you know if your organization has permission to say what you want to say or to be what you say you are?53

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Ketchum has a simple three step process to figure it out. First, in a workshop/meeting we will focus on steps 1 and 2. In step one, we determine what portion of reputation work is important to you: value proposition, product attribute, issues response. You have to be able to clearly articulate what you are asking permission for. Then, in step two, we map your entire audience ecosystems and how each audience relates to each other and audit what they are saying about your reputation. The third step is using research to test what permission your entire industry, your competitors and you have in this topic and evaluate the gap (if one exists) to chart a communications program for success.54

KETCHUM ETHOS You gain permission when you:Say what youll do and do what you sayAre prudent in expectation-setting avoid say-do gapsConvey a commitment to your audiences definition of true transparencyRecognize and admit past mistakesDemonstrate continuous improvement Foster collaboration, bringing out the best in othersCelebrate employees as your most powerful advocatesDeliver leadership at every levelShow a genuine willingness to listen and learnAre mindful of the eVangelists

In all of Ketchums work in reputation, we look at these key factors. Our proprietary Ketchum Leadership Communication Research (KLCM) and our experience tell us that these filters can make or break reputation programming.

These KLCM-driven filters provide an almost perfect gut-check on any Reputation by Permission assessment and platform that we derive. 55

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CLEAR DEFINITION OF END STATE

EXPLAIN & INSPIRE

CHANGE AS A CONSTANT

WHAT CHANGE WAS

CHANGE AS AN EVENT

CLEAR DEFINITION OF END STATE

EXPLAIN & GET BUY-IN

WHAT CHANGE IS

CHANGE AS A CONSTANT

FLUID

ENGAGE & ENABLE

FOUNTAIN COMMUNICATION

CASCADE MODEL

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SOLID STATELIQUID STATEGASEOUS STATE

Not AdaptableReadily AdaptableFlippantly AdaptableConstant change driven by authentic opportunityConstantly changing without directionVery linear/ structuredSame core, different shapeNo shape or consistency

Imprisoned by processes and culture15

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Decisions, decisions

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Corporation ReputationBrand ReputationMonologue DialogueCommunication LeadershipConsumer SentimentInvestors and RegulatorsIssuesCultureInternalExternal Long-termImmediatePaid, EarnedShared, OwnedOffenceDefenceRisk Opportunity

From Leadership Crisis to Permission

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Leadership lessons from a dancing guy

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So, how are you feeling?

How? By accepting anew leadership model which demands a values-driven approach to corporate and leadership behaviour, and a complete alignment of action and communicationA model driven by leaders who are clear and open in their communication (who say what they do); lead by example (who do what they say); and who admit mistakes (who acknowledge what theyve done)A confirmation, as I said, of the Good Leader Formula: Credible Leadership = Open Communication + Decisive Action + Personal Presence.Against this backdrop, leaders and those who advise them must infuse this ethos in everything they do, driven by the key principles required by a new, more feminine leadership communication archetype, namely: Leaders actions, not just their words, show what the organisation values; Transparency is non-negotiable. Provide it voluntarily and build trust, or it will be imposed on you; Admit mistakes, solve problems, move forward; Chart a visible course for continuously making the future better;Collaborate and bring others to the table to solve problems; Treat your employees as you would like your brand or organisation to be treated; and The Leadership eVangelists are real treat them with respect and they will do the same.If we as a profession can seize this nettle and help those we work with to do so, we might just get somewhere in starting to turn round the crisis of leadership unambiguously and repeatedly highlighted by three years of KLCM research

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#35Rod Cartwright+44 207 611 3744rod.cartwright@ketchum.com@RodCartwright

www.ketchum.com/2015-leadership-communication-monitor

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From Leadership Crisis to a New Era of Permission:Practical Lessons from the Ketchum Leadership Communication Monitor

A Presentation by Rod Cartwright, Global Partner, KetchumRiga,13th May 2016