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The unifying theory of communications: Sustain us

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unifying theoryWhen less is simply less 

Look at Earth, hanging in space, alone in darkness. After you’re done admiring the beauty of what you see, you can’t help but think, on some level:

Will we be able to sustain such a hurtling jewel?

What if we looked at communications in that context?

Sometimes communications are used in less-than-best practice.

Infographics are great. They convey information quickly. They’re on everybody’s lips.

But infographics can mislead. When infographics are over-tasked with carrying the thrust of a message alone, they fail.

Communications is about integration: a unification of channels. It’s about sustaining brilliance, about sustaining best practice.

Shaping a story

Some creatives can do graphics with great impact and shape a great story. It depends on the strategy behind the message. Infographics are brilliant tools, but success is in how infographics are used.

Words have built empires. There is no escaping our need for information. As we move into any subject, we want deeper information.

We live in a world where our communications race forward into space. Connectivity. Speed. Data blasting forward. It’s all tough to process.

Infographics are everywhere. They provide snapshots of almost anything you can imagine. Done well, they are useful, but …

How deep are some really?

The shallow end: Don’t use audiences when using data

Go out and search. You will doubtless find an infographic on what you’re looking for. Now, look for the source.

Where did the information come from?

Some infographics don’t reference where the research for the data comes from. They tell a story, but if the story’s fiction, consider its value.

Organizations have objectives. If data and infographics are used to mislead, you risk credibility.

In our race to process information, to relay information, to demonstrate concepts to people more easily, more accessibly, without demanding too much of the beleaguered audience or public, we sometimes forget to look into where the research for the data comes from.

Who did the research? If we don’t know … Are we setting up our audience, and so, ourselves for disappointment?

In these days of content curation, we still have to be conscious of where data comes from, and its interpretation. That can be difficult. Speed is of the essence.

Even the research process itself has come under repeated analysis. There have been a number of papers criticizing peer review. Often, the conclusion is, peer review may be imperfect, but it’s still the best thing we’ve got.

Questions, questions: Ask some questions

At the very least, we should ask questions about what research seems to demonstrate. We live in a time of rapid change.

Since Einstein, and beyond, we’ve learned that things are relative. We may like slow cooking, but we still have priorities related to “getting things done”. In a historical context, Einstein did pretty well without all the technology we have at our disposal today.

Take research on phones. As one of the largest manufacturers of phones used to advise us: Think different. A recent study suggested a few things about different phone manufacturers. One idea was that the wealthy / intelligent buy a certain model of phone.

What’s being suggested here? That the phone makes you wealthy or intelligent?

Let’s ask some questions: What types of phones are we talking about? Does one brand sell a greater variety of phones across a broader spectrum within a broader price range? (For example, if wealth determines intelligence, then obviously Warren Buffett and Bill Gates are smarter than Steve Jobs was.)

Which company focuses on the high-end? If a product costs more, it doesn’t take Einstein to figure out that the wealthy might buy that product.

Sheep or deep?

Questions can start to reveal bias or data manipulation. There’s a difference between interpretation and distortion of data. Insights have to be as deep as the data.

None of us are perfect, but If we use data with less-than-best-practice, doesn’t it reflect our opinion of our target audience? Our publics?

Is there an element of danger in such a strategy? How do people feel when there’s a massive pullback in a company’s stock? When IPOs and exchanges are held up as parlayers of bad practice?

Researching media reports after such errors in judgement – more often labelled as “debacles” in the media – provide clear evidence. No management team wants to see its name lit up in a reputational example of bad practice.

Need more evidence? Take a look at questions asked about the U.S. government’s reputation following the Merkel phone-tapping.

The complications involved in communicating, and various organizational debacles, are bound to affect brand and reputation. Do consumers want to know we’re burying poor references to our brands in cyberspace, or, that:

  • We’re addressing issues from stakeholders
  • Opening a channel of dialogue
  • Working hard to improve our organizations

and,

  • Willing to listen to feedback that provides insight?

Daniel Libeskind and David Chipperfield discuss why architecture is collaborative and is a form of communication. Any new building is bound to cause controversy like any great new idea. The discussion is the thing.

Flip the agenda on its head

Some believe that in a world where our communications burn across media at a faster and faster pace, the potential for backlash is vastly accelerated. But isn’t it important to consider that people are also getting more discerning? Aren’t people looking for something to believe in?

Aren’t we building a form of architecture when we reach out to talk to publics and audiences? Aren’t we better off building a foundation that lasts?

Isn’t there opportunity here? And if you’re not involved in the discussion, not seated at the table, digitally, with your publics, then, who is?

If you’re not dealing with stakeholders’ trust issues, then who is?

Won’t integrity stand out?

Peter Lynch and Warren Buffett have been cited for discussing how a company’s focus on how to spend its money (read: not spending outlandish amounts on offices, furniture, etc.) shows a competitive edge in these companies, especially for the shareholder. Does this frugality on the part of management mean that the managements of these companies aren’t intelligent?

Warren Buffett still lives in a modest house. Is he less intelligent for doing this?

Meanwhile, some companies spend a great deal on their employees including training and R&D to help stimulate creativity, engagement and innovation.

Is there more than one way to get to an outcome? In fact, is the construction of outcomes liquid? In constant flux?

A river flows out to the sea, but the way the water gets to the sea is epic. It’s a story of flow, of perpetual change. It’s the story of nature’s architecture.

A discerning audience is able to deconstruct what it sees. New York has taken steps to protect consumers from fake reviews. Is it really sound to imagine that there are no customers that have ever considered that these kinds of bad practices are going on?

Smart competitors will create smart campaigns centred around companies’ branding. Clever advertising is full of examples of a brand’s position being reframed – even if you’re reframing the idea that consumers of that brand are “creative”.

If an infographic misleads, does it take your audience where you want to go ultimately?

Information in infographics absent best practice, can mislead. What can it do to a brand?

Data can be used in a self-perpetuating, self-aggrandizing way to rationalize, what? That a product makes us look smarter? Makes us superior to others because we spend more on it?

Publics are going to change as fast as the media that bombard them. Appealing to customers will be an act of ultimate creativity. Some will do it brilliantly. Others are going to be remembered for compromising their ethics.

Customers, more than ever, want organizations that walk the talk.

Even if an organization mounts a comeback related to a major stumble, followed by negative media coverage, wouldn’t it have been better to follow a sustainable path of best practice in the first place? Wouldn’t it have been better not to suffer the reputational damage – to have more consistent growth?

Isn’t this why business schools hold ethics classes? Why reputation and trust factor large in polls? Why the Warren Buffetts of the world focus on the long-term rather than the short-term?

Are we telling stakeholders that all of this is mere lip service? Do we want to build our communications architecture like a house of cards?

Consider smartphone advertising, public relations and marketing. Just this sector is full of (depending on your opinion and metrics) winners, winners who became losers, organizational wrestling with public perception of privacy issues, the rapid pace of technological change, intense competition, shrinking margins, hype, hubris and successes that are hard to maintain.

Looking for a bullet-proof suit? It exists in best practice. The structure that sustains is the structure than can be built on.

Privacy, hacktivists and change giving birth to change

What of privacy? How much are people willing to give away? With social media, many of us are more visible, willingly, but there’s still constant debate about what amount of social media exposure is healthy. We do that regarding television, and electronics generally, too.

Hacktivists seem to be playing a major role in our public perception of networks, our personal, societal and corporate treatment of information.

Doubtless, security plays in the minds of our publics even as they increasingly give more of their information away. Security issues could impact dramatically on collaboration and information exchange, but innovation depends on such exchange.

Multiple security issues can change perception about services. New perceptions create new realities.

Many in the media and related professions and organizations are trying to appeal to their audiences. We could go on and on asking questions: The pace of change is making us move from what we are, are becoming and will be. It’s a never-ending cycle of change.

Change begets change.

Audiences and publics are undergoing ferocious transformation, and they will undergo all manner of metamorphoses as they absorb their new universes.

The portals are everywhere

In our hands. In our pockets. On our desks.

Portals. Everywhere.

Our world has become worlds. Some of us are spending as much time in virtual worlds as in real ones. Since the advent of screens and all their permutations, we’ve gained new devices offering  portable portals.

Some won’t care. Others will constantly jump on the “new”, but the reality is, sustainability of anything, idea, product, service, depends on growth. But what kind of growth?

Integration and ethics: The song that remains, sustains

Infographics work best in an integrated communications plan. They are a great tool when used wisely. Today, the way you reach out has to have a long-term focus. There may be short-term tactics, but they have to rationalize with a long-term vision. Content is everywhere, so, creators of content need to work together to move mountains.

Eventually, you have to bring people somewhere where they access deep, meaningful research or information. While short pieces are the rage for grabbing views, leading audiences to deep information increases credibility. That, in itself, is the message.

Fluff eventually blows away. Substance is permanent. A well-built foundation upholds a structure.

Unethical manipulation of public trust, of audiences, can only end badly. Look at the U.S. and world stock markets as an example. It’s only this year that retail investors have come back.  If people hold great and enduring mistrust against the stock markets, what will the impact be on innovation, societal development and wealth creation?

The great thing about asking questions is it can help you formulate long-term strategy. In a world where you want to be aware of weaknesses and threats against your organization, your society on a small and large scale, you have to focus on ways to create opportunity that resonate for the long-term. (This should be in our DNA. It’s the double helix of a virtual spiral.)

We’ve all heard pop songs that are one-hit wonders, but there are some songs that sustain us, and in turn, we sustain them.  Quality endures. We make sure of it.

In a world of change, where there are so many one-hit wonders, songs that remain sustain.

Image source: Flickr/Ted Kendell

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N.B.: When it comes to integrated communications, here are three excellent key messages:

canada digital in sync

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This work and all work on this blog is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

Images: Flickr, Daily Dividend.

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The hydra upon you: Hype and its dangers for public relations and marketing

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Today’s post is a continuation of Silos, silly season, social.

The many-headed hydra and key messages

If you believe in dialogue, if you believe in the multiple digital channels that can help convey key messages, then you know the potential for communications. Still, there’s been so much noise during the iPhone 5 announcement, you might wonder why the heavens haven’t opened up and why we aren’t being visited by angels of innovation blessing all things with an “i” before them.

Never mind that sales are being reported as a disappointment.

In the post-Facebook IPO era, best practices, truth and open communication should be reinforced as the way to communicate. Sustainability as a strategy looms large.

Hype is a many-headed hydra. When all the hydra’s heads are talking at once, which one will consumers believe? What are the key messages? Is it just confusion?

Do target audiences believe they have a part in the conversation, or is it just the heads of the hydra talking to themselves?

Just as I’m writing this, a connection of mine, Mark D’Cunha posted this on LinkedIn:

Ears that do not listen to advice, accompany the head when it is chopped off.

— African proverb

Media is a wonderful creator, but what it creates, it can take away.

Satire and blowback:

Reputational damage is best avoided in the first place

When people start satirizing a brand en masse, what does it say about a brand’s future business potential?

Some outcomes are beyond even the most careful planners’ control.

The blowback from the Facebook IPO resulted in a ton of reputational damage, left many who talked about Facebook’s short-term growth potential looking a little ridiculous while reinforcing the long-term thinking of those who understand what P/E ratio means.

Companies have bottom lines. Attenion has to be paid to profitability.

Still, attention also has to be paid to whether a brand can wear out its welcome. How much is too much?

informal
Definition of hype

noun

[mass noun]

  • extravagant or intensive publicity or promotion: his first album hit the stores amid a storm of hype
  • [count noun] a deception carried out for the sake of publicity: is his comeback a hype?

verb

[with object]

  • promote or publicize (a product or idea) intensively, often exaggerating its benefits: an industry quick to hype its products they were hyping up a new anti-poverty idea

Origin:

1920s (originally US in the sense ‘short-change, cheat’, or ‘person who cheats etc.’): of unknown origin

Credit: Oxford online dictionary

IPO gaga and the misvaluations from Mars

If you’ve followed what’s happened to the Facebook brand since IPO, you’ve more than a clue about what could happen in a less-than-best-practices environment. From a risk mitigation point of view, when the crowd’s gone gaga, there’s definitely potential but also a proportionate increase in exposure.

What happens with Facebook is still unwritten. What’s sure is that amidst the feeding frenzy of negative news post-IPO, there were also stories working hard to portray potential, still. If public relations around the Facebook IPO had been conducted differently, less energy would’ve had to be directed toward rehabilitating the Facebook brand.

Facebook isn’t the first nor will it be the last to suffer from its own success. When hype goes out-of-control, it ceases to be good public relations, good marketing. Because target audiences are left with the feeling of being had.

This is sort of like a salesperson thinking of her potential clients as “marks”. Maybe the naming of things creates destiny. Clients are people.

Growth: The greatest investment the world ever knew was the investment in you

Audiences are made up of individuals. When they get together, they have awesome power. It doesn’t matter if they’re internal or external.

If you invest in treating people like smart human beings, they’ll invest in you.

I’ll be continuing posts on Silos, silly season and social. I’d like to share them with you.

Heavy is the crown: Is Apple its own worst enemy?

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Reputational blowback?: Apple’s litigation strategy affects its own brand and reputation

Samsung brand on the upswing

Polling by YouGov shows that Samsung has already recovered from the recent Apple v. Samsung verdict. Actually, Samsung’s “buzz score” rating has surpassed Apple’s.

Sustainability and reputation issues are dogging Apple.  Many took to Facebook and Twitter to fling abuse at the company, some saying that the brand had become everything it had once stood against.

Have you “heard anything about the brand in the last two weeks, through advertising, news or by word of mouth,” asked YouGov. The company then assigned a score depending on responses positive or negative.

YouGov’s charts are clear evidence that Samsung’s brand has risen and Apple’s has fallen.

It’s hard to gauge what effect this will have long-term, especially considering the momentum Apple has behind it, but it’s clear that its brand has taken a beating. In an August 28th post, Siri, What’s “sustainability”?, I asked questions about Apple’s strategy: Specifically, that they don’t seem to be speaking to the broader audience that now is focused, like a laser, on Apple.

On September 6th, Forbes wrote about Apple’s dive suggesting Apple’s secret talks with Google might have been strongly motivated by the reputational blowback from Apple v. Samsung, which is looking more and more like a strategic mistake.

Clearly, Apple’s campaign of aggressive litigation added to consumer’s concerns: Not to mention the sustainability of their supply chain. But is Apple listening?

Is the pattern of immense hype (hype that may have slipped out of their control) generated by Apple in the media going to increase the volume of blowback? Is Apple at or close to its zenith in profitability, or, from an investor’s point of view, the ascendency of its stock price?

Credit: Forbes

“Apple has turned into the exact product they were against in the 1984 Super Bowl Ad.”

— Twitter user

Meet the new boss. More litigious than the old boss?

Sentiment against Apple was overwhelmingly negative post-verdict. Some have seen this coming for a long time. The hype is so extreme right now as the iPhone 5 is released that it’s impossible to know what the fallout from Apple’s own self-induced reputational damage will be.

Tech consumers change their minds in what looks to a long-term investor the blink-of-an-eye. The media, while generating an immense amount of hype is also giving birth to stories that portray Apple as Goliath, a big bully, unfeeling, unthinking and a poor listener.

Apple has followed a pattern of knowing it’s right when it comes to business strategy. So far, that strategy’s worked very well, but what leadership should consider is gravity.

The weight

The gravitas of investor and consumer sentiment accumulates and acts like a social David. And we all remember what David did to Goliath. In fact, didn’t Apple base its marketing strategy on being the “little guy” taking on Goliath?

Now, David pulls back his digital sling of zeroes and ones. Take a look at how Apple’s been trending on Google+, (at the time of writing).

There’s also the fact that it looks like both HTC and Samsung will sue Apple over LTE and try to block the iPhone 5. He who lives to litigate dies by litigation?

Meanwhile, HBR points out that Google’s spending on R&D, despite what many may think, dwarfs Apple’s as a percentage of revenue. Perhaps Apple’s just giving the people what they want: Perception of innovation over actual percentage of dollars spent on innovation.

If word-of-mouth is the greatest form of marketing, the social cybersphere is talking loudly, it’s consumer-generated (though more research is needed on these consumers), and it seems to be sounding off against what it perceives to be a heavy distortion field placed over the marketplace. Perception is reality.

Regardless, satirizing Apple has become a popular sport. When will their be an app for that?

If the new standard for the anti-Apple forces is: “Innovate don’t litigate”, then Apple in pursuing an aggressive strategy of litigation may have undone some of the reputational capital it’s worked years to build. Heavy is the crown.

But also, heavy is the hype. Apple may be going down a different yet parallel road that Facebook knows all-to-well. There’s a fine line between exceptional marketing and public relations and creating the Frankenstein monster.

Still, there’s a lot of momentum for Apple. But we’ve learned that out-of-control hype can be a double-edged sword. We’ve also learned that when stock performance doesn’t meet the enormity of expectation the decline can be huge.

Facebook’s decline of 50 per cent was pretty much as large as that of BP. And Facebook didn’t leak any oil.

Still, Apple has concrete numbers.

Does Apple Marketing and Public Relations feel ecstatic about a brand that convinces people old is new (see Jimmy Kimmel)? Does this soaring rocket of hype escape Earth’s atmosphere or like Facebook fall back held by the force of gravity?

Maybe the question is simply:

Is Apple its own worst enemy?

Jimmy Kimmel Confirms People Love the New iPhone 5, Even Though They’re Being Pranked With an iPhone 4S

Apple releases iNothing  – Video

Siri, What’s “sustainability”?

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“Man is the creator of change in this world.” — Steve Jobs

How will Apple speak to its growing audiences, sustainability issues and public perception?

Just sustain it

Define “change”.

Admit it.

Sometimes, you just scan the headlines, right? And they impact on you, right?

Take a look at this one:

Siri, Do You Use Slaves?

Would you want this headline related to your product? Even if you are the biggest company in the world by market cap — or maybe, especially because you are.

Heinrich’s headline (it’s a link) made very clever use of John Stewart and The Daily Show. As Apple’s market cap has grown, so has the target placed on its brand.

And why not? Didn’t Apple make its marketing focus Microsoft (the market cap leader at the time) for years? When you become the biggest company by market cap in history right now (see below article), you have to expect this.

(By the way, The Daily Show’s taken on Apple before.)

Heinrich understood how to reframe Apple advertising well. She used a guerrilla headline to attract attention to her cause.

Expanding. Digital. Universe. There are a lot of target audiences out there.

Apple’s stepped away from greening its brand. It’s supply chain has been held up as wanting.

It doesn’t matter if Apple’s competitors are using the same supply chain (some aren’t and others are paying a lot more attention to sustainability issues.) As concerns over its closed system, sustainability, patents, etc., increase regarding the Apple brand, it’s likely we’ll see more media stories, more anti-Apple posts, challenging, satirizing or taking a negative position on Apple.

Right now, it’s hype season. The iPhone 5’s coming out. Biggest market cap in history a few days ago — ok, so that wasn’t correct, but …

When you become the biggest corporation, you’d better consider the competitive threats. Big market cap means big target audiences. Audiences have opinions.

Remember BP? Remember “Beyond Petroleum”?

When BP CEO Tony Hayward began massive cost-cutting at BP, it’s focus on sustainability went out the window. What happened in 2010 with the Deepwater Horizon Oil Spill will go down in history as one of the greatest of environmental disasters.

The disaster is now synonymous with the BP brand and a 50 per cent drop in stock price. It could have been avoided with proper risk mitigation. Sustainability leads to risk mitigation.

While Apple doesn’t face the same obvious dangers to its business that the oil industry does, it’s decision-making processes regarding sustainability may be moving in the same direction as BP. They’ve both spent a lot of time and resources in court.

Is innovation better done in the lab or in court?

Above image sent out on Twitter in response to Apple v. Samsung

iPhones have supply chain and waste issues, don’t they?

The big time: Siri, What’s “market cap”?

Audiences have opinions. Apple worked a philosophy that countered Microsoft’s, but Apple’s history isn’t going to fade away. It’s going to be subverted and used against the Apple brand. Apple doesn’t exist in a vacuum.

It’s made the big time.

Apple is awash in cash. It’s sheer size makes the company’s margins and business seem unsustainable. Doesn’t it make sense that Apple would move more toward sustainability? That it would want to improve its image from a sustainability/CSR perspective?

Isn’t that what leaders do?

Or do they litigate endlessly?

Sent by user on Twitter under #boycottApple

How does such litigation reflect on brand?

Apple has almost $117 billion in cash. Exactly the reason why people like John Stewart are taking on Apple. It’s not the “little guy”.

It’s a behemoth.

Like it or not, when you’re the biggest company in the world, stakeholders expect accountability. They expect a leader. Not just in innovation. Not just the “cool” of the product you’re creating.

But a leader in best practices, too. Across the board.

And “browning” your brand isn’t that cool. Especially when you spend cash litigating aggressively.

Stakeholders want what’s open and honest.

While Apple v. Samsung wasn’t related to Apple’s de-greening, it shows how aggressive audiences embrace issues and attack a brand accusing it of “brandwashing”.

What of a company’s own employees?

… organizations should maintain their commitments to
customers, the environment, human rights and
communities or risk significant decreases in
employees’ perceptions of their organization’s CSR
commitment …

Leaders?

Business leaders ranked the top three benefits of investing in or pursuing socially and environmentally responsible
practices as follows:

  • Positive organizational reputation;
  • Higher or sustained employee engagement; and
  • Eliminate/reduce impact on the environment.

Does momentum last forever for the largest company by market cap? Not usually.

Global research conducted by Hewitt revealed that organizations with high engagement generated total shareholder returns that were 29% above average.

Above quotations from:

CSR as a Driver of Employee Engagement — Hewitt

As Costco CFO Richard Galanti has said about CSR:

It’s not about applying to the ‘beauty contest’.

Sure it’s about great products and profits, but it’s also about a corporate vision of a sustainable future — a sticky, feel-good sensation that stands for something beyond profit. It’s about who you are as a corporate citizen. About what your vision is for humankind.

After all, isn’t “man the creator of change in this world”?

With great power comes great responsibility.

— Stan Lee (creator of Spiderman)

Related articles and links

Brave new reputation: What CEOs need to know

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The new boss sings the stakeholder electric

Reputation is turning into a harder asset in the highly digitized corporate world we find ourselves in. This trend will only increase as technology rockets us forward.

Do you know where your reputation is?

Companies need to think of themselves through their stakeholders. Clients, customers, employees, the general public, shareholders, strategic alliances — just some of the important relationships in a world of informational digital milliseconds.

Just as corporations depend on consumers to buy their products, companies depend on customers to consume their brand.

After they’ve digested that brand, what do they feel, think and say?

In You’ve got to do something about your reputation: Why CEOs need to pay attention to reputation management, I looked at reputation.

Let’s dig deeper.

Fombrun, business leaders and reputation management

What are reputations worth?

Plenty.

Fombrun outlines three ways reputation adds value.

  • First, “reputation affects operating performance” resulting in increased profits
  • Second, “profitability affects market perceptions of the company’s future prospects – and so, increases demand for the company’s shares.”
  • Third, “the company’s operating activities … contribute to building ‘reputational capital’”

The shadow knows

In fact, the shadow consumes. In traditional and digital ways, it contains, or will contain, everything about an organization.

The perception of that information will depend, largely, on how a corporation prioritizes reputation, Corporate Social Responsibility (CSR), sustainability and related issues into its operational activities.

Fombrun says, “reputational capital” is a “shadow asset”, invisible but effective:

Intangible equity that humbly works behind the scenes in a company’s product brands or corporate brands — these days, often in zeroes and ones, expanding into the digital universe.

Bharawadj did a study of 125 manufacturing businesses. The study found “reputation and brand equity of the business … to be the best predictors of variation in business unit performance”.

Another study looked at a group of 435 companies rated in Fortune’s most admired companies. From 1984 to 1995, these organizations were better able “to sustain superior operating performance over time.” They were also better able “to improve operating performance over time.”

Bottom line? There are lessons to be learned from the financial crisis: Companies focused on sustainability outperformed peers by 15 per cent.

Fombrun provides substance for reputation building reputation. In effect, reputation gathers strength from itself.

So, the shadow is its own shadow asset.

Reputation. Stock price. Ownership.

In a study by Gregory on “brand power,” during extreme stock volatility from October 27-28, 1997, the research team discovered while all stocks fell on the 27th, the strongest brands regained almost all losses by the 28th.

A benign shadow supports brand

Less strong brands continued to founder. These brands did not have mighty reputations to deliver them from stock price purgatory.

While accountants feel operational activities like public relations, corporate philanthropy and advertising are best treated as direct business costs, Fombrun makes a thought-provoking point:

… it’s certainly ironic that accountants have been so conservative in their treatment of all reputation-building activities yet so willing to facilitate the capitalization of unearned income that enabled Enron, WorldCom and Xerox to claim inflated returns for so long …

In a post-Enron world, wise public relations practitioners and business leaders might note that brand-building and reputation-building sound concrete compared to the manufacturing of imaginary returns.

There is a difference between the invisible and the imaginary.

The financial value of reputation

Hanging a shadow on a signpost (or shadow valuation)

What if you could hang your company’s name out on a signpost and lease it?

Interbrand did just that. In 2002, at sales of $20 billion, assuming a higher royalty rate of 14 per cent (a royalty rate of 8-14 per cent of projected sales is common), Coca-Cola could realize a potential (royalty) rate on their brand of $2.4 billion.

Over 20 years, the Interbrand research team estimated this value of the Coke brand to be worth $69.9 billion.

Today, Coke is digital, social, focused on sowing reputational seeds in a new world of information.

Deep within its brand is everything stakeholders perceive Coke to be. Coke’s shadow delivers reputational capital.

If $70 billion doesn’t catch a CEO’s attention, what will? The shadow is changing rapidly. Move with the shadow or be outcast.

The figure isn’t perfect, but it reveals reputation has financial value despite its unseen nature.

Catch RQ during bull: The Shadow Quotient

Maybe the most valuable jewel in the cache of information Fombrun reveals is the development of the Reputation Quotient (RQ).

RQ focus groups revealed why people have high regard for some companies. They felt emotional appeal, products and services, financial performance, vision and leadership, workplace environment and social responsibility were the most important qualities affecting RQ.

Fombrun points out:

“Being well regarded is closely associated with a company’s earnings, liquidity, cash flow and growth — it’s operating results. Consumer ratings are therefore tied to familiar indicators that a company is well-managed.”

But being well-regarded pays off more in bull markets when the company’s stock price is on the rise than it does in bear markets when the opposite is true.

Companies gain when their stock price increases.

Spend some time with Fame and Fortune. Extrapolate Fombrun’s ideas to this new, digital paradigm. Demystify the unknown, difficult to measure, world of corporate reputation.

Reputation is in the cyber-ether. It permeates corporate space and the expanding online universe of stakeholder perception.

Any CEO who does not understand how reputation affects the bottom line, will, after reading Fombrun.

Business leaders and their companies will also benefit when they understand how to make exceptional reputations a reality in this brave new digital world.

Keystrokes? Swipes? Maybe simply gestures. Your brand and your repuation’s out there.

What is it saying?

When reality becomes perception

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Reputation and brand: Facebook strikes a blow — against itself

I blogged about social media and a potential backlash to use of private information in “Three digital considerations for the year(s) to come”.  In an interesting twist, “Facebookgate” is a signpost of what not to do on the road to establishing great reputational capital for companies. Not only is use of private information important but immoral tactics employed to “go negative” against competitors reveal the emperor as naked and scared.

Facebook was trying to expose Google for privacy issues through public relations firm Burson-Marsteller. Considering Facebook’s own past issues regarding users’ privacy concerns, the hypocrisy of this tactic is thick and hard to digest. Equally hard to digest is Burson-Marsteller’s use of tactics that have been described as “shadowy”. Burson-Marsteller’s former UK chairman says executives involved in the escapade acted like “backstreet spin merchants”.

Terence Fane-Saunders, ex of Burson-Marsteller UK, soundly criticised his old employer on his company blog, aptly titled:  “What on earth has happened to Burson-Marsteller?”

Obviously, grubby tactics  like those displayed in the Facebookgate case have done a lot of damage to the public relations industry in the past. Such tactics as those employed by Burson-Marsteller have led to the portrayal of public relations practitioners as hacks.

Amazing that such tactics still see the light of day. Facebook is now left with its brand highlighted in the media beside such less-than-brand-enhancing labels as “furtive”, “smear campaign” and “creepy” to list but a few. Not exactly words that most companies would revel in being associated with.

And, of course, every mention of Facebook adds mention of Burson-Marsteller’s involvement and bad public relations practices.

Companies would do well to pay attention to the fallout from such tactics. Perception may be more important than reality, but, in the case of Facebookgate, reality has had an enormous impact on perception. The problem is, in the Facebook case, reality was far worse than almost anybody perceived.

Video:

Blogger Soghoian speaks about Facebookgate

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