Reputation Management as Change Management

You may remember my post "Reputation is Built on Behavior" in which I argued that communications has very little to do with reputation, but the way an organization behaves does.

I just read an article on the MIT Sloan Management Review website in which Michael S. Hopkins interviews Marvin Odum, president of Shell Oil Co. The interview is to me very exciting, because it appears to be an excellent explanation of how an organization needs to manage itself to manage relationships with stakeholders (and I would say its reputation).

Among his points:

• The technical side of a proposal is only "half of the equation. The other half is about communities and stakeholders."
• He calls this a shift from organizations saying "Trust me. I'm going to do it the right way" to stakeholders demanding "'Show me and involve me. Make me part of this. I’m going to be part of these decisions going forward.'”
• He further notes that this "... changes everything. It changes the way we think as a company. It raises our performance. And it changes the timeline of these projects."
• Not anticipating "nontechnical" risks and opportunities adds time and, consequently, money to projects. Thus, anticipating them is good for the bottom line.

He goes on to say:

"If we can get our people thinking sufficiently from that point of view, not just working with stakeholders and listening to what they say but actually anticipating their needs, anticipating these 'nontechnical' risks and opportunities — and if we can get more people skilled in that way — then the more successful we’ll be, the shorter these project timelines will be, the more trust in Shell there will be."

Mr. Odum is talking about changing how people in the organization think about issues and how to manage them. This is change management. One of the concerns I shared about British Petroleum (BP) in the wake of the Gulf disaster (in the blog I mentioned above) was that aside from hand wringing and replacing the CEO, there were no signs that BP was doing anything to change a culture that has led to an absolutely dismal environmental record.

Mr. Odum also believes this approach leads to better performance:

"As you get better companywide at exploring, understanding and addressing those nontechnical risks, it drives innovation. Because mitigating those risks often drives you right back into the technology loop — back into asking how can you solve novel problems in novel ways, and how can you do it at affordable costs?"

Another point in the article I find to be genuinely thrilling, is Mr. Odum says Shell does scenario planning:

"We’ll look a half a century into the future, and we ask ourselves, 'Where is the world going to go?' We’re not looking to define a definitive answer; we’re looking to define the spread of options that the world has, that governments have, how priorities will change and how things will be implemented. And then we’re looking to understand how we would perform in each of those possible worlds. Then we bring it all the way back to today to see now what we need to do to drive toward being successful in that spread of potential outcomes."

That's what I call a solid approach to environmental management and a firm foundation for reputation management.

And getting more directly at the role communications plays in reputation management, Mr. Odum says:

"... the first thing that comes to my mind in that respect is the word “transparency.” The only way to approach the situation that we’re in is for a company like Shell to be a complete open book in terms of what we do, how we do it. And we have to be able to stand up to the criticism as well as reap the benefits that we get from being that transparent."

One key role communications can play in all of this is monitoring issues and anticipating the nontechnical risks and opportunities Mr. Odum cites by having a thorough understanding of stakeholder wants, needs and expectations.

While I've drawn some fairly long quotes from the article, there is in it much more of great value. I highly recommend you read it. That address again is: http://tinyurl.com/4lskbyn.

Links to CEO Survey and Interview on Irrational Behavior

My friend and colleague Liz Guthridge saw a couple of media pieces I thought you might find interesting:

• One is a survey of CEOs by IBM and talks about how CEOs are dealing with change and complexity.
• The other is an interview conducted by McKinsey with behavioral economist Dan Arieley, who cites examples of irrationality in the workplace and what leaders should do about this

How to Choose an Issue

A few days ago one of my colleagues suggested I do a blog on being sustainable, because it is a hot topic right now. I'm all for sustainability, recycling and being green. But is sustainability a good topic for me, as an independent message development and communications research consultant, to write about?

Issue Parameters
What are the right issues to align your employer or client with. As a general rule, it's a great idea to identify a hot topic and find ways to link your organization or client to that topic to get media coverage and create buzz. Get in front of the parade. But what if that topic has nothing to do with the messages you are trying to communicate to your stakeholders? What if your stakeholders don't care about the topic?

Ideally, the issues you associate your organization or your client's organization with should: 1. Be appropriate for that organization and its messages, and 2. Be something of interest to the stakeholders you are trying to reach.

If your company sells hand power tools and women's dietetic supplements is a hot topic, would it make sense to link your organization or its power tool products to women's dietetic supplements? Not unless women, who might be interested in these supplements, are one of the groups of people you are trying to sell your power tools to. But even if they are, I question how appropriate the topic is for a hand power tool manufacturer. An issue that might make more sense to get involved in could be Habitat for Humanity and building houses for people who need them because of disaster or poverty. This seems appropriate, because hand power tools are used to build things, and that's what Habitat for Humanity does. Does it appeal to the stakeholders our imaginary company wants to reach. We don't really know. However, when I checked the Habitat for Humanity International web site,it had a "Women Build" section encouraging women to take part. So, women may be a good target.

Identifying an Issue for a Major Computer Company
How could we find out if an issue is good for us? Some years ago, when I was SVP, director of research and account planning at Golin/Harris, I worked with a major computer company on a pilot community involvement program. The pilot program was to be in Indianapolis, Indiana, so we wanted to determine what issues the city was facing that might be appropriate for the computer company to help with. We went to the Indianapolis city library and read through local papers to come up with a list of pressing issues. Then we spoke with city leaders to identify what they thought were the most important issues they faced. Finally, as I recall, we spoke with members of a target audience our client was interested in reaching, owners of small companies that the client thought would grow and become bigger customers. We asked the owners of these companies which of the issues were most important to them personally as well as which seemed appropriate for our client to address.

All these sources of information converged to suggest education was a top issue for Indianapolis, important to the respondents with whom we had spoken and appropriate for the client to address. Fortunately, education already was a part of the client's philanthropic plan. Consequently, it was easy for the company to put in place in Indianapolis a program supporting education. I believe they did it through a "Computers in Schools" effort.

So this issue passed our test with flying colors. It was both appropriate to the computer company and important to its stakeholders. Unfortunately, I don't have any followup information on how successful that program was.

Identifying an Issue for a Bourbon Manufacturer
Another example, and one of my favorites, also comes from my time with Golin/Harris. We were pitching the maker of a bourbon. After reviewing data from the Simmons Market Research data base, it was clear there were two different groups of people who drank the brand. A group of lower-income, high-school educated blue-collar men and a group of mid- to upper-income college-educated white-collar men.

This was a dilemma, because, as with all programs, resources were limited, and we were faced with either focusing on one group or the other or communicating to both groups, but with fewer resources for each.

As a part of the pitch we did focus groups with both kinds of bourbon drinkers (some of whom were disappointed to learn they had not be recruited to do bourbon taste testing!). During one of the groups one respondent mentioned his interest in Duck's Unlimited, an organization that buys wetlands and grasslands to preserve for waterfowl breeding. When he did, a light bulb went off in our heads, because he had come upon the perfect issue or cause for us. From the Simmons data base, we knew our blue-collar men were interested in hunting and our white-collar men were interested in conservation. So Ducks Unlimited was the perfect bridge issue and cause for us to recommend to our prospect.

As it turned out, the prospect was already contributing to Ducks Unlimited, but they liked our thinking so well they hired us.

As communications practitioners, it is critical that we understand what trends and issues are current at any given time. But it is just as critical that we understand our clients and their stakeholders so we can make sound judgments on how to put them all together.

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I work with organizations that are going through a change in strategic direction (merger, acquisition, building program, new product launch, change program) and that are concerned about what will happen with their relationships with key stakeholders (customers, employees, investors) if they send out the wrong, or confusing, messages. After working with me they have a clear understanding of what their messages should be. I also provide them recommendations on other actions they can take to enhance their relationships with their stakeholders.

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The Institute for Public Relations (IPR) is dedicated to the "science beneath the art" of PR. It focuses on PR research and education. If you are interested in the topics I write about, you will almost certainly be interested in IPR. You can find it at http://www.instituteforpr.org/. While you're there, check out the Essential Knowledge Project at http://www.instituteforpr.org/essential_knowledge/.

Best wishes,

Forrest

Forrest W. Anderson
Founding Member
Institute for Public Relations
Commission on PR Measurement and Evaluation