All posts in Reputation Management

  • ‘Post Truth’ and the Need for Reputation Resilience

    This is a blog post by Rupert Wright, Co-Chairman of Hemington Consulting.  Rupert is a former business editor who has has written for most of the world’s major newspapers including the Financial Times, Washington Post, The Times and Wall Street Journal. He was instrumental in the start-up of the National newspaper in Abu Dhabi in 2008 and is the former Chairman of Edelman Middle East.

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    Remember the stir during the US election campaign when it was reported that Donald Trump had said that if he ever ran for the presidency he would run as a Republican because “their supporters are so dumb?”

    Problem is, he never ever said such a thing.  It was fake news, but taken seriously.

    When I started out as a journalist more than 25 years ago, facts were sacred. Every story had to have at least two sources, and quotes were not to be tampered with.  Boris Johnson, then a trainee at The Times, was sacked because when asked where he had got a quote from, replied: “I made it up. I thought everybody did that.

    No, they didn’t.

    Newspaper offices had sub-editors and editors, some even had fact checkers, and everything that was printed had been seen by at least three different pairs of eyes. Then the Internet came along, and everyone became a journalist. And somewhere along the way, the truth became a casualty.

    Speed, opinion, and polemic were the new mantra, becoming more important than the truth. Alistair Campbell, Tony Blair’s press officer, was able to spread stories of Weapons of Mass Destruction, and as a result, a country was invaded and chaos ensued in the Middle East.

    It is no surprise that ‘post-truth’ has become the word of this year.  I prefer to call it as it is – innuendo, lies or outright nonsense.  Post truth is a rather generous euphemism.

    On the basis that any publicity is good publicity, the impact on a candidate of such ‘post-truth’ stories is probably limited. But the impact of negative publicity on the corporate world can be much more damaging.  One recalls Winston Churchill’s words “a lie is halfway around the world before the truth has got its trousers on.

    Just days after Donald Trump became president-elect, a spokesman for New Balance, a manufacturer of running shoes, said that things might be heading in “the right direction.”  Almost immediately social media was full of photos of New Balance shoes burning, sales crashed, and a white supremacist website called them “the official shoes of white people.”

    PepsiCo was also hit by fake news websites. Indra Nooyi, chief executive of PepsiCo, was reported as saying that Donald Trump’s supporters could “take their business elsewhere”. Problem is, she had said nothing of the sort.  Even so the damage was done.

    How does the corporate world guard against this sort of attack, something that is as damaging as a cyber attack?  Here are our five suggestions:

    1. Active digital monitoring. Across surface internet, social media, dark web, deep web, and public records. Keep a 24-hour watch on what is being said about your company, people, or brands.
    2. Establish active networks with friends and enemies in advance – engaging in person and on social media.
    3. Be ready to respond with vigour, even it means paying for Twitter and Facebook feeds.
    4. Have a clear and simple message. Think how effective ‘Make America Great Again’ was, even if it was copied directly from President Reagan
    5. Repeat the message as often as required.
    6. Stick to your area of competence, and avoid politics. Indra Nooyi was targeted because after the election result she said: “I had to answer a lot of questions from my daughters, from our employees. They were all in mourning. Our employees were all crying. The question that they are asking, especially those who are not white: ‘Are we safe?’ Women are asking ‘Are we safe?’ LGBT people are asking ‘Are we safe?'”

    On the Internet, nobody is safe.

    Everybody needs a reputation strategy to protect themselves, and to deal with the risk of attack.

    rw@hemingtonconsulting.co.uk

  • Apple Apology

    Apple CEO Tim Cook has issued a rare and full apology in response to accusations by Chinese state-controlled media of ‘arrogance’ and ‘greed’. The attacks related to Apple’s after sales policy of repairing not replacing defective products, unlike the rest of the world.

    Apple in China

    Apple in China

    Apple rarely apologises. (Last year’s apology by Tim Cook over the Apple Maps debacle was highly unusual for the company.)

    This time however the stakes may be even higher.

    China is Apple’s third biggest market, its fastest growing market, and Cook has said he expects China to replace North America as its largest source of revenue in the foreseeable future. Apple made sales of $6.8 billion in China in the last quarter of 2012.

    So, in a statement issued last week, Tim Cook said:

    “We recognize that we have much to learn about operating and communicating in China, but we want to assure everyone that we bring the same deep commitment and passion to China as we do to any other part of the world. This commitment, a desire to delight all of our customers and provide them with an extremely high-quality experience, is deeply rooted in the culture of our company. And we will not rest until we achieve this goal.”

    What is going on here?

    Firstly Apple products benefit from Chinese manufacturing – and the Chinese want their pound of flesh. Any sense that they are getting second best, from an iconic global brand such as Apple is not going to be acceptable.

    Secondly the speed and power of the Chinese state controlled media, carefully coordinated and unleashed with tremendous force is not to be underestimated. Near-daily media assaults over the period of a fortnight, and the threat of penalties from two Chinese government bureaus, left Apple reeling.

    Thirdly the impact of a brewing fight with the government was felt almost immediately as Apple’s largest active shareholder, Fidelity Contrafund, reduced its holding by 10pc. Apple shares lost 2pc in New York on the news and have fallen significantly this year.

    Foreign companies who are adept at managing reputations at home find it much tougher to navigate China where state media outlets often have opaque agendas and intentions.

    Tim Cook, unlike Steve Jobs who never set foot inside China, understands the region well, having been responsible for building Apple’s supply chain in Asia. So he knows a thing or two about how things operate there.

    Other brands have been targeted in a similar way over recent months – and include Yum Brands (KFC and Pizza Hut), Volkswagen, McDonalds and Carrefour. Hewlett-Packard was famously targeted in 2010 and apologised for faulty laptops.

    But…

    In a curious twist the attacks backfired almost as soon as they began.

    The attacks were mocked by increasingly sophisticated Chinese consumers who saw through what might appear a rather basic attempt at economic nationalism.

    Apple and its products command tremendous loyalty in China, as they do elsewhere in the world.

    And this furore has inadvertently revived complaints over shoddy service by Chinese companies, the very companies the government is presumably attempting to protect.

  • Distasteful Advertising

    Ford and WPP Group, together, find themselves in damage control mode.

    An Indian subsidiary of JWT, Ford’s advertising agency, released some (not very good) advertisements that depicted women tied up in the boot of a car driven by ex Italian Prime Minister Silvio Berlusconi.

    Ford Ad

    Ford Ad

    “We deeply regret the publishing of posters that were distasteful and contrary to the standards of professionalism and decency at JWT,” a company statement said.

    This was the result of individuals acting without proper oversight and appropriate actions have been taken within the agency where they work to deal with the situation,” WPP said.

    The perpetrators have now been fired, we learn.

    So what does this episode tell us?

    Staff and suppliers pose some of the biggest risks to hard won reputations – in this case the actions of a creative team within a subsidiary of one of Ford’s suppliers (one the world’s leading ad agencies).

    As brands encourage ever more public and staff generated content, the potential for inappropriate content associated with their brands will increase.

    In a well-disciplined organisation the risks posed by staff or supplier generated content can be mitigated but not prevented through management, culture, training and social media policies.

    In the case of user generated content it is almost impossible to control and even apparently benign campaigns can backfire (Why I Shop At Waitrose).

    Once an issue has erupted decisive action is required to identify, analyse, address, explain and repair any damage that may have been done.

    This is a particular challenge for those involved in the production of content. The core business of advertising agencies, TV companies, newspapers and magazines is to produce and distribute content, and particularly content that generates attention.

    Lessons?  Robust reputation risk planning is a must – with the people and processes in place to deal swiftly with an uproar that might occur.   Then again the most effective form of damage control is prevention.

  • Simplicity

    I’m reading Ken Segall’s insider account about working with Steve Jobs, Insanely Simple.

    It was recommended to me by a colleague and friend of Steve (Jobs), whom I found lurking at Babington House the other morning.

    The Secret to Apple Success

    The Secret to Apple Success

    This book is an inspiration to anybody who finds corporate technobabble and management speak a smoke screen for weak and woolly thinking.

    The premise is that Apple’s success under Jobs was due to:

    • Exceptionally high standards
    • Ruthless obsession with keeping things simple
    • Small focused teams, trusted to be creative and get on with the job
    • Eternal vigilance towards simplicity’s evil twin, complexity

    In a memorable visual metaphor Segall describes Steve wielding his ‘simplicity stick’ amongst colleagues.

    And refreshingly Segall doesn’t pull his punches laying into the failures of big corporations such as Dell, Microsoft and Intel, their internal divisions (literally), and their obsession with complexity.

    Apple is a big corporation that behaves like a start up and resists what it calls ‘big company behaviour’.

    Apple’s reputation is built on its ability to minimize, deliver beautiful, innovative products, designed for customers as people.

    Now you can digest some of the secrets of Apple’s success.  And perhaps sharpen your simplicity stick.

     

  • Huawei – actions louder than words

    China’s Huawei is now the world’s largest telecom maker, having overtaken Ericsson last year.  It is a $32-billion business with 140,000 employees, and customers in 140 countries. It has a reputation for delivering high-quality telecoms equipment at low prices.

    It is also believed – by some – to be a puppet of the Chinese military.

    Hidden dragon

    Hidden dragon

    Huawei’s founder Ren Zhengfei served as an engineer in the People’s Liberation Army (PLA).  And governments are highly anxious of the rapidly evolving cyber threat.

    The FT reports that Huawei now plans to disclose detailed financial and shareholding information in attempt to allay fears over suspected ties to the Chinese military which have hampered its global expansion.

    A report last August in The Economist described the efforts Huawei have gone to to convince the world of its peaceful intentions.  The fear is that the company is are building networks that allow eavesdropping during peacetime, and which could be shut down suddenly during wartime.

    Could the firm be another weapon within China’s cyber-arsenal?

    Intriguingly in the UK Huawei has established a unit run in close co-operation with GCHQ (Britain’s signals-intelligence agency) with security-cleared personnel, including former employees of GCHQ, to vet gear from China before it is installed.

    Which would seem to be a very tangible way to address some of the reputation issues that Huawei is facing.  Actions, after all, speak louder than words.