new strategic_TP:Layout 1 12/9/07 11:11 Page 1 NEWSTRATEGIESFOR REPUTATION MANAGEMENT Gaining Control of Issues, Crises & Corporate Social Responsibility ANDREW GRIFFIN London and Philadelphia Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or the author. First published in Great Britain and the United States in 2008 by Kogan Page Limited. Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.kogan-page.co.uk © Andrew Griffin, 2008 The right of Andrew Griffin to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 5007 6 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Griffith, Andrew, 1972– New strategies for reputation management : gaining control of issues, crises and corporate social responsibility / Andrew Griffin. p. cm. Includes bibliographical references and index. ISBN 978-0-7494-5007-6 1. Corporate image– –Management. 2. Corporations– –Public relations. 3. Social responsibility of business. I. Title. HD59.2.G75 2007 659.2–dc22 2007032744 Typeset by JS Typesetting Ltd, Porthcawl, Mid Glamorgan Printed and bound in India by Replika Press Pvt Ltd For Roberto, Mum and Dad THIS PAGE INTENTIONALLY LEFT BLANK iv Contents Acknowledgements vii Introduction 1 1. Reputation management today 9 Reputation terminology 11 Reputation evaluation 12 Joined-up thinking? 16 Aspects of managing reputation risk 18 Reputation management: some company caricatures 25 Summary 28 2. The corporation under fire 31 The world is freer and smaller 34 It is a world of fear 36 It is a world of information 39 Individuals are empowered 48 NGOs are empowered 50 Governments remain powerful, whilst corporate power is waning 53 Tomorrow’s world 56 Summary 58 3. Regaining the reputation initiative 61 Changing the corporate mindset 64 vi Contents Putting reputation at the heart of the business 72 Redrawing the corporate stakeholder map and engagement plan 75 Summary 77 4. Crisis management – leadership in a tried and tested system 79 Crisis management – easy in theory 80 Crisis management is about substance, not spin 83 You’re not alone 89 Prepare your people as well as your process 92 Practice makes perfect 94 Leadership is the key differentiator 96 Crisis management – an action plan for change 106 5. Issues management – shaping the agenda 111 Issues management – difficult in theory 113 Categorizing and prioritizing issues 114 Issues management is as important as crisis management, but requires different skills and tools 117 Local issues can now have global consequences 120 Issues management is about agenda control 121 Global issues need (uncharacteristic) long-term thinking 127 6. Social responsibility – your initiatives on your initiative 137 What is CSR? 139 CSR is about business, but not controlled by business 140 CSR does not shield companies from reputation risk 144 CSR reports are a waste of time and trees 152 The concept of corporate citizenship is more helpful than that of CSR 154 Performance matters more 155 7. Turning the corner – the corporation on the couch 161 Notes from the psychologist’s couch 161 Follow change or make change? 162 Leading change in reputation management 163 Further reading and information 165 Index 169 Acknowledgements I would like to thank my colleague Jonathan Howie for his excellent research work. Thanks also to colleagues Nat Davies, Mark Hamilton and Marianna Panizza for research in the early stages. I am also grateful to my fellow Regester Larkin directors Tim Johnson and Eddie Bensilum for their helpful comments on the first draft. Finally, thanks to Mike Regester for all his advice and support on this project and for creating the environment in which it was possible. THIS PAGE INTENTIONALLY LEFT BLANK viii Introduction The workshop participants started to arrive at about 8.30 am. Half of them had their luggage with them, ready to head straight back to the airport after the day’s proceedings. As we waited for everyone to arrive, the talk over coffee was of jetlag, hotel facilities and return flight times. The accents were many and varied; the job titles on the collection of business cards I was amassing were impressive. Clearly, this was a workshop that the company was taking seriously. And so it should. This was a ‘reputation management strategy workshop’ and the company was a well-known global manufacturing company with a host of household brands to its name but a reputation that could be described, at best, as ‘mixed’. I had been asked to facilitate the workshop, and was told that the desired output was a draft reputation strategy and plan for the next 12 months. The agenda included crisis preparedness, issues management and the social responsibility agenda. The standard round-the-table introductions confirmed that the participants were senior representatives from operations, sales, human resources (HR), finance and legal services. And because the workshop was about ‘reputation’, the communications people had come mob-handed. After a little opening spiel, I kicked off the conversation proper by asking the participants to rank the following overall company objectives from one to five in order of importance: financial success; a good reputation; a happy workforce; satisfied customers and local licence to operate. All of them, except one (not the lawyer, in fact) rated ‘a good reputation’ as number one. 2 New strategies for reputation management What? A good reputation is more important than financial perform- ance? More important than the company’s legal licence to operate in its various markets? More important than satisfied customers? Apparently so, because they all looked fairly happy with themselves. This was, after all, a reputation workshop so ‘a good reputation’ was surely the right answer. Wasn’t it? We moved on, and I asked them what they saw as their top repu- tation objectives for the months ahead and, after a little discussion, the group decided that the top objective was ‘successful stakeholder engagement’. They obviously noticed an expression of some surprise on their facilitator’s face, and felt the need to explain this further: ‘We need to engage with our stakeholders’, said one of the oper- ations people, ‘to understand the external climate, protect our repu- tation and make better business decisions.’ ‘And who are these stakeholders?’ I asked. ‘As it happens’, said one of the more junior communications people round the table, ‘I have our stakeholder engagement list with me on my laptop. Our PR agency has just revised it, so it’s pretty up to date. Would you like to see it?’ On went the laptop and on went the projector. As the neat table started to appear faintly on the screen in front of us, we saw that five stakeholders were on the front page marked ‘Priority 1’: Greenpeace, Friends of the Earth, WWF, the UK Department of Trade and Industry and the US Department of Commerce. ‘So, do you intend to meet these stakeholders?’ ‘Perhaps. Although some we will just keep up to date with key developments and send them our CSR report.’ I had seen this CSR report just a few days before the workshop. It was colourful, earnest, honest and almost entirely about the company’s position on difficult issues and its response to perceived social problems. I summed up where we were so far: ‘So, you are saying that your reputation is more important than any other aspect of your business, including your financial performance and employee and customer satisfaction. You are saying that your primary objective for protecting and enhancing your reputation next year is successful stakeholder engagement. At the top of the list of these stakeholders you plan to engage are three huge international environmental lobby groups and two government departments. And one of the key tools you plan to use in this engagement is your CSR report, which focuses almost exclusively on what other people say about you.’ Introduction 3 There was a slightly uneasy silence and a bit of chair-shuffling. The workshop was clearly off to a flying start. After a little more discussion and a ‘coffee and BlackBerry break’, we moved from the general to the specific. First, we discussed crisis management. The company decided that it had a good crisis manage- ment system in place, and that it had been tested fairly recently at group level in a two-hour ‘desktop exercise’. However, it was agreed that there was no room for complacency and that the crisis manual should be updated and re-circulated to key staff every six months. I asked to see a copy of the crisis manual. Of the 11 senior people in attendance, only one had a copy of the company’s crisis manual with him and, oddly, it was someone from finance.