National RepTrak® Results 2016
Germany
Carsten Wegmann, Director, Reputation Institute May 11, 2016
1 Reputation Institute is The Gold Standard in Reputation Management
Reputation Institute is the world’s leading reputation-based research advisory firm, founded by Dr. Charles Fombrun and Dr. Cees van Riel in 1997.
Reputation Institute’s RepTrak® Research is the worlds largest and highest quality normative reputation Our measurement tool is the RepTrak® model designed and benchmark database. validated by academia to analyzing the reputa ons of companies across industries, geographies and stakeholders. We answer three fundamental questions for our clients: RepTrak® quan fies the business impact of corporate – What is our reputation? communica on ac vi es. – How does it compare? – How do we improve our reputation? We are best known for the Forbes-published Global RepTrak® 100, the world’s largest study of corporate reputa ons.
2 RI serves a network that includes hundreds of multinational firms
3 The company behind the products matters more: Enterprise drives 60% of support
60% 40% >
ENTERPRISE PRODUCT SUPPORTIVE BEHAVIORS RECOMMEND COMPANY ● SAY SOMETHING POSITIVE ● GIVE THE BENEFIT OF DOUBT ● TRUST TO DO THE RIGHT THING ● BUY PRODUCTS ● INVEST ● WORK FOR COMPANY ● WELCOME TO THE NEIGHBOURHOOD ● RECOMMEND PRODUCTS ● RECOMMEND AS AN INVESTMENT 4 Why measure reputation? The success of your company depends on getting people to support you
Reputation is an emotional connection… …that ensures
• Customers buy your products
• People recommend you
• The financial community invest in you
• The media report favorably on your company
• Employees align with your corporate strategy
• Policymakers and regulators give you a license to operate
5 RepTrak® is a registered trademark of Reputation Institute. Copyright © 2016 Reputation Institute. All rights reserved. The rational dimensions tell you where to focus your efforts
• Product/Services: offers high quality products and services -- it offers excellent products and reliable services
• Innovation: is an innovative company -- it makes or sells innovative products or innovates in the way it does business
• Workplace: is an appealing place to work -- it treats its employees well
• Governance: is a responsibly-run company -- it behaves ethically and is open & transparent in its business dealings
• Citizenship: is a good corporate citizen -- it supports good causes & protects the environment
• Leadership: is a company with strong leadership -- it has visible leaders & is managed effectively
• Performance: is a high-performance company -- it delivers good financial results
6 The RepTrak® model summary
The RepTrak® System measures a company’s A company that delivers on ability to deliver on stakeholder expectations on expectations in the 7 domains will the 7 key rational dimensions of Reputation earn support from its stakeholders
PRODUCTS & PURCHASE SERVICES
INNOVATION RECOMMEND
WORKPLACE CRISIS PROOF GOVERNANCE VERBAL SUPPORT CITIZENSHIP
LEADERSHIP INVEST
PERFORMANCE WORK
REPUTATION REPUTATION SUPPORTIVE DIMENSIONS (PULSE) BEHAVIORS
7 The supportive behavior that aligns with strength of reputation
Companies with excellent or strong reputations get significantly more stakeholder support
Poor 0-39
8 National RepTrak ® Germany 2016 The 30 published companies
List of companies Germany [Sorted alphabetically] Adidas Deuts c he Börs e K+S Allianz Deuts c he Luf thans a Linde BASF Deuts c he Pos t DHL Mer c k KGaA Ge rm any Bayer Deuts c he Telekom Munic h Re RepTrak® Puls e Beiersdorf E.ON RWE average BMW Fresenius Medical Care SAP 70,5 Commerz bank Fresenius SE Siemens n= 3.816 Continental HeidelbergCement ThyssenKrupp Daimler Henkel Volkswagen Deuts c he Bank Infineon Technologies Vonovia
9 Industry ranking Industry rank Germany Germany 0 20 40 60 80 100 Consumer Products (35) 76,3 n = 4.662 Computer (13) 74,3 n = 1.682 Airlines & Aerospace (8) 74,2 n = 1.013 Electrical & Electronics (20) 73,6 n = 2.467 Financial - Diversified (4) 72,5 n = 519 Food - Manufacturing (16) 72,5 n = 1.915 Beverage (17) 72,4 n = 1.997 Retail - General (13) 72,4 n = 1.581 Automotive (24) 72,2 n = 2.986 Pharmaceuticals (21) 71,0 n = 2.465 Retail - Food (7) 70,3 n = 811 Industrial Products (11) 70,2 n = 1.281 Financial - Insurance (4) 70,0 n = 418 Information & Media (7) 69,4 n = 874 Chemicals (7) 69,1 n = 756 Energy (4) 66,1 n = 671 Telecommunications (4) 63,9 n = 443 Transport & Logistics (5) 63,8 n = 579 Financial - Bank (10) 63,2 n = 1.159
Total n= 28.279 10 RepTrak® Pulse Germany 2016
RepTrak® Pulse Ex c ellent/Top tier 80+ Germany 2016 Strong/Robust 70-79 Average/Moderate 60-69 Weak/Vulnerable 40-59 100 Poor /Low es t tier <40 90 80,9 80,0 79,8 79,3 79,3 77,5 76,8 76,0 75,5 74,0 80 73,7 73,1 73,0 72,9 72,0 72,0 70,8 70,2 70,0 69,5 68,1 65,7 65,1
70 63,9 61,8 61,1 61,1 58,9 58,9
60 54,2 50 40 30 20 10 0 K+S SAP RWE BMW E.ON Linde BASF Bayer Allianz Adidas Henkel Daimler Vonovia Siemens Beiersdorf MunichRe Continental Volkswagen Merck KGaA Merck FreseniusSE ThyssenKrupp Commerzbank DeutscheBank DeutscheBörse HeidelbergCement DeutscheTelekom DeutscheDHLPost DeutscheLufthansa Infineon TechnologiesInfineon FreseniusCare Medical
n = 3.816 11 RepTrak® Pulse development Pulse ranking (1/2)
RepTrak® Pulse development Germany 2015- [sorted by 2016] 2015 2016 2016 1 Daimler 78,5 80,9 Highest score 2016 80,9 2 Adidas 77,7 80,0 Daimler 3 Siemens 76,9 79,8 2,9 4 Henkel 75,4 79,3 4,0 5 BMW 85,4 79,3 -6,1 6 Fresenius SE 72,5 77,5 5,0 Lowest score 2016 54,2 7 Deutsche Lufthansa 76,8 76,8 Deutsche Bank 8 HeidelbergCement 72,3 76,0 3,7 9 SAP 68,8 75,5 6,7 10 Bayer 68,9 74,0 5,1 11 Beiersdorf 67,8 73,7 6,0 Biggest climb 2016 6,7 12 Linde 73,4 73,1 SAP 13 ThyssenKrupp 68,1 73,0 4,9 14 Continental 73,1 72,9 15 Munich Re 68,8 72,0 3,3 16 Fresenius Medical Care 74,4 72,0 Biggest fall 2016 -21,7 17 Merck KGaA 74,6 70,8 -3,8 Volkswagen 18 Deutsche Post DHL 67,5 70,2 19 BASF 69,6 70,0 20 Allianz 66,4 69,5 3,2 n = 2.080 2.287
12 RepTrak® Pulse development Pulse ranking (2/2)
RepTrak® Pulse development Germany 2015- [sorted by 2016] 2015 2016 2016 21 Infineon Technologies 70,0 68,1 22 RWE 64,9 65,7 23 K+S 69,8 65,1 -4,7 24 Deutsche Börse 64,2 63,9 25 E.ON 62,5 61,8 26 Vonovia - 61,1 27 Commerzbank 57,1 61,1 4,0 28 Volkswagen 80,6 58,9 -21,7 29 Deutsche Telekom 60,1 58,9 30 Deutsche Bank 54,8 54,2 n = 1.314 1.529
13 RepTrak® Pulse development Pulse ranking
RepTrak® Pulse development Germany [sorted by 2016] 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 1 Daimler 76,2 77,8 76,1 78,5 80,9 26 Vonovia - - - - 61,1 2 Adidas 76,8 81,0 78,4 77,7 80,0 27 Commerzbank 52,3 53,6 55,2 57,1 61,1 3 Siemens 76,8 79,1 77,8 76,9 79,8 28 Volkswagen 78,0 83,9 81,8 80,6 58,9 4 Henkel 75,2 77,1 75,5 75,4 79,3 29 Deutsche Telekom 55,3 54,2 62,4 60,1 58,9 5 BMW 79,9 81,0 78,8 85,4 79,3 30 Deutsche Bank 54,7 48,2 51,1 54,8 54,2 6 Fresenius SE 74,7 73,8 75,8 72,5 77,5 7 Deutsche Lufthansa 76,2 77,7 79,9 76,8 76,8 8 HeidelbergCement 68,2 71,3 69,9 72,3 76,0 9 SAP 73,8 73,4 76,9 68,8 75,5 10 Bayer 65,6 71,8 69,0 68,9 74,0 11 Beiersdorf 72,4 75,1 70,6 67,8 73,7 12 Linde 72,8 72,4 74,3 73,4 73,1 13 ThyssenKrupp 71,8 67,3 67,6 68,1 73,0 14 Continental 74,1 73,5 77,6 73,1 72,9 15 Munich Re 63,4 71,7 70,0 68,8 72,0 16 Fresenius Medical Care 74,8 76,2 70,5 74,4 72,0 17 Merck KGaA 64,7 71,3 73,2 74,6 70,8 18 Deutsche Post DHL 62,9 71,7 70,7 67,5 70,2 19 BASF 69,5 71,3 69,5 69,6 70,0 20 Allianz 62,9 57,6 63,9 66,4 69,5 21 Infineon Technologies 64,4 58,7 65,4 70,0 68,1 22 RWE 54,8 57,1 58,4 64,9 65,7 23 K+S 67,5 70,5 70,9 69,8 65,1 24 Deutsche Börse 58,6 64,4 65,8 64,2 63,9 25 E.ON 53,7 50,4 56,0 62,5 61,8 n = 4.025 2.518 3.923 2.975 3.255 n = 499 405 507 419 560 14 Germany drivers 2016 and development Dimension drivers Germany Dimension drivers 22 Germany 2016 20
18 Products & Services Governance 12,9% 17,1% 16 Citizenship 14 Workplace Innovation Leadership 12 Performance 12,9% 13,0% 10
8
14,2% 13,1% 2012 2013 2014 2015 2016 Products & Services 17,4 17,8 17,1 17,8 17,1 16,8% Innovation 13,7 13,3 13,4 12,8 13,0 Workplace 13,8 13,6 14,3 14,5 13,1 Governance 15,1 15,9 15,5 16,4 16,8 Citizenship 14,5 14,2 13,8 13,7 14,2 Leadership 12,4 12,0 12,3 12,3 12,9 n = 3.000 Performance 13,1 13,2 13,6 12,5 12,9 2 Adj. R = 0,695 n = 6.084 3.000 2.999 3.000 3.000 Adj. R2 = 0,723 0,696 0,723 0,666 0,695
15 Dimension distribution Germany
Dimension distribution Q1 2016 Germany [by dimension order] Negative (1-2) Neutral (3-5) Positive (6-7) "Not sure %" Score Products & Services 6% 44% 42% 8% 73,9 Innovation 6% 46% 37% 11% 71,9 Workplace 6% 42% 32% 20% 71,1 Governance 9% 47% 28% 16% 67,3 Citizenship 8% 43% 27% 22% 67,2 Leadership 6% 44% 33% 17% 71,2 Performance 5% 44% 36% 15% 72,8
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% n = 3.816
16 Germany dimension ranking Products/Services, Innovation
Germany dimension top 10
Products & Services Innovation
Daimler 83,9 BMW 82,7
Siemens 83,3 Siemens 82,0
BMW 83,0 Daimler 81,2
Henkel 81,7 SAP 81,0
Adidas 81,0 Fresenius SE 78,8
SAP 80,2 Adidas 78,3
Fresenius SE 80,1 Bayer 77,8
HeidelbergCement 79,2 Merck KGaA 77,3
Deutsche Lufthansa 78,4 Henkel 77,1
ThyssenKrupp 78,4 HeidelbergCement 76,6
n = 1.204 n = 1.199
17 Germany dimension ranking Workplace, Governance, Citizenship
Germany dimension top 10
Workplace Governance Citizenship
BMW 81,0 BMW 78,3 BMW 77,3
Daimler 80,9 Fresenius SE 78,0 Adidas 76,2
SAP 79,7 HeidelbergCement 75,8 Fresenius SE 75,7
Fresenius SE 77,9 Henkel 74,7 Daimler 75,6
Henkel 77,3 SAP 73,7 Siemens 74,7
Fresenius Medical Care 77,0 Daimler 73,6 Henkel 73,1
Siemens 76,6 Siemens 73,3 Fresenius Medical Care 72,4
HeidelbergCement 75,4 ThyssenKrupp 72,5 Bayer 72,3
Adidas 75,1 Fresenius Medical Care 72,2 HeidelbergCement 72,2
Merck KGaA 74,1 Adidas 71,3 ThyssenKrupp 72,1
n = 1.178 n = 1.179 n = 1.177
18 Germany dimension ranking Leadership, Performance
Germany dimension top 10
Leadership Performance
Daimler 82,5 BMW 82,5
BMW 82,4 Adidas 81,8
SAP 79,3 Daimler 81,5
Fresenius SE 78,5 SAP 81,3
Siemens 77,7 Siemens 79,4
Bayer 76,7 Bayer 79,0
ThyssenKrupp 76,6 Fresenius SE 78,7
Adidas 76,5 Henkel 78,4
HeidelbergCement 75,4 Merck KGaA 77,2
Fresenius Medical Care 75,3 Beiersdorf 77,0
n = 1.199 n = 1.202
19 Support for the most and least reputable companies in Germany
The most reputable companies vs. least reputable companies Supportive behavior distribution Negative (1-2) Neutral (3-5) Positive (6-7) Not sure Count The 3 most reputable companies 7% 2% n = 388 Buy 39% 53% The 3 least reputable companies 24% 41% 29% 6% n = 348
The 3 most reputable companies 5% 2% n = 388 Recommend products 41% 52% The 3 least reputable companies 25% 41% 28% 6% n = 348
The 3 most reputable companies 6% 4% n = 388 Trust to do the right thing 43% 47% The 3 least reputable companies 25% 44% 26% 5% n = 348
The 3 most reputable companies 6% 4% n = 388 Recommend company to others 38% 53% The 3 least reputable companies 26% 43% 26% 5% n = 348
The 3 most reputable companies 6% 2% n = 388 Say something positive 38% 53% The 3 least reputable companies 23% 47% 24% 6% n = 348
The 3 most reputable companies 16% 12% n = 388 Invest 37% 35% The 3 least reputable companies 37% 36% 19% 9% n = 348
The 3 most reputable companies 12% 11% n = 388 Recommend as investment 41% 37% The 3 least reputable companies 30% 43% 16% 10% n = 348
The 3 most reputable companies 11% 7% n = 388 Work for 34% 48% The 3 least reputable companies 26% 37% 29% 9% n = 348
The 3 most reputable companies 12% 43% 36% 9% n = 388 Benefit of the doubt The 3 least reputable companies 31% 38% 21% 10% n = 348
The 3 most reputable companies 8% 39% 48% 5% n = 388 Welcome into my community The 3 least reputable companies 20% 43% 30% 7% n = 348
20 0% 20% 40% 60% 80% 100% RepTrak® Pulse vs. Recommend company (%) in Germany If a company improves its reputation by 5 points, the number of people who would recommend it, goes up by 6,2%
60%
55% BMW
Daimler 50% Henkel
45% Bayer Continental
40% Fresenius SE
35%
30% Deuts c he Telekom Fresenius Medical Care
25%
E.ON Commerz bank 20%
Deuts c he Bank 15% Willingness to support (Recommend company Willingness box) to to (Recommend others support Top-two Adj. R² = 0,759 10% 50 55 60 65 70 75 80 85 RepTrak® Pulse Score 21 Reputation Institute surveyed 150+ global executives in corporate communications with brand and reputation responsibilities to gather insights on today’s trends, practices and priorities. We interviewed people in companies revenue-sized $1-30 billion, based in 20 countries across Europe, US/Canada, Central, Latin America. The interviews were completed Q4 2015 – Q1 2016.
22 BEST PRACTICE
What are the challenges companies are facing in stakeholder management?
Lack of a structured process for integrating reputation management into our business 46%
Lack of internal knowledge, training and engagement within the organization 41%
Lack of cross-functional collaboration between corporate communications, and branding / marketing departments 26%
Inability to effectively measure and benchmark stakeholder perceptions 25%
Lack of employee engagement 19%
C-Suite buy-in: CEO and other top executives are not fully supportive of reputation management 17%
Lack of a compelling business case 13%
0% 20% 40% 60% 80%
% who strongly agree with statement
Source: Reputation Institute 2016 Global RLS Study 23
BEST PRACTICE
Who manages reputa on inside companies
Overall US Europe Latin America The Corp. Communications 87% 98% department takes a leading role Corporate Communications/Public Affairs 81% 90% in reputation management • 87% of companies has the 62% 60% Corporate Branding responsibility with Corporate 58% 80% Communication / Public Affairs
50% 40% CEO's Office The bigger the company, the 45% 80% cha< more involved Corp. Communications is in the 30% 23% Marketing 26% reputation management: 45% • Less than $1 billion - 76%
29% • $1-5 billion - 86% 23% Corporate Strategy 33% • $6-29 billion - 90% 25% • $30 billion or more - 97% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% who strongly agree with statement
Source: Reputation Institute 2016 Global RLS Study 24
BEST PRACTICE
The percentage of the Corporate Communications budget How are companies prioritizing their budget that is dedicated to reputation management initiatives
• Less than $1 billion <5%= 55% 5%-10%= 18% 11%-20%=9% 19% • $1-5 billion <5%= 45% 11%-20%=14% >30%= 12% Not sure 36% • $6-29 billion Not sure=29% <5%=19% 5%-10%= 15%
Less than • $30 billion or more 13% 5% <5%=26% Not sure=24% >30%= 23% More than 30% Differences across regions:
21% - • Europe 30% 8% <5%= 37% Not sure=22% 5%-10%= 20% 11% - 5% - 10% 20% • US / Canada 9% 15% <5%= 28% >30%= 20% 11%-20%=15%
Less than 5% 5%-10% 11%-20% 21%-30% More than 30% Not sure • Central / Latin America <5%= 45% >30%= 20% Not sure=20% Source: Reputation Institute 2016 Global RLS Study 25
BEST PRACTICE
Successful corporate communica ons and reputa on execu ves are mul -faceted strategists involved in many areas of the business – too many? Are they the right ones?
Business ac vi es reputa on execu ves are most frequently involved in:
Corporate narrative 77%
Crisis management 67%
Reputation risk assessment 64%
CEO's reputation 63%
Corporate branding strategies 60%
Issues management 57%
Public affairs 51%
Corporate social responsibility strategy 51%
Sustainability programs 49%
Employee empowerment 37%
Business positioning 36%
Setting the strategy agenda 31%
Marketing strategies 31%
Product/ service branding strategies 29%
Business strategies 23%
Business performance 21%
Board decisions 19% % very involved Source: Reputation Institute 2016 Global RLS Study 26
BEST PRACTICE
Where must your company make progress over the next 12 months to improve its reputa on?
Overall US Europe Latin America
60% 60% Communicating: Articulating a cross-stakeholder, cross-market company narrative 58% 70%
52% 52% Measuring our reputation across key stakeholders 56% 30%
44% Managing reputational risk: improving our ability to effectively manage reputational 38% crises 42% 40%
43% Corporate Social Responsibility (CSR): Improving our reputation for CSR and 43% sustainability 39% 50%
39% Knowledge: Improving our organizational competency in reputation management/ 48% corporate communications 28% 45%
35% Business case for reputation management; including quantifying Return on Investment 45% (ROI) of specific initiatives 32% 20%
10% 20% 30% 40% 50% 60% 70% 80%
Source: Reputation Institute 2016 Global RLS Study 27 % who strongly agree with statement BEST PRACTICE What mechanisms are in place to ensure the company’s purpose and values are clearly and consistently demonstrated in how it acts and does business?
Overall Latin America Europe USA
49% 65% Proactively communicating externally on company's core values 49% 50% 54% 65% Company marketing materials and corporate communications reflect its core values/vision 47% 60% 41% 50% Internal processes and controls set up to ensure employee adherence to core values 40% 55% 47% 60% Core values emphasized in recruitment materials/ activities 40% 67% 42% 55% Training provided to employees on company's core values 33% 57% 63% 55% Internal policies and codes of conduct developed to articulate company's core values 63% 83% 41% 50% Personal performance metrics tied to core values 32% 60% 35% 45% Corporate performance metrics tied to core values 26% 43% 59% 65% Consistent commitment and reiteration of core value by senior leadership 51% 76%
Source: Reputation Institute 2016 Global RLS Study 28
BEST PRACTICE
Cross-stakeholder measurement and communica ons are at the top-of-mind for global reputa on execu ves
Strong/Excellent reputation companies have Average reputation companies are set the foundation of measurement in place and still working on developing the are now focusing their efforts on cross- business case and finding the best stakeholder communication, CSR and managing approach to measuring their reputation risks. reputation.
Areas of focus in corporate reputa on management over the next 12 months Strong/Excellent reputation Average reputation
Communicating: Articulating a cross-stakeholder, cross-market company 54% narrative 62%
27% Measuring our reputation across key stakeholders 62%
Managing reputational risk: improving our ability to effectively manage 42% reputational crises 35% Biggest gaps between Corporate Social Responsibility (CSR): improving our reputation for CSR and 42% Strong/ Excellent and sustainability 54% Average
Knowledge: improving our organizational competency in reputation 23% management/ corporate communications 38%
Business case for reputation management; including quantifying Return on 19% Investment (ROI) of specific initiatives 42%
0% 20% 40% 60% 80% 100%
Source: Reputation Institute 2016 Global RLS Study % who strongly agree with statement 29
BEST PRACTICE
Reputa on scores are becoming widely used in measuring the effec veness of corporate communica ons and reputa on management ini a ves
• Most companies have some measurements in place to assess their reputation among their most important stakeholders, however only 37% of all companies do it comprehensively/ to a great extent. 77%
• 73% of companies in the study use reputation scores either “somewhat” or of respondents “to a great extent”, to evaluate the effectiveness of corporate communications consider and reputation management initiatives. company’s Stakeholder Priori za on financial results Customers 88% among the Employees 83% Regulators/government officials 77% metrics reflecting Investors and shareholders 73% its corporate Opinion leaders 53% General public 49% reputation. Industry professionals 44% Supply chain partners 43%
NGOs/ advocacy groups 35%
% rating as very important
Source: Reputation Institute 2016 Global RLS Study 30
BEST PRACTICE CSR areas of focus in strategy and communica ons
of companies in the study report current investment/ budget for How does your 67% improving communication with stakeholders around CSR/ company communicate sustainability performance and initiatives. its performance in CSR/ sustainability? Current budgets for CSR and sustainability • CSR performance mentioned in our Annual Report – 71% Charitable contributions/ philanthropy 71%
Health and safety 69% • Dedicated annual CSR Report – 63% Environmental sustainability 68% • CSR performance is mentioned in Improving CSR/ sustainability related communications 67% corporate-level communications
Community development 67% (press releases, statements, executive interviews, etc.) – 61% Responsible governance 61% • Dedicated CSR focused Responsible/ ethical/ sustainable supply chain 59% communications (press releases, Workplace conditions/ labor rights 57% interviews, etc.) – 59%
Economic development 49% • Public stance/position communicated on social or Human rights 29% environmental issues pertinent to Social justice 27% stakeholders, please specify - 13%
% of respondents reporting current budget Source: Reputation Institute 2016 Global RLS Study 31
SUMMARY
What is global Best Practice for the Corporate Communications Team to build MORE FAVORABLE stakeholder support worldwide?
• Managing a company narrative that shifts supportive behavior in line with the company’s strategy • Leading a structured, company-wide process that captures stakeholder views and measures progress against targets • Taking a fact-driven approach to contribute to the corporate agenda with business guidance beyond ‘the spokesperson’
32