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Managing Corporate Reputation in the Era of Consumer Generated Media “It takes 20 years to build a reputation and five minutes to ruin it. If you think.

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Presentation on theme: "Managing Corporate Reputation in the Era of Consumer Generated Media “It takes 20 years to build a reputation and five minutes to ruin it. If you think."— Presentation transcript:

1 Managing Corporate Reputation in the Era of Consumer Generated Media “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” ~ Warren Buffett Presented by: Jason Voiovich Ecra Creative Group 651.209.2778 or jason@ecracreative.comjason@ecracreative.com

2 Buffett couldn’t be more right… Collapse of Bear Stearns Best Buy’s “Peep Squad” Microsoft Vista revolt Starbucks’ coffee ranked below McDonald’s

3 Poll: Your View of Reputation How do you view “reputation” in the business context? (select the option that best describes your view) [1] Primarily a business risk to be avoided [2] Primarily a business asset to be leveraged

4 Why is Reputation Important? Reputation management (or the failure thereof) presents tangible downside risk. However, proper reputation management - at the same time - presents significant upside opportunity.

5 The Illusion of Control The real conundrum? Corporate reputation is, largely, out of management’s direct control. Blogosphere & Insta-Pundits Blackberry, iPhone, and Email 24-hour News Cycle

6 The Real Problem: The World Changed Years ago, PR professionals learned the source/receiver model:

7 The Real Problem: The World Changed The 1990s saw the wide dissemination of the feedback loop:

8 The Real Problem: The World Changed The reality is now clear: Reputation is created - in large part - due to interaction between people and groups.

9 Problems with the PR Model Why are most public relations departments failing to protect reputation assets? They are “marketing-centric”: There are too many people now involved. They are too slow: They just can’t keep up They are not seen as authentic: We really do live in a ‘Spin Zone’

10 A New Model is Needed A new model for reputation management must account for three basic truths: 1. Reputation is in the hands of all stakeholders, not only management 2. Reputation changes quickly - it is fundamentally unpredictable 3. Reputation follows a non-linear model

11 Poll: What percentage of plastic water bottles are recycled? More than 80 percent 20 to 80 percent communities with special facilities Less than 20 percent

12 Case Study: The Plastic Water Bottle We’ll explore the transformation of the water bottle from “health symbol” to “eco-disaster” using three key techniques: 1. Identifying and clustering stakeholders and issues into meaningful groups 2. Managing change in reputation over time 3. Non-linear analysis methods

13 Market Overview Bottlers have reason for concern: $11 Billion US Market Average American consumed 28.3 gallons of bottled water last year (lots of room) 2nd most consumed beverage in the US (after soft drinks)

14 Step 1: Identification Establish a baseline for ongoing measurement and analysis Try to hit the “high points” (not leave anything out) Identify internal stakeholders, external stakeholders, and key issues Begin to “Cluster”

15 Stakeholder Identification Major Stakeholder Group Sub-Group Baseline RIF Nestle Coca-Cola PepsiCo Environmental Organizations US Government Waste Mgt/Recyclers Major Media Social Media Minor Corporate Players Petroleum Industry Health Organizations

16 Stakeholder Identification Major Stakeholder Group Sub-Group Baseline RIF NestleCorporate Communications Employees/Staff (14K in US) Corporate Marketing Bottling Plants Distributors/Fleet Executive Management Nestle Retailer Network Corporate Sales Purchasing Company Operations Legal

17 Stakeholder Identification Major Stakeholder Group Sub-Group Baseline RIF NestleCorporate Communications Media Relations Consumer Relations Reseller Relations Investor Relations Government Relations Employee Relations

18 Stakeholder Identification Major Stakeholder Group Sub-Group Baseline RIF Nestle6 Coca-Cola6 PepsiCo6 Environmental Organizations 5 US Government4 Waste Mgt/Recyclers7 Major Media4 Social Media6 Minor Corporate Players 2 Petroleum Industry2 Health Organizations3

19 Poll: Who have we left out? What major stakeholder(s) can you identify that have been “overlooked” in this chart? (choose all that apply) [ ] Water resource management [ ] General public opinion [ ] Sports organizations

20 Issue Identification Major Issue GroupSub-GroupBaseline RIF Environmental degradationBasic “littering”8 Landfill space Wildlife poisoning/harm Plastic “nodules” in the oceans Geologic timescale decomposition Misconception of bottles as non-recyclable 7 Use of petroleum in the process 4 New research on “unhealthy” plastic effects on health 2

21 Step 2: Tracking & Data Collection Deploy the data collection system to a wide group of internal and external stakeholders Integrate traditional and social media data inputs Track “emergent” stakeholders and issues Begin to see patterns of interconnection

22 Tracking & Data Collection Stakehold er Group Baseline RIF Adjusted RIF Tagged IssuesConn. Streng th Vector Waste Manageme nt/Recycler s 89 Nestle64.5 Social Media 78.5 Major Media 43.5 Health Organizati ons 36 Environme ntal Organizati on 57

23 Tracking & Data Collection Stakehold er Group Baseline RIF Adjusted RIF Tagged IssuesConn. Streng th Vector Waste Manageme nt/Recycler s 89Basic littering Landfill space Wildlife harm Ocean pollution Decomposition 7838178381 +1 +2 –3 –5 0 Nestle64.5 Social Media 78.5 Major Media 43.5 Health Organizati ons 36 Environme ntal Organizati on 57

24 Tracking & Data Collection Waste Management / Recyclers 9 Basic Littering 4.00 Decom- position 1.25 Ocean Pollution 4.25 Landfill Space 5.5 Wildlife Harm 6.25

25 Step 3: Non-Linear Analysis The nature of this data lend itself to chaotic analysis techniques Attempting to predict one event from a trend-line belies an underlying unpredictability in this type of complex system Key concepts from non-linear analysis can help us (even if the math eludes us)

26 Concept 1: Attractors We see this in “clustering” around issues in our initial identification New data points tend to cluster around existing issues during data collection Rule of 256 A “strange attractor” - one of the four non-linear attractors

27 Concept 2: Self-Similarity Self-similarity shows us a way to look at the “small picture” to spot larger trends. What are the small trends? Health effects of water bottles. A common mathematical example of self- similarity

28 Case Study: The Plastic Water Bottle In the end analysis, who has done well/poorly? Nestle’s “less-plastic” bottle Primo’s “corn” bottle

29 Advice for CI professionals Track and measure smarter, but understand its limits (allow MANY more people in the organization into the tracking process - collective wisdom works here) Sweat the small trends - help your clients understand this and plan for it (counter to "executive opinion") Set clear and simple rules (executive wisdom works here - creativity of a single "head"), let the rest self-organize throughout the organization (you can't "control" it; don't try - let people interpret the vision as they see it needs to - thinner plastic bottle)

30 Contact Information Jason Voiovich Principal Ecra Creative Group 651.209.2778 jason@ecracreative.com www.stateofthebrand.com Additional reading: Deep Simplicity, by John Gribbin, © 2004 Random House Complexity Explained, by Peter Erdi, © 2008 Springer


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