Posts Tagged ‘Reputation’

The Market State

November 17, 2010

Last year, corporate executives spent a lot of time talking about the problem of headwinds in a difficult economy.  They never talk about tailwinds in a good economy but that’s another story.  What they have talked about this year is “uncertainty” by which they apparently mean excessive government regulation brought on by the global fiscal crisis. A McKinsey white paper published earlier this year suggests that companies would be better off preparing for much more activist national governments and the challenges they will present than whining about uncertainty.  The authors of the study suggest that the challenge for sovereign states in dealing with slower economic growth while still providing affordable safety nets will entangle the private and public sectors in the future in ways that are unthinkable in today’s developed economies.

While there are clearly financial and operational implications of this shift, there are also reputational dangers and opportunities.  If McKinsey’s predictions are correct, the term corporate social responsibility may take on entirely new meanings.  U.S. companies have long bemoaned the emergence in the 1950s of employer-supported health benefits.  If the market state is truly the wave of the future, they may have seen nothing yet.


Learning from the Mob

April 13, 2010

The time has come to restrict all communications to face-to-face mumbling, preferably standing next to a waterfall and only during hurricane force winds.  It appears we have a thing or two to learn from the Mafia about protecting our communications.

Even the shallowest of dips into the subject of electronic privacy (its absence) is enough to shake us to the core.  When the question of what the government can or cannot access without telling you came up in recent conversation, we were stumped but suspected that there were new dangers  to our personal privacy of which we were unaware.  It was only a short step from there to consider what the government can and can’t find out about the activities and locations of our executives and other employees without asking permission.  What we discovered suggests that there are unforeseen reputational risks to electronic surveillance that have yet to be explored.

The Electronic Frontier Foundation (EFF) lays out the current state of play on a platform it calls The Surveillance Self-Defense Project .  The project not only makes a compelling case for routine legal encryption but also highlights the capriciousness of the government’s position on some key privacy issues as well as the arbitrary nature of privacy regulations governing different kinds of messaging and different carriers.

As we expected, the government has to comply with a rising level of disclosure and burden of proof as it seeks deeper content, but these vary in some strange ways.  The government’s interpretation of  The Stored Communications Act, according to EFF, for example, is that logs of searches on search engines have no protection at all.  Furthermore, even though the act offers strong protection to content “in electronic storage” the government has a curiously restricted notion of what that means.  Thus, again according to EFF, “The government doesn’t consider already-read or opened incoming communications to be in electronic storage (for example, emails in your inbox that you’ve already looked at, or voice mails in your voicemail account that you’ve saved after listening). Nor does the government consider messages in your sent box or messages in your drafts box to be in ‘electronic storage.'”

With the rising tide of GPS-enabled devices and platforms, concerns about location privacy and the rules governing it suggest that we should be undertaking a constant review of reputational threats presented by Internet-based technologies.  The satirical website Please Rob Me launched earlier this year made fun of those of us determined to let the world know by GPS when we weren’t home. The Surveillance Self-Defense Project suggests that we have many more issues to worry about.  Let’s meet by the fence next to Runway 4.

The Business of Business

February 23, 2010

Michael Skapinker’s column in today’s Financial Times reminds us of Samuel Johnson’s comment about the purpose of a corporation: “to help a gentlemen decide which debts he has to pay.”  Skapinker concludes by arguing that business needs to recover its core sense of purpose: not just to make profits or reward shareholders but to do things it and its employees can be proud of.  He quotes the chairman of Barclays, approvingly, as saying that banks need to “acknowledg(e) the mistakes they made.”

In our eyes, the disconnect between the average citizen and big business institutions goes far beyond the question of whether banks get it and no amount of press conferences and full page ads apologizing and promising a new dawn will restore the trust that has evaporated.  There is certainly plenty of room for corporate humility at the macro-level, but what will ultimately restore public trust has to happen at the micro-level.  An ordinary customer going into a bank  needs to feel like a customer not a drag on profitability.  The response to a call for clarification of mysterious cellphone charges needs to provide actual help not just data for the company’s customer satisfaction surveys.  The credit card company needs to want our business when we talk to them rather than filling our recycling bins every week.  An old saying in recruitment holds that to find out whether you should hire someone ask the receptionist how the  candidate treated them.  The same principle needs to be restored to the smallest of our daily transactions with customers.  This means giving front line employees the tools, the training and the permission to do the little things to make them proud of the company they work for.  Out of a million daily acts of real service by actual people come respect and trust.

Corporate Chauvinism

December 11, 2009

Much has been made of the trenchant language in Jeff Immelt’s speech at West Point about how “toughmindedness, a good trait — was replaced by meanness and greed — both terrible traits.”  He followed this statement with a powerful acknowledgement that few corporate leaders would have made that “the bottom 25 percent of the American population is poorer than it was 25 years ago.”  He deserves our applause for this candor.

Yet the bulk of the speech is dedicated to making a commitment to rebuilding manufacturing in America, a personal commitment by Immelt himself.  I have no doubt that GE can pull this off, but the speech should be a warning to other corporate leaders who may be tempted to tread in the “build American, buy American path.”  Leaving Chinese complaints of preferential treatment aside, the commitment to rebuilding American middle class jobs while competing in the global export market will be much easier to talk about than execute.  Those speechwriters warming up their quills to provide CEOs with a seasonal hot toddy of  patriotic good feeling need to think carefully how they pen words that could come back to bite their masters.  In the area of U.S. job creation, better to let actions speak for themselves.