CEOs look to us – look to you – to be, if not the smartest person in the room, certainly able to make some very serious judgments often under crisis circumstances when there is a great deal on the line. We have to approach that responsibility with a great deal of humility and understanding, and research helps.
That’s what Don Baer said to Institute for Public Relations Trustees when our Board met last week in its first full session of 2010. Don is Chairman of Penn, Schoen Berland (PSB) and Worldwide Vice Chairman of Burson-Marsteller. He engaged Trustees in their opening session.
The research results he presented illustrate once again just how badly corporate and CEO reputations have been damaged. Like many of you, I am hopeful and remain optimistic about economic recovery and the business of public relations. What we learned from research is that the hole that corporations and their leaders are in, however, is much deeper than many corporate executives are willing or able to admit.
It’s no surprise that the general population is intensely distrustful of CEOs and many of the companies they lead. If you’re in the banking, insurance or automotive industries, you already know that three out of five Americans describe corporate CEOs as “greedy and money hungry” or “very wealthy, overpaid fat cats.”
Three out of four Americans say they trust corporate CEOs less than they did two years ago. When asked to describe their views, 62 percent of Americans say that generally, corporations and their spokespeople are dishonest, and most communications from companies are lies. The data comes from a poll for the Institute Board conducted two weeks ago, and other data compiled by PSB for Institute Trustees.
Even more disturbing is that corporate executives and spokespeople themselves are split 50/50 on the same question. I found it amazing and troubling that only half of “business elites” say they believe that corporations and their spokespeople are honest and telling the truth!
As our board assembled in New York to discuss these findings, and the implications on our profession and the Institute’s agenda, The Economist published an insightful article. It suggests what will be required for major brands to redeem an image soiled by scandal and arrogance – just as we watched the re-launching of the most valuable personal brand in the world: Tiger Woods.
The key, according to The Economist, to a successful re-launch lies in making a cool-headed assessment of how much a scandal damages your company. If a crisis involves life and limb (e.g. Toyota) and has spread beyond particular products or particular divisions to afflict the entire corporation (e.g. JetBlue 2007), then companies are well advised to go into collective overdrive to repair the damage.
What will it take for many CEOs and other corporate executives to appreciate and understand the intensity of stakeholder frustration and distrust? Or more importantly, what will it take to turn it around?
The Economist article underlines two of the most fundamental rules of successful management in trying times.
First, the CEO needs to quickly take charge sidelining “corporate cluck-cluckers” (their words, not mine) such as lawyers (who worry that any admission of guilt will lead to lawsuits) or financial officers (who obsess about the bottom line). Many of the most damaging crises have resulted from foot-dragging at the top – as appears to be the case with Toyota today. The second rule is that crisis-racked firms should redouble their focus on their customers.
Similarly, the PSB poll conducted for the Institute Board asked 300 Americans: “What should a company do to gain your trust?” The top three responses were these: 21 percent said “be honest, don’t lie and keep your promises;” 10 percent cited transparency and accountability, and 8 percent said “care about people and customers and provide good service.”
There are a lot of things we can’t be Pollyannish about at this point, says Don Baer. We have to be realistic, serious and intentional. As data clearly show, rebuilding trust and corporate reputation top the list.
There is a convergence of forces that could not have been predicted or planned for: We saw the technological revolution coming a decade ago, but perhaps not the speed of change and certainly not the degree of economic uncertainty.
“Basically what we’ve witnessed is the floorboards being pulled out from under a large chunk of the population. Then you throw in things like great hope and expectations for a new administration in Washington and a year and a half later, what has happened? This portends fundamental change. I don’t think we’re going back to the way things were.”
“Previously you were able get things done by pulling on a half dozen levers with distinctive functions, and you now can pull on 20 or 30 levers, and you don’t know which of those you leave out at your peril.”
It’s time for many people in public relations to change the way they think about corporate trust and reputation. Find out what the levers are. Generate useful ideas on how to regain trust with stakeholders inside and outside of organizations, and help steer the way out of this untenable situation.
That’s the role of corporate public relations.
Robert W. Grupp
President and CEO
Institute for Public Relations
It seems to me that serious discussions of trust take place only after the fact. How many organizations put the need for trust at the very top of their operational priority list? BP has run a branding campaign for some years now attempting to position the company as a leader in environmental responsibility. Unfortunately, we now learn that poor operational practices were apparently more the rule at that company. That is how trust is destroyed. It is unlikely that any firm in the energy business will enjoy a significant measure of public trust for years, perhaps decades to come, and not just because of BP. Trust can never be taken for granted. It must be earned every day.
It depends how one looks at trust. For some, it is a cause and for some it is an effect. Whatever your perspective, it is indeed refreshing to see how it is starting to be acknowledged as a variable that we need to understand better. In my view, our brief is to manage three inter-connected intangible assets for the organisation: reputation, relationships and trust. If this was the premise, we would have noticed a long-time ago that trust and relationships are the least understood. Even though our profession is public relations…we are more about communications than relationships….here I must acknowledge the work put in by Prof Grunig and friends in trying to lead us towards the relationships side….very few followers I must say.
Trust, on the other hand, is such an unwiedly subject with mutiple dimensions to it. The Institute for Public Relations, for example, has taken the Grunig Relationship model as a basis for trust (control mutuality, depedency etc), yet the IABC has taken a different line in building its Trust Index. There are, of course, many others takes on trust. Yet what remains is a need for understanding the basic Trust Drivers. If we can focus attention to the idea of Trust Drivers, we will empower the profession with variables that they can manage. However, we also need to appreciate that trust can be situtation-specific. Some stakeholders may put emphasis on one Trust Driver depending on where they stand vis-a-vis the organisation. I think more work is needed to guide us about the definitive Trust Drivers and how each Driver can be mapped to different organisational stakeholders.
For me the idea of Trust Drivers can be a useful start which can help in EXCO-level conversations to position trust issues in Board-room agendas. Such work on trust is the missing starting point. If you come to think about, this is exactly the model Charles Fombrun and his partners took to build reputation accross the world. They began by defining it on the basis of Reputation Drivers. Once we could identify these, we were able to articulate reputation with authority in Board-rooms accross the world. For me, it was only on the basis of work like this that I began to really understand what PR should be about and how it was a strategic value-add to the organisation…..after years of suffering jibes and taunts from everyone questioning what value we added to the organisation…it provided me with observable levers which I could control to steer the organisation towards a reputation direction and destination and people would understand and follow me. My communications plans beg to have context…..
We need similar work to provide the profession with similar levers to steer our organisation towards a Trust Direction and Destination
Thanks for this thought-provoking piece. Unfortunately, most CEOs are intensely devoted to achieving three goals: 1) eliminating competition; 2) avoiding taxation; 3) minimizing regulation. This prevents them from thinking clearly or acting responsibly. Surrounded as they are by corporate round pegs who think and act just like them, they are incapable of seeing why the purchase of a corporate jet on the eve of a bailout is so egregious, or why paying enormous bonuses to people who nearly sunk the company (and the economy along with it) is poor policy. Obviously, I’m not making this up. It happens every day, and because many of the pre-Crash players are still in place despite their gross negligence and malfeasance, it will continue to happen.
Bill Huey
Strategic Communications
Atlanta