Trust and the Performance Economy Part 2 (Paul Allen)

You Must Deeply Relate to Your Markets in Today’s Performance Economy, or You're Operating Blind.
No markets….no moolah. 
No trust… no markets.

Ed Note:  You can find Part 1 of the series HERE. 

Well-defined and trust-breeding markets matter more than ever today. Every marketer and organization must meet very specific requirements to succeed. But perhaps more importantly, every marketer and organization serves very specific people.

I remind myself regularly that markets are just lots of people who often want the same thing. And there is a lot of evidence that these people, who are your markets, are asking categorically for two specific things from you:

“Do me some good” (Investment Protection)  
“If I spend money with you, is it going to be a good investment, a good value?” Customers will not give you money in today’s increasingly hyper-transparent marketplace if they believe you're not delivering the best option in a sea of alternatives.  And as word-of-mouth research is discovering, your customers talk to peers about you online, offline, in every context imaginable.  The operative word for marketers here is “deliver."  We live in a “show me marketplace” (a term coined by the Trustmeisters here in the Reputation Garage.) In such a marketplace, you need to deal with the “do me some good” issue proactively and in advance.

“Don’t do me harm” (Reputation Protection)
The vast majority of people, unfortunately for our economy, don’t believe big companies are ‘in it for them.”  The same has been true for government, the media, and others.  Sorry to say it, but even your own customers are unlikely to trust that you have good intentions and their self-interest at heart.  As a result, the question your customers are asking harder than ever is “if I associate with you, vote with my wallet, will it make me better off... or are there hidden downsides?  What if your products and services don’t last, prove unreliable, embarrass or harm me somehow?  Perhaps worse, what if I just don't like you?"

In an economy and purchase-decision environment stressed at the core, people gravitate towards like-minded organizations, who show good intentions and who help their positive self- image by validating and enhancing their point-of-view.  If you end up with a reputation for doing harm, watch out! This is not an environment for mistakes. Now more than ever, products and services can't win by merely delivering features and functions, they must make the consumer feel smart, protected, safe, heard, and connected.  Your customers may buy from you.  Do they feel good about it?  And what do they say about the experience to their friends, online or otherwise?

A useful way to think about the issues  above is to view investment protection and reputation protection as a parallel universe to value creation and trust creation, which I discussed in Part 1 of this series.  One is defense, the other offense.  In volatile markets, it is a strategic imperative to decide when one is on offense, and when one is on defense.  Downturns often mandate defensive strategies. But some luckier brands could find themselves in the right place at a bad time. 

Trust Creation versus Reputation Protection is in our view a fundamental brand strategy filter to help find the right market development strategies that have mass and direction. We believe that they need to be a key part of every organization's roadmap for identifying and executing on the ideas and offerings that you hope will be embraced by your markets (the people who will give you money).  It is a management-level exercise that will require taking a longer-term view of your brand, assembling and managing the right talent to build trust and focusing on direction and flawless execution.

It is only fair to note that the current Performance Economy (and like all before it) comes with its own special features - like a media-fueled depression-era mentality, the nationalization of the financial industry globally, and a lot of speculation as to exactly what economy we’re in now.

But you already know the answer to that. And can start thinking about:

1.     When should your strategy emphasize offense (value creation/trust creation) vs defense (investment protection/reputation protection)?

2.     Do you deliver both investment and trust protection to your customers?

3.     Are you fully leveraging the cultural, behavioral, societal, and philanthropic assets of your organization?

4.     Is there an institutional understanding that trust creation accelerates value creation?

Some food for thought if you’re thinking at all about this Performance Economy and how it might be navigated, or even conquered.

Paul S. Allen is the chairman of independent advertising agency Allen & Gerritsen (www.a-g.com)  He is also a founding “trustmeister” of the blog The Reputation Garage.

Copyright 2008 by The Reputation Garage and Allen & Gerritsen

Trust and the Performance Economy Part 1 (Paul Allen)

Back in the year 2000 – shortly before 9/11, way before the invasion of Iraq, and way-way before the collapse of the global credit system - a serious debate raged. The central question was a profound one.

“Which economy are we in?”
Good question. What’s everyone think?

The year 2000 was the backside of the dot.com bubble, still bloated and ready to burst. Money flowed, valuations were generous, VC-backed investments were the rage, technology was everything, more people had more than they had ever had before. Which, I guess, meant people had lots of free time to think about exactly which economy they were enjoying so much.

Pundits said we were in the midst of the Internet economy, the technology economy, the Silicon-Valley economy, the dot.com economy, the wired economy – and the big kahuna of them all – the new economy. My personal favorite is the new economy - because it made so little sense, as if the all too human drivers of economic sustainability took a permanent vacation. Plus, the moment you anoint a new economy, it starts becoming an old economy. And as we are painfully learning today, sometimes an old economy can become barely an economy at all.

“So, again, what economy is this ?
My answer is the same as it was in 2000. This is the Performance Economy.

In August of 2000, I penned an editorial column titled “The Performance Economy.” The following excerpt (forgive me for quoting myself) sums up my view:

“I am no Alan Greenspan, but markets have always rewarded performance. So why not describe the economy by what it is and always has been, the Performance Economy. No matter what descriptors we give it, the standards of economic measurement will always concern itself more with fundamental performance than today’s investment fad.”

So how do we think about this from today’s vantage point? 

Clearly there are aspects to performance that remain the firmament of value creation – revenue, earnings, efficiency, quality, liquidity, capitalization, etc. These will always be a vital part of any Performance Economy. But there are components of performance that I would characterize as the firmament of trust creation – behaviors and characteristics that mitigate risk and enhance staying power during challenging (pronounced “recessionary”) economies. In times like these, trust creation might be just what the economist (pronounced “doctor”) ordered.

I am also pretty convinced that trust creation has an exponentially positive effect on value creation.

As organizations wrestle with the challenges of a volatile economy by rationalizing relative performance, there are other important performance opportunities that have the potential to help offset the downward pulls of market movements. Revenue, earnings, efficiency, quality, liquidity, capitalization will always be a highly managed part of any Performance Economy (value creation). Where many organizations fall short is in thinking about the opportunities, short and long-term, that come by focusing on managing trust creation.

Here’s a list, not in any order, of a few institutional characteristics that contribute greatly to trust creation: characteristics that help offset the unavoidable swings in value creation dictated by a volatile environment:

1. Genuine commitment to benefitting stakeholders in tangible ways
2. Qualified, accessible and accountable leadership
3. Executive decision-making that carefully weighs impacts on stakeholder interests
4. Transparent financial practices
5. Transparent, direct communications
6. Clear commitment to business ethics
7. Societal contribution for non-commercial purposes
8. Environmentally responsible operations
9. Consistency of promise relative to delivery
10. Authentic, high-touch customer engagements

Individually, or in the aggregate, the list above would enhance the real and perceived trustworthiness of any enterprise. And would help stave off customer, employee and margin erosion in times of uncertainty.

The question my fellow trustmeisters and I ask an organization is this: Do you really manage trust creation? Creating trust is an active enterprise. Either you manage it like other performance measures (such as quality) or you leave yourself open to being an also-ran in this important dimension with your stakeholders.

And that may be just the ticket for getting through some of the darker aspects of the current “performance economy.”

Paul S. Allen is the chairman of independent advertising agency Allen & Gerritsen (www.a-g.com)  He is also a founding “trustmeister” of the blog The Reputation Garage.

Copyright 2008 by The Reputation Garage and Allen & Gerritsen

On The Small Matter of Optics (Stephanie Fierman)

"Optics," in Wall Street parlance, means how something looks or appears on its face (without a lot of detail).

It's ironic that the phrase originates in the investment community - because said community seems particularly blind to the topic and its power.

I submit to you the following:

1. AIG used taxpayer money on sales retreats, replete with spa treatments. After getting pilloried in the press for such profligacy, the firm went ahead and used more taxpayer money on deferred comp for the top 5% of its executives. Earth to AIG, come in AIG...

2. The CEOs of GM, Chrysler and Ford flew to Washington DC in private jets this week to plead for a bailout. The Washington Post labeled this a case of "stone-cold tone-deafness."

3. James Cayne, the former CEO of Bear Stearns, was busy playing bridge in Tennessee without a cell phone or Blackberry while the financial community struggled to save (or sell) his firm.

On the flip side - with good optics - is The Nielsen Company who recently cancelled its 2009 client meeting, citing economic concerns. Does it matter why Nielsen may have actually cancelled the event? Not for a minute.

The importance of optics can be a hard lesson for executives to learn. As a marketing executive, I have counseled many on discontinuing or deferring activities not just because said actions may be truly inappropriate, but also because of how they will be interpreted by stakeholders. And in times of heavy oversight the result of such activities is exponentially devastating.

Remaining in tune with the effect of optics on an organization's reputation and perceived integrity is the job of every leader.

Blogger forces NASA to Admit Global Warming Error and Other Trust Missteps (Jarvis Cromwell)

Today on the Trustwatch List:

It's reported that all three big auto CEOs took the fancy private jet to the government panel meeting where they planned to ask for a taxpayer bailout.

General Motors takes out a full page ad in The New York Times on why they deserve a bailout. It was all about them with nary a peep about their intentions for customers. Reputation myopia apparently remains epidemic in Detroit.

AARP investigates marketing practices of partners who were not truthful in how they sold health insurance plans. See HERE.

And finally there’s NASA. Last year NASA officials admitted that for the past seven years they had used the wrong temperature statistics to assess global warming trends. The mistake was spotted by a blogger, who forced NASA to declare the error.

Well, my friend Paul Walsh who is guru of all gurus on the weather’s impact on the global economy posted this morning that NASA has made another mistake along these lines – overestimating climate change numbers. See HERE.

And this may be shameless self-promotion, but the trustmeisters here at the Reputation Garage were happy to hear him note the following:

“The NASA PR engine should review the website (The Reputation Garage) of my friend, colleague and "trustmeister" Jarvis Cromwell. Reputation and trust capital is a key metric for a scientific agency like NASA -- making the case for an issue as critical as climate change (or going to the moon, mars, etc.) is only viable if the public can trust the information that they put out.”

Thanks Paul. Trust and reputation are not merely communications issues, they are performance issues and every one of these organizations needed more process in analyzing the downstream impacts of their actions on stakeholders.

Engaging Employees in an Economic Downturn (Jarvis Cromwell)

We've said before that "spin" is now part of the lexicon - and that changes how you communicate. In what is the lowest trust environment in a century, words are increasingly disbelieved.  Motivating workforces is not the sole job of an HR or PR department, but an exercise of transparency and engagement across the company.  And for a company with, say, 10,000 employees, there is no better (or worse) buzz than what gets served up by this crowd. The video tips from Vince Thompson below outline the idea pretty well.

Changing Media "Trustscape" Part 3 (Jarvis Cromwell)

For several years now public trust in the mainstream media has been declining, a trend reflected across dozens of polls. One poll from earlier this year, HERE, found just 19.6% say they believe all or most news media reporting.  This was down from 27.4% in 2003.

Courtesy of my friend Paul Walsh, here's a great YouTube piece that unmasks television journalism's desire to show sensational images.  Right before this aired, Katie Couric was promoting a segment criticizing a staged inteview with soldiers in Iraq. A few moments later the show went to correspondent Michelle Kosinski with this:

NBC Reporter Exposed as She Fakes Extent of Flooding on Today Show

Copyright 2008 by The Reputation Garage.

Media Trustscape Part 2 (Jarvis Cromwell)

When a McCain aide leaked that Sarah Palin didn't know that Africa was a continent, the media went on a manhunt to figure out the source of the leak.

And the answer finally came back that it was Martin Eisenstadt, a McCain policy adviser. MSNBC, Fox, the Los Angeles Times and blogs and media outlets aplenty covered the news.

One problem. Martin Eisenstadt doesn't exist, as The New York Times noted today HERE. He is a complete hoax.

Score one for the NY Times and traditional trust-tactics of verifying sources and the facts. In this case dozens of publications and thousands of blogs were perfectly happy to pass along an entirely faked source to their readers.

Food for thought in the changing "media trustscape".

Copyright 2008 by the Reputation Garage

At Columbia: The Changing Media "Trustscape" (Jarvis Cromwell)

Back when I was CMO of Thomson Financial, a viral video about Google was making the rounds. From the vantage point of the year 2020, the piece spun a fictional history of Google.  Sometime around the year 2013 The New York Times was forced to convert to a newsletter “read mostly by the elderly.”

Now a few years later we’re back to the future.  On Tuesday night Columbia University’s J-School hosted its 4th Annual Changing Media Landscape discussion. The consensus?  Expect the disruptive changes taking place to accelerate, particularly given the economic environment.

Jacob Weisberg, chairman of Slate, cast the die on the relationship between traditional and new media this way:

 “New media and the traditional media are diverging rapidly after a period of relatively peaceful coexistence.  We are moving into a conflict model.”

Of course the traditional media model has been under siege for several years and Jeff Jarvis and others have warned about the consequences of failing to adapt. And media company share prices have reflected Wall Street’s concern.

But innovation and adaptation take time, which is why they are not management’s first reaction to disruptive change.  Cost cuts, however, are tried and true, albeit not actually a fix.  Another panelist at the discussion, Erica Smith, is a news designer for the St. Louis Post-Dispatch.  She also writes a blog called Paper Cuts that details the jobs cut at newspapers nationally. By Erica’s count, the industry has lost 13,000 jobs so far in 2008 with the coasts particularly hard hit.

Another concern on the lips of most every panelist was trust.  Indeed, it wasn’t lost on the panel that a changing media landscape creates what we've termed here in the Reputation Garage as a changing media “trustscape.”

Sewell Chan, blogger/bureau chief of the New York Times’ City Room blog, noted that trust models are different for new vs. old media. In a traditional media you seek audience confidence based on the judgment of editors and by maintaining a high standard of reporting.  Trust in such organizations is not high, however, falling in some cases to historic lows along with trust in government and big companies in general. 

Content aggregators, such as Tina Brown’s The Daily Beast or The Week, have a different trust model because their role is to sift through reams of news and data to find the golden nuggets. (Professional News Recommender is now a job title, by the way.)  Readers need to trust the sifting process, but the jury is out on how to create trust for this model. 

Finally, the new media trust model seeks to create an environment where you build on the trust that is already resident in social networks.  As we’ve noted in our work here, we are now living in the lowest trust era in a century.  Peer-to-peer trust, however, is one of the few bright spots.  Digg, Delicio.us and others are very democratic in how they surface content.

Chan believes that with the dawning of mass amateurism in news and reporting across millions of blogs, the lines between the professional and the layman have blurred. 

The learning for would-be “trustmeisters” is this: There is lots of good content being created in the new media world, but those core trust issues of verification, fairness and neutrality will never go away.  Old media trust practices need to be married with new media democracy.  While progress is being made, there remains plenty of opportunity for innovators to find new ways to accomplish this.  

Stay tuned.

Copyright 2008 by the Reputation Garage

Human Resources Should Lead on Trust (Jarvis Cromwell)

The following piece written by me appeared in HR Leaders

Sure, trust is “topic A” among the pundits and in many respects it’s turning out to be one of the defining issues of the emerging century.

No news there. What is getting less attention is that the current state of low-trust is not confined to the financial markets. Public distrust in big business, Congress, even not-for-profits, reached its lowest ebb in a century… and not this past year, but back in 2002. In writing about how striking a finding this was for business results at that time, the Roper Organization grimly noted:

“It is unprecedented to see this many people with an unfavorable opinion of big business.”

For HR professionals, low-trust must now become a central issue in shaping human capital strategies, employee engagement and corporate performance initiatives. Why? Because trust is transactional and can impact relationships in every corner of your organization. No matter what the transaction may be – an interbank loan, a frank discussion with an employee, a sales pitch, or a team meeting – the outcome is aided when trust is high and hurt when it’s low. In this sense you can think of high trust as an accelerant to business performance and low trust as a kind of clotting agent that at best slows transactions down and at worst stops them dead in their tracks.

Low trust is a particularly nettlesome HR issue because it makes leadership success more difficult. A startling statistic comes from the Harris Poll, which in 1966 found that 55% of Americans had “a great deal of confidence” in the leaders of big companies. In 2007, only 16% of Americans expressed the same confidence.

Imagine you were designing an employee engagement program back in 1966 to help achieve an important operating goal. Maybe you needed to rally the troops around a new strategy, or convince sales about the quality of a new product, or persuade the union that certain proposed regulation is unwise. Now imagine that same program being implemented today amidst much lower trust among all the various stakeholders. It’s a pretty safe bet that the desired transaction in the higher trust world of 1966 would have greater chance of going smoothly than the same program delivered in 2008.

Beyond the Roper and Harris polls are literally hundreds of studies over the last few years that paint a very difficult operating environment for building trust, among the findings:

• As few as 13% of all Americans are placing their trust in big business
• Only 39% of employees in a Watson Wyatt survey said they trusted senior leadership
• On primetime TV you are 21 times more likely to be kidnapped or murdered by a businessman than by the mob. Some three-quarters of folks out there feel companies don’t tell the truth in advertising.
• Three quarters of employees in big companies observed violations of the law or company standards in a 12-month period.

Grim statistics all – but table them for now. Because the key question comes down to this: how do you lead a company to capture strong performance when trust is low?

As a performance discipline, trust today is where quality was in the 1970s before Deming and TQM were widely understood or applied. Senior executives often intuitively recognize that trust is important for driving results, but they lack an effective process to manage it. HR professionals can help their organizations close this gap by taking steps to begin institutionalizing processes that lead to higher trust.

As trust and reputation-related risk issues climb to the top of management agendas, HR can lead the way by seeking effective ways to align what the organization is doing (performance) with desired reputation (trust). The problem is that almost every management team lacks two vital components: 1) a disciplined review process to evaluate how decisions and actions across the organization have impacted trust among stakeholder groups and 2) a means for guiding operational execution and decision-making – both to achieve reputational goals and to mitigate the risk of a damaging “trust event.”

Accepting the idea that companies need to find new and more effective ways to ensure that performance is aligned with trust, how do you begin? Based on work we’ve done in the Reputation Garage, a collaborative founded to create new ways to improve organizational performance in an era of low trust, here are four steps worth considering:

1. Improve executive decision-making by sensitizing management to the issue of trust. Based on our study of this issue, the lack of understanding executives have for the downstream trust impacts of their decisions and actions is a primary contributor to the problem. The good news is that training can install a “trust lens” to guide executive decisions and improve appreciation for trust-related impacts.

2. Identify those key trust/reputation elements that are vital to achieving your mission, goals, and strategies. The first step in making trust a performance-related issue in an organization is to identify specifically where it fits into the core success drivers of the business. Call them what you will, but the strategic goals of the company need to link with your trust in meaningful ways, because it is management’s strategic goals that drive the focus of the company.

3. Consider adding a trust/reputational risk dimension to your current risk management program. Trust-related events occur with far more frequency than one might suspect. In a study conducted between 1989-99, Lippincott Mercer found a surprising number of Fortune 1000 companies experienced a serious event that damaged their stock price. To be considered serious, the event had to lead to a company losing 25 percent or more of its market value in four weeks or less—in other words, a major haircut. How many companies experienced this kind of corporate tsunami? One out of ten! The leading cause of loss was what Lippincott Mercer called “strategic missteps.” Representing some 58 percent of the events that took place during the study period, many of these missteps stemmed from trust/reputation issues. If you calculated the typical loss based on an average market capitalization for the Fortune 1,000 today, you would come up with a loss of more than $2 billion per company, on average.

4. Enhance transparency and measurement through a trust-related performance measurement program. Do you have a process in place to collect, evaluate, and report on how various operations, actions, policies, and decisions affect your brand reputation? What work have senior management teams done to identify and manage those key operational tasks that will create brand opportunity or mitigate reputational risk?

I have been involved with this issue for 20 years and the one thing I can say with confidence is that the tools for managing trust today are crude. My expectation is that in the next few years many companies will move from a state of stone knives and bearskins to a more sophisticated approach. Corporate performance and the world will be better for it.

Copyright 2008 by the Reputation Garage

Trust Redux (Jarvis Cromwell)

In founding the Reputation Garage collaborative back in early 2007, we wrote of our goals to drive trust in a low-trust world. The premise was that Trust mattered and needed to be fixed before things really want awry. Little did we know! Below is that early post.

WHY WE STARTED THE REPUTATION GARAGE

The world’s business community has reached, well, let’s just call it a low point: Practically nobody trusts big business. (In the U.S. the number who say they trust big companies and brands hovers around 13%)

So the intent behind this blog is as simple as it is ambitious: We're an experienced group of professionals who want to help change the dismally low worldview of business. We are pushing for a new era of business performance - where companies and their brands are trusted more than they are today. (Along the way, we also expect to see continuing seismic shifts in marketing practices as we know them.)

Our merry band of “trustmeisters" includes yours truly, a consultant and former big company CMO who is known for his thinking on this topic; a U.S. ad agency chairman who questions the efficacy of many traditional marketing programs and practices; a corporate social responsibility expert and U.K. native who has also served as co-head of the U.S. branding practice for a global communications firm; and a leading thinker at the intersection of marketing and technology whose day job happens to be at one of the world's leading consulting firms. We'll be adding more trustmeisters as we go along.

Are we out to change the world? No, but if trust matters, then a lot of organizations are not supported by strong footings. More importantly, a majority of customers and employees around the world are expressing unhappiness with the current state of affairs. That doesn't exactly spell brand power or, to use the catch phrase of the moment, employee engagement. Because traditional practices have failed to prevent or solve these problems, new ideas and actions are called for here.

So for the record, trust matters. Indeed, if you’ve attended any of the last several World Economic Forum meetings in Davos over the past few years, you know that there is significant hand-wringing taking place over this issue. When trust declines, the nature of virtually every exchange and transaction is altered. Brands, which are built on trust, lose value. Sales become harder to generate. Customers defect, as loyalty deteriorates. Employees disengage from their jobs and the company mission.

So where's the fix for organizations looking to improve upon this sorry state of affairs? Join us here in the Garage as we uncover, evaluate and share emerging new ideas and solutions for what may be the most important marketing issue for our times.

Reputation Management for New Media Survey - How ready are you? (Paul Dunay)

One of my goals this year was to do a study on reputation management. As we all factor in the effects of new media on our brands, I felt this was a topic with long-lasting appeal to every marketer.

My hypothesis going into the creation of these questions was that B2B marketers (including yours truly) just aren’t adequately prepared for an online reputation crisis. Dell wasn’t, Wal-Mart wasn’t. If those big B2C brands weren’t ready, I was betting we weren’t ready either. And I was right!

To be totally transparent with you, I wasn’t surprised by many of the responses to my survey. The bulk of you are monitoring your reputation in some way, shape or form. But are you poised to respond in the case of an online reputation crisis? 55% admitted you weren’t.

Perhaps you need stronger guidelines in place, like a blogging policy. Two-thirds of respondents don’t have one!

Many of you are do-it-yourselfers when it comes to monitoring your reputation. Is that perhaps because your company hasn’t made this a strategic priority? 53% admitted it wasn’t a strategic priority for you – yet!

My goal here is to give you the state of the union when it comes to monitoring reputations online. This data is bound to change, so I hope I get you thinking of ways to close the gap with your organization’s reputation!

Click here to download the free research report

Special thanks to my sponsors – Trackur.com, run by the renowned Andy Beal of the blog MarketingPilgrim.com, and Marketing Profs’ equally renowned Ann Handley for their support on this survey.

Reputation Management for New Media (Paul Dunay)

A strong brand helps to communicate that a company and its offerings are relevant and uniquely able to meet customer needs. Most companies today pour millions into brand-building campaigns to generate that external awareness, which in theory can speed up the sales cycle. This has become the accepted norm, taught to us by the very advertising agencies we hire.

But all this great awareness can come crashing down on you with one reputation disaster online.

Good and bad reputations are opposite sides of the brand coin. And the ability of consumers today to share their opinions of your brand with just a click of a mouse levels the playing field for all and puts your brand in constant peril.

A solid reputation reflects the partners you do business with, the strength of your management team, your company’s financial performance to date and, ultimately, the types of employees you hire and will hire in the future. But literally millions of customers and prospects engage in social communities on the Web today. Facebook alone has 50 million community members, with over half of them logging in daily! Couple that with the ease and ability to create a quick video or podcast, or post a negative comment on a blog, and you have a recipe for reputation disaster.

Unfortunately, when a reputation disaster occurs, it is becoming more difficult for your PR team to execute using the usual crisis management playbook, because the type of media, placement of media and approach to each medium differs. This fragmentation means it will become increasingly difficult to neutralize criticism and restore reputations when something happens.

Additionally, the Internet already has built-in, automatic reputation ranking systems. Currently examples are Google for companies and eBay for vendors. These ranking engines are quickly becoming extremely effective ways for people to determine how reputable your company is before deciding whether to do business with you.

The bottom line: As media continue to fragment with the explosion of yet more social networks, aggregators like Google will become increasingly important in helping users decide whether or not to do business with you.

So what is a company to do?

I recommend a three-step approach to reputation management called “MRO”:

1. Monitor – Companies should designate an employee or hire an external service to monitor, moderate and drive positive discussions.
2. Respond – Technical staff should be designated to respond to any product or support issues that arise from communities and take the lead in responding with action plans to any negative sentiments that develop.
3. Optimize – Companies need to proactively optimize their reputation online over time by exploiting the positive aspects of their brand (an example here is GE, whose Ecomagination is demonstrating the company’s commitment to keeping the environment clean).

Each MRO element is designed to give you a point person for this reputation-protection trifecta:

Monitor gives you a way to see and engage in conversations before they get out of control. People will be a lot more polite online when they know you are listening. The challenge is learning about conversations that arise quickly. This is where you need reputation bulldogs, who can be out there watching all the time.

Respond gives you a dedicated point person internally who can talk about your product or service with authority and provide clarity on how you might resolve an issue. As I said above, this should be a technical person rather than a communications person. This will convey the company’s commitment to address the issue.

And finally, Optimize. Optimizing your reputation in the marketplace means you go beyond just keeping it on track. You invest in the online aspects of your reputation just as you invest in other dimensions of your brand.

Having a strong brand doesn’t mean you have a strong reputation. Ignoring this critical factor is a risk that companies can’t afford to take today.

Reputation Gaming with the Sybil Attack (Paul Dunay)

Online reputation management, be it a personal reputation or a corporate reputation, has become a growing issue for marketers over the past few years. Groups are popping up devoted to helping you manage, and in some cases clean up, your digital reputation.

On the flip side of that, there is another group also emerging – reputation gamers. Reputation gamers are abusing the very reputation management systems responsible for our digital lifestyle such as Google, Del.icio.us, eBay and Digg, etc.

Here is an example of such activity:

Digg is a site where its members can submit articles, along with a short description and a link, in the Digg system. Other members look through these articles and choose either to “digg” or “bury” stories. Articles with the most “diggs” make it onto the site’s widely read front page.

One reputation gamer’s method of choice was the so-called Sybil attack. Named after the famous case of a woman with 16 personalities, a Sybil attack occurs when an individual opens multiple accounts and has them all recommend the same article. If it gets enough votes, the story could make it to the front page of Digg, with a huge payoff. Getting on the Digg front page is equivalent to a front page story in a major publication, drawing millions of readers who have the potential to catapult a story to the top of a Google search. If the Digg site has advertisers, it could be a financial windfall. If the site sells something — say a widget or a T-shirt — the rewards can be even greater!

Where’s the Buzz? First of all, let me be clear - I do not recommend this type of activity. The Web 2.0 world is meant to operate in a self-policing way, much like Wikipedia. Marketers who go down the Sybil attack or a similar path should beware their reputation as a marketer is at stake. As for the sites themselves, I guess we need to think, perhaps worry, about the reputation of the reputation management systems themselves!

Trustmeister to PRSA: Become Ambassadors of Trust (Jarvis Cromwell)

I was in Maryland last week speaking at the 30th Annual PRSA Chesapeake Conference. I had been asked to speak on the topic of how communicators can gain more influence at the c-level executive table.

This is not a question that lends itself to the typical conference diet of case studies or top ten lists. The stakes are higher than that. I tend to think of the times we live in as a kind of “triple witching hour” for both marketers and communicators. Trust in big companies has reached an historic 100-year low. Reputational risk is now seen as a top-ten worry among CEOs. And the new digital era has upended traditional one-way communications programs in favor of two-way dialogue, enabling the public to take more control of the conversational agenda.

These trends and others are making life especially challenging for corporate communicators. But we’re talking about gaining a strong seat at the C-table. So for now, let’s leave aside statistics that show as few as 13% of all Americans are placing their trust in big business, or that on primetime TV you are 21 times more likely to be kidnapped or murdered by a businessman than by the mob. We’ll also shelve for a moment the nettlesome fact that some three-quarters of folks out there feel companies don’t tell the truth in advertising. Or what about that KPMG study a few years ago that found 76% of employees in big companies observed violations of the law or company standards in a 12-month period.

Grim statistics all – but table them for now. Because the real question around the C-table typically comes down to this: how do you lead a company into strong performance?

Turns out that in recent years the low-trust headwinds that are negatively impacting so much of American life are also making leadership more difficult. A startling statistic comes from the Harris Poll, which in 1966 found that 55% of Americans had “a great deal of confidence” in the leaders of big companies. In 2007, only 16% of Americans expressed the same confidence. So imagine you are writing a speech for a company executive in 1966 to help achieve an important operating goal. Maybe you need to rally the troops around a new strategy, or convince customers of the quality of a new product, or persuade legislators that proposed regulation is unwise. Now imagine that same speech being given in 2007. It’s a pretty safe bet that the impact of the speech in the higher trust world of 1966 would have greater impact than those same words delivered in 2007.

The learning here for would-be “trustmeisters” is that our words are less believed today. That’s a big issue because leaders depend on effective communications to sell products, engage employees, and generally manage a business. That’s why communicators must become effective ambassadors of trust for their organizations. Executives who are not looking for ways to tackle the issue of distrust will find that they’ve inadvertently diluted their power as leaders. Communicators and marketers will find a ready seat at the executive table if they can help management take back the high ground.

Easy? Not at all. May the force be with you.

On Stephanie Fierman, Google and your Online Reputation (Jarvis Cromwell)

Listen up, because this is important to your professional reputation and career.

Readers know I blog about the impacts of low trust on all kinds of human exchange and enterprise. Do you trust me as a credible expert? If you're not so sure, what action would you take?

Did I hear the word "Google"?

Well, google me and you'll get a bunch of corroborating evidence. I'm a seasoned chief marketing officer (CMO), I've contributed a chapter on trust to a marketing book and I speak about trust and reputation at conferences around the country. Unfortunately, a Google search on my name also serves up this result:

"A 25-year-old Goldsboro man -- wanted by New York City police on two murder charges -- was arrested Tuesday by Goldsboro police."

That other Jarvis Cromwell – who apparently is a couple of decades my junior – shows up on page 7 of my Google search listings. If you ever thought he was me, your opinion would surely change. Which is why online reputation is so important, and that brings us to Stephanie Fierman.

Last week Stephanie Fierman, a well known and respected marketing executive, spoke at a CMO Club dinner in New York and shared some thinking on managing online reputation. You can find coverage on this topic by Anna Maria Virzi in ClickZ here. You can also read Stephanie's blog, here.

Stephanie got everyone’s attention by discussing how widespread gossip, innuendo and misinformation about executives are on the internet. And it is easy for executives to wake up one morning and find themselves the victim of misinformation or worse. And the more senior and visible you are in an organization, the more vulnerable you are to potentially damaging disinformation campaigns. The scary part of the story is that everyone from recruiters, to new hires to clients can and do check you out on the web.

So start taking action now. Here are a few of the tips Stephanie shared the other night:

1. Monitor your online footprint. Many people rarely if ever check out their search listings. That's a mistake. Make sure you check your online presence regularly on all of the search engines. You should also monitor online news services, newsletters, blogs, chatrooms and image banks.

2. Build your online reputation before you need it. If you haven't already done so, you need to begin creating search-engine friendly content before a crisis arises. Blog, post to other blogs, create a website, create online profiles (LinkedIn, Facebook, etc.) be active at work and in other activities that will get you mentioned online.

3. Respond quickly to damaging, inaccurate or slanted online content. If you find yourself attacked or worse online, don't hide. You need to respond quickly and authoritatively in the realm where the original content appeared, with clear and open messages and factual information. Tell the truth.

4. Be discriminating. If you participate in social networks, be very discriminating about whom you connect and what content you post!

5. Appeal to the webmaster. Ask the webmaster to remove questionable or defamatory content. Frequently they will.

In some ways, Google is bringing us back to a Victorian age when social circles were smaller and gossip could spread throughout a community like wildfire. There was little or no anonymity in those circumstances and ladies and gentleman had to vigorously defend their reputations because ruination was a real possibility.

The takeaway for trustmeisters: today's professionals live in a google-centric world where rumor and innuendo can be used against them. All the more reason to manage your personal reputation proactively and with care.