corporate reputation and risk management
DESCRIPTION
Presentation by David Geddes, evolve24, at Smart Content: The Content Analytics Conference, October 19, 2010, http://smartcontentconference.comTRANSCRIPT
©evolve24, 2010
Corporate reputation andrisk management
David Geddes, Ph.D.Vice President, Research & Developmentevolve24, a Maritz Research CompanySaint Louis, Missouri
New York, New YorkOctober 19, 2010
©evolve24, 2010
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About evolve24
• Global market intelligence through integrated analysis of traditional and social media
• Integrated enterprise platform– Real-time document aggregation– Smart Content through advanced processing and analytics– Deep understanding of audience segments– Leading indicators of market shifts, risks and opportunities
©evolve24, 2010
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Approach
1. Document aggregation
2. Data processing
3. Analytics and rich tagging– Sentiment– Reputation– Risk– Topics and issues
4. Insights
5. Strategy and tactics
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Visualization of SmartContent
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What is corporate reputation?
• Collective representation• Past behaviors• Expectations• Relationships
• Networked world
Sources: Duncan J. Watts & Peter S. Dodds (2007). Influentials, networks, and public opinion formation. Journal of Consumer Research, 34 and Communications Executive Council (2010). Influencing stakeholders in a networked environment.
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Where does reputation come from?
What they do
Reputation
Customer experience
What they say
What is said about them
Actions
Words
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Where does reputation come from?
Corporate actions
Mainstream media
Stakeholder impact
Customer experien
ce
Media
Mainstream media
Social / WOM
Social / WOM
Exchange Relationship
s• Stakeholde
rs• Publics
Reputation• Cognitive
& substantiv
e• Affective &
evaluative
Social / WOM
Mainstream media
Customer impact
Business outcomes
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Why does reputation matter?
Resource
Capital asset
Sustainable competitive advantage
Intangible
Organizational goals
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What links Smart Content and reputation?
• Agenda-setting theory– Scientifically-validated– > 400 research studies– Experimental studies– Corporate reputation
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What is risk?
• State of uncertainty• Some of the possibilities involve a loss,
catastrophe, or other undesirable outcome• Psychometric emotional risk model
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How do we manage using Smart Content?
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REPUTATION MANAGEMENT AND MUTUAL FUND CASH FLOWS
Smart Content Case Study
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Situation
• Leading mutual fund company• Cash flows
▲Industry peers ▼Client company
• Management assumptions• Investment drivers
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Approach
• Regression analysis of cash flows on financial variables and reputation
Figure 1: Cumulative Funds Flows and xxxxx Reputation Equity
(50,000)(40,000)(30,000)(20,000)(10,000)
-10,00020,00030,00040,00050,00060,00070,00080,00090,000
100,000110,000120,000130,000140,000150,000160,000170,000180,000190,000200,000
Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07
fun
ds
flo
ws
($ m
illi
on
s)
(7,000)
(6,000)
(5,000)
(4,000)
(3,000)
(2,000)
(1,000)
-
1,000
2,000
3,000
Rep
uta
tio
n E
qu
ity
Cumulative Funds Flows (xxxxx) Cumulative Funds Flows / 10 (industry) Reputation Equity (xxxxx)
Fund reputation
Fund $ inflows
Sector $ inflows
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Result
• Primary drivers are financial• Significant role for reputation (R = .74)
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Application
• Communications and outreach program– Trust– Performance
• Largest gain in net flows in company history
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REPUTATION MANAGEMENT IN PHARMACEUTICALS
Smart Content Case Study
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Situation
• PharmCo, a major pharma company• FDA-ordered recall• Branded nutritional product
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Challenge
• Listen• Organize and share• Understand stakeholder opinions
– Cognitive– Emotions and risk factors– Messages
• Identify• Engage• Fix
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Who was in the discussion?
Favor ab
ility
VisibilityLow High
High Tonality & Volume Matrix
Physicians Retailers Regulators Media
Parents Health Organizations Consumer Groups
- Dr. Joseph Gigante- Dr. Robert Insoft- Dr. Elena Rossi- Dr. Bryan Wohlwend
- Meijer- Wal-Mart- Publix- Walgreen's
- FDA - Ed White- Lindsey Tanner- Ransdell Piersen
- Women, Children, and Infants (WIC)- Consumers Union- Stephanie Roseman- Sheri Weber
LEGEND
FavorabilityThe tone with which the brandor corporate name is mentioned
VisibilityThe media volume associated witheach actor
Visibility
Sentiment
Doctors
RetailersConsumer groups
Health orgs. Regulators
JournalistsParents
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What were stakeholders saying?
Stakeholder Key concerns
Health organizations • Share information
Medical professionals • Reassure parents
Consumer groups •Open information access
Parents• Loss of trust• Safety concerns• Quality• Price
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What were the emotional risk factors?
Tuesday Wednesday Thursday Friday Saturday Sunday
Emotional risk in product recall discussions
Top 5 of 19 risk factorsVulnera-
bilityDread Irreversa-
bilityLack of control
Untrust-worthy
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What were social moms saying?
• Small reputation impact
• Emotion drivers– Uncertainty– Irreversibility– Vulnerability
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RISK MANAGEMENT AND ALTERNATIVE ENERGY
Smart Content Case Study
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Situation
• Global manufacturer• European Union 20/20 alternative energy
initiative• Corporate strategy and policy teams• European fiscal crisis• Political winds• Where to invest?
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Challenge
• Monitor• Organize information• Gauge opinion• Weak signals• Threats• Anticipate• Reach out
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Political risk analysis by energy source
Risk score
Volume
Events
Weekly risk
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Political risk analysis: Wind by country
Risk score
Volume
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Political risk analysis: Topics and issues
Risk score
Risk contribution by topic
Offshore wind
Wind & economy
Energy & jobs
Wind opposition
Wind & jobs
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Influencers
Companies & organizations
People
Influence
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Political risk analysis: Wind summary
• Increased discourse▲Wind▲Renewables
• Wind▼More negativity
• Energy and financial crisis▲France, Spain▼UK, Ireland, Greece,
Bulgaria
• Offshore vs. onshore▲Debate
●Polarization
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SUMMARY
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QUESTIONS?Thank you