the mount vernon report spring 2005 - vol. 5, no. 2

8/8/2019 The Mount Vernon Report Spring 2005 - vol. 5, no. 2

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Humans tend to be social beings. We join clubs, form societiesand band together in unions. We become members of politicalparties and start book groups.

Recently, I was invited to address what I assumed to be anestablished Boston society known by the revered name TheFranklin Club. I thought the group was one of many obscureBoston clubs. To my happy surprise, the club turned out to bea newly formed organization of Boston entrepreneurs, namedafter the famous patriot. Franklin would have approved.

Benjamin Franklin left a long legacy of clubs and societieswherever he ventured. He understood that everyone fromprinters in Boston and Philadelphia, to the courtiers of thePalace at Versailles where he engaged with Kings and Queens,enjoyed social discourse around the edges of a meeting.Franklin was famous for bringing people of like intereststogether for a common purpose, and potential political orfinancial gain. Franklin understood reputation and how to usepublic relations to build understanding.

Always, the rules of these fraternities and social gatherings wereformed out of good fellowship, fair play and friendship. Fromthese principals, the organization called the United States cameto be. Our founding fathers knew the small and humble couldovercome the mighty if they formed a union for a commonpurpose. Our young country is still earning its reputation.

Reputation can be said to be the very personification of anintended good (or bad) deed. Public Relations might best bedescribed as the telling of that deed to many audiences orparticularly interested audiences. This issue of The Mount VernonReport delves into the differences and commonalities betweenPublic Relations and the new field of Reputation Management.The former being integral to the latter.

Please read on. I hope you enjoy learning more aboutReputation Management and why it is vital for the future ofour society, all free societies and mankind.

Reputation is present throughout our lives, influencing both thepersonal and professional choices we make. Its how we choosebusiness partners, which dentist or mechanic to visit, the storeswe frequent, and even which neighborhood or town we live in.When you do business with someone, just as when you meetsomeone at a cocktail party, you have preconceived notions aboutthat company or person their reputation precedes them.

Just a few years ago, the words reputation management weremet with quizzical or puzzled expressions. However, recent his-tory has given us an accelerated education on corporate scandalsand dishonesty, heightening awareness of the importance of a

strong reputation, and the substance behind it.

Three years ago, a search for reputation management onAmazon.com revealed three books. Today, the same search resultsin 19 articles and books, and a Google search produces 93,000results. In the past few years, people have built companies on thepremise of Reputation Management; organizations have putReputation Management practices in place, and some, such asSiebel and IBM, have even joined forces to offer ReputationManagement software.

Despite its growing presence, confusion still remains surround-ing the difference between Reputation Management and PublicRelations. If shareholders, customers, and the general publicintend to hold senior executives responsible for their companysreputation, the business community should be armedwith a clear and meaningful understanding of ReputationManagement.

Reputation Management vs. Public Relations

Some firms have simply re-labeled their Public Relationspractices as Reputation Management practices, which is mis-

leading and contributes to the blurred line between ReputationManagement and Public Relations.

Public Relations is just one component of ReputationManagement. Public Relations typically utilizes a number oftactics, including press releases, media outreach and speakingopportunities, to communicate what the organization doesi.e. manage financial portfolios or produce state-of-the-artcamping gear.

I s su e s Af f e c t ing Repu ta t i on Manag ement and S tra t e g i c Communica t i ons

Reputation: The Significant Shadow

S p r i n g 2 0 0 5 v o l . 5 n o . 2

Reputation and Its Importance to Civilized Society

{SEE REPUTATION - PG 2}


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Reputation Management takes communications further thansimply generating media clips. Reputation Management programsinclude tactics such as research, positioning, messaging andstrategy to communicate with an organizations key audiences.

Reputation Management aligns communications with theenterprises character and business goals; it creates andmaintains recognition, credibility, and trust. It is sensitive to anorganizations actions, and its effect on society as a whole.Reputation Management programs are empathetic to multipleconstituents, meaning not all efforts are self-serving.

In his book Reputation, Charles Fombrun exploresReputation Management at Church & Dwight, the makers ofArm & Hammer baking soda. Despite the fact that other con-sumer product companies spend more than $200 billion eachyear on advertising, Church & Dwight takes a different approach.The company believes that building direct relationships with itskey constituents creates positive impressions of the company,generates more sales than advertising, and strengthens the brand.

Church & Dwight also astutely aligns itself with social concernabout the environment. Consumers were suddenly troubled bychemical additives in household products, and Church & Dwightquickly established baking soda as environmentally friendly. Thecompanys environmental reputation is now its dominantattribute, and maintaining that reputation has served Church &Dwight well.

Managing its reputation through actions such as these, ratherthan simply promoting its products, has helped Church &

Dwight grow from $15 million in revenues in the late 1960sto a company with more than $1 billion a year in revenues.Reputation Management has not only helped Church & Dwightto grow, but has also helped define the company.

Reputation Management Education

If reputation can make or break an organization, it would followthat senior executives would be well-versed in ReputationManagement. Unfortunately, as recent corporate scandals haverevealed, this isnt necessarily the case. If company executives areto be held responsible for their companys actions and reputation,educational institutions should prepare future leaders by helpingthem appreciate the importance of building and maintaining a

strong reputation.Earlier this year, the Public Relations Society of America, togetherwith the Newhouse School of Public Communications atSyracuse University, conducted a study on ReputationManagement coursework currently available in leading U.S.MBA programs.

The study found that of the top 19 MBA programs ranked byThe Wall Street Journal survey of corporate recruiters, seven offerone course each related to corporate reputation. In contrast, 11

MBA programs offer coursework relating to social responsibilitywhile all offer courses in management communications andmarketing. Top-ranked MBA programs at schools such asDartmouth, Yale and the University of Chicago offer more than

200 marketing courses, compared to only seven courses incorporate communications or public relations.

MBA programs now have the opportunity to acknowledge thegrowing responsibility senior executives bear for their companiesreputations. In the past, these programs have responded to otherenvironmental shifts for example, they have added coursesin ethics or social responsibility in response to the scandalssurrounding companies such as Enron or Worldcom.

Reputation Management can be more challenging than PublicRelations because it requires coordination in communicationsand throughout the company itself, but the results can be morerewarding. The U.S. Federal Reserve recently noted thaintangible assets, such as brand equity and reputation, compriseas much as 47 percent of American companies net worth. Andaccording to a 2004 survey* of 800 CEOs and corporateleaders in the United States and Europe, 93 percent believecorporate reputation is important or extremely important tocustomers and consumers, and 63 percent believe it is one of thetop three factors investors assess before investing in a company.

It used to be that you could buy a loaf of bread with youreputation. The baker kept track of your daily order in his heador in a book, and at the end of the week youd pay for your purchases. Today, you pay for your baguette upon receipt, even ifyoure a regular at the neighborhood bakery. Society has becomemore hurried, crowded and transient, making reputation all themore important. In this competitive environment, its difficult to

rise above the fray. If you take a few moments to considerindividuals and companies who have succeeded, Id wager they alhave stellar reputations.

~ Megan Page

* The survey referenced was conducted by Hill & Knowlton

{REPUTATION - continued from PG 1}

Intangible assets, such as brandequity and reputation, comprise as

much as 47 percent of Americancompanies net worth.

pg. 2


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In the volatile world of politics and government, the PublicRelations profession has taken a beating in the first half of2005. The recent blurring of lines between public relationsefforts and journalism has called the ethics of the entire PRindustry into question, and has further damaged the already-shaky public reputation of the media.

More important, the blurring has highlighted how critical the pro-tection of an enterprises reputation is and how damaging brazenefforts at publicity and Public Relations can be if poorly handled.

One of the most notorious cases this year surrounds commenta-tor and columnist Armstrong Williams. Earlier this year, it wasdisclosed that Williams was paid more than $240,000 by theFederal Education Department to push President Bushs NoChild Left Behind Act. In published columns and appearanceson television as a conservative pundit, Williams failed to disclosethat he was on the government payroll or that he was a consul-tant paid to talk about the issue. Though Armstrong admitted heshould have disclosed his agreement with the EducationDepartment, the imbroglio ruined his reputation, and sullied theBush Administrations and Education Departments efforts togain positive publicity.

The incident brought a downpour of negative news storiesand columns about the Administrations efforts to spin thenews. Despite being a program that passed two years ago withbi-partisan support, whatever benefits the program had wereovershadowed by the negative Public Relations.

The blurring of lines has been at a local level as well. InMassachusetts, the states Environmental Affairs office paid$10,000 to a Boston Herald columnist to advance the officesenvironmental policies and initiatives.

Other examples abound. Regardless of political persuasion, thetrend has raised eyebrows and caused damage to reputations.Professionals need to know the difference between propagandaand communications, with sources affiliations fairly disclosed.

It is not unusual for members of the media to move to jobs ingovernment and on occasion the other way around. But thephenomenon of straddling both has caused damage to the

reputation of Public Relations, the government agencies involvedand the media that covers them. It severely damages their mostimportant assets their public trust and reputation.

The use of Public Relations in a potentially deceptive way toadvance an agenda highlights a fundamental flaw in the practice.

Public Relations in the form of publicity is a great way toenhance visibility. The problem is that it doesnt always last andthe right people may not even see it. In the cases of Williams andothers, attempts were made to spin news a certain way and essen-tially guarantee positive coverage of certain issues. The long-term

effect in all of these cases is that the paid messengers werediscredited, the enterprise pushing an agenda was disgraced andthe medias blemished reputation was further sullied.

Meanwhile, more people ultimately learned about these deceptivePublic Relations tactics. Scandal is always big news! The tacticsbackfired everywhere for everyone involved and reputations havebeen damaged. There is a danger having all media sources beingsuspect people do not know who to believe.

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1. Does your organization use its business plan as a basefor developing its communications plan?a. Yesb. Noc. N/A

2. Do your external and internal communications:a. Focus on your organizations product or service?b. Include communications about your organizations

values, goals and commitments, in addition tocommunications about what your organization does?

c. None of the above.3. Your organizations communications department:

a. Concentrates on external communications.b. Is dedicated to both external and internal

communications.c. Has no person/team dedicated to

communications.4. The following describes your organizations communi-

cations activities:a. Press releases, media and analyst relations.b. Outreach to industry thought leaders and influencers,

in addition to traditional Public Relations tacticssuch as press releases and media relations.

c. None of the above.

5. The goal of your organizations communications is:a. To generate business.b. To build recognition, credibility and trust.c. None of the above.

KEY: If you answered a to three or more questions, yourcompany practices more Public Relations than ReputationManagement. If you answered b to three or morequestions, your company practices more ReputationManagement than Public Relations.

Q U I Z : Does Your Organization Practice

Reputation Management or Public Relations?

{SEE BE CA REF U L - PG 4}

Be Careful What You Wish ForOver-Aggressive and Misguided Public Relations Can Sometimes Cause Big Headaches


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For executives who realize that their reputation is theircompanys most important asset, questionable Public Relationstactics are not an option. Instead, those executives want topreserve, protect and enhance their firms reputation, while alsoadvancing an agenda.

Reputation Management relies on research, positioning,messaging and strategy to communicate value differently to

different audiences. It helps build, enhance and communicatethe character of a company, but doesnt rely on gimmicks andpotentially deceptive tactics to achieve it.

In the long term, that leads to much better Public Relations anda stronger reputation.

~ John Lamontagne

Please visit us on the World Wide Web at: http://www.mountvernonreport.com

The Mount Vernon Report is published and copyrighted2005 by Morrissey & Company, an independent Reputation Management and Public Relations firm headquartered at121 Mount Vernon Street, Boston, MA 02108. Permission to copy and distribute is granted, provided that full attribution is given to Morrissey & Company. Furthercommentary or response to any of the topics discussed in this issue is welcome and should be directed to 617-523-4141 or via e-mail to [email protected].

Printed on recycled paper.

It takes 20 years to build a reputation and five minutes to ruin it.If you think about that, youll do things differently.

~ Warren Buffet

{BE CA REF U L - continued from PG 3}

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Reputation Advisor

Networking effectively, from informal meetings to formal pro-

grams, can help executives find new jobs, learn more about arecent industry trend or meet people. While business executivescan choose from several types of networking groups, when select-ing one they should keep in mind that networking is work, it isnot net-drinking, or net-eating, or net-sitting down and chattingwith your coworker. Networking can be arduous and timeconsuming. However, the benefits of being a good networkercan be outstanding.

There are at least six types of networking groups. Remember todiversify your activities one organization will not meet all ofyour needs. Consciously select a well-rounded mix of organiza-tions and be an active participant. Along with these options,executives can participate in networking from the comforts of

their own home or office with virtual networking opportunitiesincluding blogs and chat rooms.

Casual Contact Networks are business groups that welcomemany people from overlapping professions. These groups usu-ally meet monthly and hold mixers which encourage informalmingling. Participants are offered an opportunity to makevaluable contacts with many other entrepreneurs in thecommunity, and word-of-mouth can be built amongst fellowbusinesspeople. The local Chamber of Commerce is a goodexample of a casual contact network.

Strong Contact Networks are groups that meet weekly forthe primary purpose of exchanging referrals. Meetingsinclude open networking; short presentations by members; a

longer, detailed presentation by one or two members; andtime devoted solely to passing business referrals. This type ofgroup requires more commitment from members, as anagenda is usually set and part of each meeting may be

dedicated to passing referrals members have received duringthe previous week.

Community Service Clubs offer members the opportunity togive back to the community where they conduct business whilemaking valuable contacts, and exist primarily to serve thecommunity. However, they can also provide an excellentopportunity for business people to meet regularly and developrelationships. Rotary, Lions and Kiwanis are good examples ofa community service club.

Professional Associations consist of members from a specificindustry, such as banking, communications or legal services.These groups enable people to exchange information andideas, and form relationships with potential clients or targetmarkets. Some examples of professional associations are theAmerican Bar Association, Public Relations Society ofAmerica or the American Medical Association.

Social/Business Organizations combine social activities withbusiness or networking, giving members an opportunity tocombine work with pleasure. The Jaycees is one group that isvery focused and professional, yet allows members to combinesocial time with business.

Womens Business Organizations have been instrumental inshaping the nature of contemporary networking organizations.Most womens business organizations focus on education, pro-fessional development and networking; for many women, suchgroups can be an excellent and non-threatening way to increasebusiness. One example of this type of group is the WomensNetwork, an active and popular group supported through theBoston Chamber of Commerce.

For more information on joining networking groups, please visitwww.entrepreneur.com or Masters of Networking by IvanMisner.

~Brooke Carey

the mount vernon report spring 2005 - vol. 5, no. 2

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