the mount vernon report winter 2005 - vol. 5, no. 4

8/8/2019 The Mount Vernon Report Winter 2005 - Vol. 5, no. 4

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David McCulloughs1776 chronicles the majesty, nobility andheroism of George Washington. "His Excellency," the Generalscourageousness and zeal is equally matched by that of hisrag-tag army assembled from the four corners of the fledglingAmerican colonies.

McCulloughs book reminds us that courage comes in manyforms, and reputations are earned in many ways. He paints amagnificent and detailed picture of the band of amateur militia (many fighting with their bare feet wrapped inrags) that took on and ultimately beat the British Army andNavy the most highly trained and storied military force of itsday. Washington, that great leader of men, was the right personto lead this battle and seized the moment.1776 is a tale of determination overcoming all obstacles and improbable odds.

What these tenacious characters accomplished through theirunwavering Yankee will, we celebrate in the humble, selfless, andsingle-minded determination of another great American. RosaParks, who passed away recently, furthered the freedom won by

the Patriots for all Americans. History commemorates RosParks simple, but noble, defiant act of refusing to give up hseat on a public bus. She too seized the moment when her heatold her it was time to act.

Washington, Parks and the thousands of Americans whrose against wrong, and stood up for what is right, embody threputation of our nation and civilized humankind. As we all aasked to do right by the world and continue to fight for freedomwherever oppression lies, we too must seize the moment further the dream.

This issue of The Mount Vernon Report invites some expert voiceabout reputation management and highlights the results fromthe 2005 Massachusetts Corporate Reputation Survey. Rightlso, the Survey highlights those companies who are doing tright thing.

Knowledge is good and to act upon it to achieve somethingood is glorious.

Since the announcement this year that consumer productsgiant Proctor & Gamble was acquiring one of Bostons mostprestigious and best-known companies, Gillette, in the largestmerger in New England history, "experts" and analysts havewrung their hands in fear as Boston loses yet another symbol of its storied economic identity.

But the change may be better viewed as a symbol of thechanging nature of global economics; the merger highlights thecontinued strengths of Boston business more than it hurts theregions economic influence.

The fear around this "loss of influence" appeared this year inthe 2005 Massachusetts Corporate Reputation Survey(MCRS). In the annual survey, which polls 200 top-levelbusiness executives in Massachusetts, almost three-quarters of respondents said they believe recent mergers and acquisitionshave reduced New Englands economic influence.

The concern of business leaders follows the acquisition in recentyears of former Massachusetts-based economic powerhouses suchas Gillette, FleetBoston, and John Hancock Financial Services.

Topping the survey, as in prior years, was Harvard UniversiThe regions leading hospitals, universities and non-prohealth care providers dominated the MCRS once again. Of thtop 20 Boston-area corporations with the best reputations, onthree were for-profit enterprises.

What does that say about the state of business in Massachusetif 85 percent of the most reputable institutions are non-profitsActually, it says a lot but not necessarily that scary predictioof doom for the Boston economy are accurate.

The fact is that ''signature" companies in almost every paof the country are merging into national and internationmega-conglomerates. And that means that institutions thremain, such as Harvard University, Massachusetts GeneHospital, Fidelity Investments, and Blue Cross Blue Shiegrow in stature. Those are the institutions that Bostonians pointo with pride as symbolic of the region.

The results of the 2005 MCRS also reflect the changing naturof international economics. For instance, 10 years agMassachusetts "signature" companies would also have includ

Issues Affecting Reputation Management and Strategic Communications

Boston Exerts Influence on the Global Economy

W i n t e r 2 0 0 5 v o l . 5 n o .

Seizing the Moment

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Stop & Shop and Dunkin Donuts both of which are nowsubsidiaries of giant European conglomerates. Even the mostbeloved of Boston institutions, the Red Sox, are mostly owned bya Florida commodities trader, a Hollywood TV producer andthe out-of-state New York Times Company. Reebok, theCanton-based athletic shoe company which checked in at 24 inthis years MCRS, wont be included in the 2006 survey since itwas acquired last summer by German-based adidas-Salomon AG.

The good news is that Dunkin Donuts can still be found inalmost every town in the region, and Reebok sneakers will still beavailable just about everywhere. As in nearly every segment of the

economy, mega-corporations are acquiring properties andplacing them under one large umbrella. Many times consumersare not even aware of the corporate changes its coffee as usual.

Is the "economic globalization" a reflection of a loss of influence in the region? One could reasonably argue that theinternational and conglomerate interest in the Hubs most eliteprivate companies demonstrates instead that Boston exertssignificant economic power. Despite high housing and laborcosts, the Massachusetts economy is attractive to major investors

and thats because of the very institutions that top the MCRS.

With outstanding schools and health care facilities, start-ups andcorporations seeking well-educated employees will locate in theregion. This is a major reason why high-tech, biotechnology andlife sciences sectors are generally thriving.

What are the "next" for-profit Massachusetts corporations thathope grow their reputations to the extent that they are consideredelite? Already Staples, the office supply retailer, has cracked thetop 10 of the MCRS. The top 30 corporations include CitizensBank, BJs Wholesale, Fidelity, Reebok, Yankee Candle, StateStreet, Raytheon and Lojack.

Emerging companies include financial service corporatPutnam Investments and Massachusetts Mutual Life Insurantech companies EMC and Iron Mountain, biotech compaBoston Scientific Corp., discount retailer TJX Companies, consulting experts Charles River Associates (CRA).

Can these companies become a part of Bostons "reputation elWith steady reputation management, community outreach amore, perhaps one day they will. But because of the strengttheir reputations, the regions finest schools, hospitals and nprofits will likely be leaders for many years to come in the eyeexecutives and regional residents. The schools churn out leaexecutives, are at the heart of the research and developmentechnology and thought leadership, and are extremely active in communities, conducting broad communications and outreach.

Those "reputation leaders" will continue to draw innovato

entrepreneurs and business pioneers to the region.Massachusetts economic identity isnt disappearing. Like eregion in the country, its simply becoming part of the gloeconomy.

For detailed results and methodology for the 2005 MCRS, gowww.reputationsurvey.com. ~John Lamontag

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Current Business Conditions in MassachusettsC-level executives are more optimistic about current businessconditions in Massachusetts in 2005 than 2004. There was anincrease in the number of respondents who felt the conditionswere excellent from 2 percent in 2004 to 6 percent this year. Moreexecutives felt the business conditions are good (52 percent in2005; 50 percent in 2004) and fewer respondents felt that

conditions were only fair or poor.

Influence of Mergers and Acquisitions in MassachusettsMost business executives indicate that recent mergers and acquisi-tions in Massachusetts reduced New Englands economic influencein both the U.S. and world economies to some degree. One-half of respondents say recent mergers and acquisitions in Massachusettshave reduced New Englands economic influence either a lot (14percent) or somewhat (36 percent). About 19 percent say mergersand acquisitions have reduced the regions economic influence only alittle, while 18 percent say they have not affected the influence at all.

0% 5% 10% 15% 20% 25% 30% 35% 40%

Not Sure

Not at all

Only a little

Somewhat

A lot

14%

18%

19%

36%

14%

2005

2004

60%

50%

40%

30%

20%

10%

0%Excellent Good Only Fair Poor Not Sure

2005 Massachusetts Corporate Reputation Survey:Overall Rankings

The highest possible reputation score was 100. For analyticalpurposes, a score of 60 or higher should be considered a superior reputation, a score between 50 and 60 should be considered verygood, a score between 40 and 50 should be considered good, anda score below 40 can be interpreted to mean that theinstitution has not established a significant reputation for itself.

O R G A N I Z AT I O N

1 Harvard University

2 Boston University

3 Childrens Hospital

4 Tufts Universi ty

5 Brigham and Womens Hospital

6 Massachusetts General Hospital

7 Boston College

8 Northeastern University

9 Blue Cross Blue Shield of MA

10 Staples

R E P U TAT I O N S C O R E

71.133

69.775

67.786

67.095

66.128

65.179

65.158

64.200

63.395

63.314


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Wisdom from a Reputation Management ExpertRon Alsop, Editor and Senior Writer for The Wall Street Journal and author of "The 18 Immutable Laws of Corporate Reputation: Creating, Protecting and Repairing Your Most Valuable Asset," recently spoke at The PR Dinner Group,a monthly gathering of public relations executives from leading institutions in

the Boston area. The following is an excerpt from his presentation on reputationmanagement:

Whenever I had an article about corporate reputation inThe Wall Street Journal , I was struck by the number of corporate managerswho contacted me and confessed that they werestruggling to understand the reputation management process.I heard from consumer-products marketers, banks, PR agenciesand others. They didnt understand how to define reputation,how to measure it, and most important, how to manage it. Thesenior vice president and director of corporate communication atPNC Financial Services Group wrote to me in an e-mail message:"Im sharing your package of articles with all of my advertising

and PR colleagues here as we wrestle with the factors that impactreputation and what to do about it."

In fact, it was three years ago that I received a phone call from acommunications manager at Merck in response to an article Ihad written on reputation. We agreed to meet in Manhattan todiscuss further some of the points in my article about ways tostrengthen a companys reputation.

During our conversation, she surprised me a bit with her bluntcomment that the pharmaceutical industry was in danger of becoming as much a target of the publics wrath as the tobaccobusiness.

At the time, I dont think either of us realized just how propheticher comment was and how quickly the drug industrys reputationwould worsen. But just this past year, weve seen intensifyingpublic concern about the safety of drugs as Merck becameembroiled in the Vioxx crisis, GlaxoSmithKlines reputation tooka pounding over Paxil, and Eli Lillys image came under attackin an erroneous medical journal article about Prozac. And of course at the same time, anger over prescription drug prices hascontinued to mount.

I would say that the pharmaceutical industry is now beset withone of the worst images in all of corporate America and thatit demonstrates so clearly how valuable and vulnerable reputation is. It also illustrates the perils of not being morevigilant and proactive in trying to strengthen your reputation.

Only after the industrys reputation reached this low point didmost companies finally wake up and start doing things likeoffering free or discounted prescription programs for thelow-income, creating employee ambassador programs forcommunicating their side of the drug cost issue to thecommunities where they do business, and perhaps mostsignificantly, reining in their aggressive marketing programs.

I dont believe that most of the pharmaceutical companies, wthe exception of Johnson & Johnson, or most companies in industry for that matter, apply reputation management practiin a consistent manner. In this era of instant communicatio

corporate blogs and other new media, companies need a full-treputation guardian more than ever.

More than ever, the public craves sincerity from its instituti Wall Street, corporations, government, even churches. Apeople are ready to pounce at the first sign of insincerity.

Unfortunately, many companies trumpet their good deeprecisely when the public is least receptive. Recently, for examMerck began a new ad campaign to try to repair its reputatiCommercials declare that "patients come first" and highlightprograms to provide the needy with prescription drugs freecharge or at reduced cost. But it may be too little too late, gi

the heightened public skepticism about the drug industry athe lawsuits over Mercks controversial Vioxx medicationparticular.

Such ill-timed expressions of social responsibility dont juson deaf ears; they can harm reputation further.

Are any companies considered sincere in this cynical era? Amthe companies with the highest scores for sincerity in the annreputation ranking we publish inThe Wall Street Journal were UPSCoca-Cola, FedEx, Honda, General Mills, Procter & GamDell, and Johnson & Johnson, which also has been No. 1 in overall ranking for six straight years.

Although baby powder and other infant-care products makean increasingly small part of the pharmaceutical companys sthe wonder of babies remains the focus of its corporadvertising. Recent ads continue to charm consumers with theme, "Having a baby changes everything."

"We are and always will be, first and foremost, known as baby company," Andrea Alstrup, J&Js corporate vice presifor advertising, told me. "This comes from the emotional aeveryday experiences people have with our products. Tremember the fragrance of Johnsons Baby Powder. Tremember bathing their babies. This reminds consumers thatat J&J understand the mother-infant bond and the importan

of families."That said, Johnson & Johnson worries that people will eventustart linking it more to pharmaceuticals than baby products ait will lose some of that valuable emotional appeal.

When it comes to sincerity, companies like J&J are exceptions. Many people find companies advertising corporate communications hypocritical. On average, only

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percent of survey respondents give companies a positive ratingfor sincerity in their communications. And the most memorableadvertising is seldom considered most sincere.

Its pretty clear that a cynical public will see right through youtoday if they dont believe you walk the talk. As Bill Weldon,the CEO of Johnson & Johnson, told me when I was writingmy book: "The loss of confidence in the business communityhas really turned the tables. Now its almost like youre guiltyuntil proven innocent."

What lies ahead? I see companies taking steps to be morehonest and transparent. Even the pharmaceutical industry, aftermuch negative publicity, is now publicly disclosing results fromALL drug trials, whether the results were positive or negative.

And I also see that companies with enviable reputations wantmake them even stronger. FedEx, which typically ranks amothe top 10 companies in reputation studies, has gone so far to base CEO Fred Smiths bonus on the companys reputatio

And if that doesnt work, FedEx has another idea for boostiits reputation ranking. At a conference in New York where I wa speaker, the director of corporate communications at Johns& Johnson referred to my book and its focus on how thcompanys reputation benefits so immensely from peoplemotional connection to its baby-products business. At thpoint, his counterpart at FedEx spoke up and said that FedEhad finally figured out how it could beat J&J in the newmedias annual reputation rankings: Start delivering babies.

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

The Mount Vernon Report is published and copyrighted 2005 by Morrissey & Company, an independent Reputation Management and Public Relatat 121 Mount Vernon Street, Boston, MA02108 . Permission to copy and distribute is granted, provided that full attribution is given to Morrisscommentary or response to any of the topics discussed in this issue is welcome and should be directed to617-523-4141 or via e-mail to peter @morrisseyco.com.

Printed on recycled paper.

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Reputation Advisor: Managing YourOrganizations Reputation from the InsideWith effective communications, employees can maintain, supportand protect an organizations reputation.Employers and employees should consider how their actions, bothin the work place and in the public eye, can affect their companysreputation. The following points are a few tips to consider whentrying to best maintain or improve your companys reputation:

FOR EMPLOYERS: Practice Transparency in the Workplace. Provide your

employees with as much information as possible on keydecisions that are made by the company and seniormanagement, and explain to employees why certaindecisions are made.

Establish a Proper Flow of Communication.Encouragetwo-way communication from employees and make surethat they are getting the information they need. Opencommunication is the key to preventing misunderstandings.

Encourage Employees to Understand Your CompanysValues and Ethics. Clearly communicate your companysvalues and ethics to all employees. Make certain that seniormanagement follows these guidelines to set the standards forother employees.

Understand Your Employees Perceptions.Develop a toolto measure employee perceptions of the companysmanagement, culture, and values. The feedback will helpto address internal issues before they become problematic.

FOR EMPLOYEES: Dress Appropriately. Your appearance on the job reflects

your personal style in the context of the office cultureand the nature of your job. Think about your company,coworkers, clients, management, and your position lookaround your office and pay close attention to how others aredressed.

Speak Professionally.While at work, always make sure thatyou are speaking in a professional manner. Avoid using slanand making careless grammatical mistakes. Save privateconversations for outside of the office.

Represent Your Company Positively in Public.Alwaysremember that when you are in public, anything you say canbe heard by someone else. Avoid speaking negatively aboutyour company or discussing confidential company-relatedmatters in public.

Make Ethical Decisions Be Honest!Follow yourcompanys ethical guidelines. Dishonesty can tarnish thereputation of you and your company. If a coworker is beingunprofessional, bring it to a mangers attention. A coworkerbehavior can reflect negatively on you and your companysimage.

Do not go where the path may lead, go instead where there is no path and leav~ Ralph Waldo Emerson

the mount vernon report winter 2005 - vol. 5, no. 4

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