By Stephanie Fierman

Larry King held a two-hour telethon on June 21 to raise funds for those impacted by the BP oil spill titled “Disaster in the Gulf: How You Can Help.”

Am I the only one who doesn’t quite understand this?

It seems uncontested that the spill was caused by a commercial entity that everyone agrees is responsible; that the U.S. government has vowed to hold said entity to its promise of paying for the clean-up and for losses incurred by all affected parties; and BP itself has agreed to do same.

Now I’m not making any claims as to whether BP will or won’t actually do this (or that its version of reimbursement would be agreeable), but this telethon wasn’t saying “We know BP’s 100% responsible, but we don’t believe it’ll come through so we’re doing this just in case.” It was just your regular old telethon to raise money.

So why? Why are we raising money? Why are television watchers being prodded by their favorite celebrities to donate?

Larry King said that “the point of this effort is to get immediate relief to the people and wildlife who (sic) are in urgent need,” and that “the telethon’s proceeds go directly to relief organizations.”

OK, fair enough.  As Mr. King noted when you are out of work you don’t need help tomorrow, you need help today.  But here’s the Reputational rub, if you will. Isn’t BP tasked with providing “immediate relief?”  Doesn’t BP need (and want) to find ways to help the people thrown out of work. One worries for our global business trustscape when a major company is cast in the same light as, well, a hurricane.

I also worry that, in a perverse way, that this kind of giving makes us immune – numb – to disaster and tragedy. Something happens? No need to look too closely: let’s just raise money. Let’s get a bunch of stars to look soulfully into the camera and ask for cash, while we view a dying, oil-blackened bird in split screen. Haiti six months later is still a major scale human disaster, though the media lens and the public have moved on.

And I worry that this makes Americans feel as though we’re doing something – we sent in our $20 bucks, therefore we are good people who care and we can move on. But can we? Are we doing any of the heavy lifting that could actually help managers improve risk management to avoid future outcomes, or to really help the people impacted recover? What does it mean when individuals appear to be picking up the slack for a global corporation?

And I worry, too, about the effect on our collective sense of organizational responsibility. How does this phenomenon impact a company’s commitment to building trust in the marketplace?

It’s easy to pound one’s chest and demand that “those responsible” do more, but I would suggest that, by our own actions, the public may be empowering these same responsible parties to do less. There’s no guidebook that tells an organization exactly what reputable and trustworthy behavior is – society does that. Stakeholders – like you, me and Larry King – do that.

Where do we want to set the bar?  In the midst of a crisis as big, bad and complex as the Gulf, sometimes it’s hard to tell where the bar even is. That said, on one thing, at least, everyone agrees. Help is needed in the Gulf.

For the first time in quite a while, the Marketing Executives Networking Group (MENG) is opening up one of their exclusive webinars to non-members. We’ll be the presenters and our readers are free to join. See Below.

If your management hasn’t asked you what steps the company is taking to improve its ability to manage reputational risk, chances are they will. Risk of all kinds has climbed to the top of management and board agendas and reputational risk ranks within the top ten of CEO concerns.

If past experience is any indicator, 10% of the Fortune 1000 will have a severe reputational event over the next decade that costs them 25% or more of their share value. Worse, virtually every organization today is unequipped to fully manage, measure and monitor the “reputational defects” that occur daily across their operations -contributing to what is the lowest trust environment in a century.

Fortunately new ideas and performance-based practices are emerging.

JOIN MENG ON THURSDAY, APRIL 22nd AT NOON EASTERN TIME FOR…

SECRETS TO AVOIDING THE 7 DEADLY REPUTATIONAL MISSTEPS
Open to Non-Members
Practical New Rules & Strategies to Help Management Teams Reduce Reputational Risk and Improve Corporate Performance

APRIL 22, NOON ET

Jarvis Cromwell and Jerry Doyle bring years of experience to the topic and have consulted to and worked for the highest levels of corporate, government and nonprofit management. They will explain how the environment has radically changed in recent years and offer new techniques that you can begin applying immediately. Learn what the 7 deadly missteps are – so you don’t make them!

by STEPHANIE FIERMAN

Here at the Garage, we believe that a more measured approach to bank and investment advertising is probably a positive development.

After all, hadn’t all the ads begun to look the same? Could every company and every investment have possibly offered the best return, and the most Morningstar stars, and the biggest retirement homes in paradise? Unlikely. Outside of just a few stalwarts, such as Vanguard with its slow-and-steady point of view and Bogle-esque approach, many of the siren calls in the newspaper, on television and online had all taken on a surreal and undifferentiated patina. That’s not effective.

Now it appears that all the bulls have stampeded in the opposite direction.

Consider the list of firms advertising in one issue of The Wall Street Journal this past week, along with text pulled verbatim from their ads: Continue Reading

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.

In the wake of well-publicized poisonings from pet food, toothpaste and drugs, China is now widely believed to have a food safety problem.

And the “Brand China” trust problem threatens their place in the global supply chain. Do you find yourself checking the country-of-origin labels in the fruit and vegetable section at Costco? In the same vein, one wonders how long it will take for pet food brands to begin touting “all-American made” ingredients.

What’s happening in China highlights a key principal applied by the Trustmeisters here in the Reputation Garage: Trust problems are at their heart organizational performance issues. To mitigate the risk of a serious trust event, you must put reputation into a performance management framework – managing it with the same rigor applied to other performance issues, such as quality and cost control.

And, yes, China is taking action. Step one in their trust recovery program: Show that you are serious about the corruption that led to the problems, in this case by sentencing to death the head of your food and drug oversight organization. To maintain decorum, we’ll give no comment on this one, but we could! Step two: Increase public protection by setting up a national food recall system. Step three: Communicate concern and your willingness to work and dialogue with interested parties across the global community.

China’s fix is of course reactionary – these are moves taken to dampen an escalating crisis of confidence amongst both producers who source in China and their downstream consumers. It will take months and years before the effectiveness of any changes is known.

The more important question for would-be brand Trustmeisters is this: How confident are you in your ability to police the behavior of your overseas suppliers? If the answer is “not very,” then be prepared for some potentially nasty consequences.

Just look at the impacts of the recent crisis on the U.S. pet food industry:

1) A costly recall.

2) Announced programs (expensive ones presumably) by some companies to test all of their ingredients.

3) Widespread bad publicity that has not only damaged brand trust, but also alerted consumers to the fact that many pet food brands are really just re-marketers of the same globally-sourced ingredient mix. This will likely send more pet food brands into the off-price commodity bins at places like Wal-Mart.

4) According to today’s Wall Street Journal, weaker companies may not survive this crisis, and we should expect to see further consolidation in the pet food industry as stronger players capable of imposing more rigorous quality control gobble up the also-rans.

A word to the wise: China’s recent problems will not be the only road bumps over the course of what many economists are calling China’s century. Which is why we never tire of saying it: Hope is not a strategy. If you haven’t put the issues of trust and reputation into a performance management framework, what are you waiting for?