Reputation: With or Without You

Reputation: with or without you

An MSLGROUP EMEA Survey Five principles for building and protecting your reputation in the “always-on” world

Contents

01 02 04 06 10 12 14

Introduction

Here in EMEA at MSLGROUP, we are fortunate to work with some of the region’s largest companies on complex and challenging business assignments. Our clients’ universe – along with ours as consultants – has changed significantly over the past few years. The dot-com era forced businesses to adapt to the disruptive commercial impact of the internet, and now companies are being forced to react to the equally disruptive communications impact of digital and social networks.

Introduction

Survey Methodology/ Executive Summary Part 1: Increased scrutiny of communications at board level Part 2: Embracing and adapting to the “always-on” landscape Part 3: Changing teams/ changing culture Part 4: Empowering employees to become external advocates

Summary & recommendations About MSLGROUP MSLGROUP builds and protects our clients’ brands, reputations and relationships by helping them to be more INFLUENTIAL in the big, non-stop conversation – both inside and outside their organisations. We help them to influence the right people at the right time, in the right way. It’s part art, part science. It takes continuous insight, ideas and action. It takes people, process, creativity and technology working together relentlessly.

Anders Kempe President, EMEA MSLGROUP

Instead of occupying the commanding heights of communications alongside the media, companies are now swimming in a sea of new voices, each one posing a potential threat to reputation – and the bottom line. Add to that the rapid increase in the pace of communications and businesses are faced with an extremely high-risk environment.

It is also a time of tremendous opportunity for companies courageous enough to grasp the nettle.

Companies are waking up to the reality that the debates about their business and brand will happen with or without them, and so it’s in their interest to engage.

With this report we set out to answer two basic questions: can organisations adapt to managing their reputations in this “always-on” world? And if so, how?

It’s always good practice to step back, observe your surroundings, and adjust your approach. This study should help our clients to navigate the risks, seize the opportunities and advise their own boards and communications colleagues.

We have certainly found it valuable.

We are confident you’ll find insights in this report that will help you to navigate the “always-on” world and build the stronger reputation and relationships you’ll need to achieve your business goals.

Sincerely, Anders Kempe President MSLGROUP EMEA

For more information on the full survey please contact andrew.macdougall@mslgroup.com

An MSLGROUP EMEA Survey

01

Survey Methodology

To gauge the views of senior communications managers at 100 top organisations in EMEA, MSLGROUP developed a survey with a mixture of open and closed questions targeted to their experience in dealing with communications and reputational issues. The surveys were conducted across EMEA markets in person or over the phone between 13 January, 2014 and 24 June, 2014. A full list of the companies interviewed appears below.

Quantitative questions were analysed according to the data, with the descriptive supplement answers providing insight into the thinking behind the quantitative answers. The qualitative answers were in general clustered in order to ascertain any common themes across companies.

When analysing responses, percentages are shown out of the total respondents for that question, as this is not always the full 100 companies interviewed.

Many interviews were conducted in local languages and have been translated into English for the purpose of evaluation.

MSLGROUP would like to thank all of the companies who participated in the study.

To receive a copy of the full survey please contact victoria.sugg@mslgroup.com Interviewed organisations Individuals from the following organisations were interviewed in markets across EMEA. 3M Italy Alcatel-Lucent Algol Group APR Energy AstraZeneca BAE Systems Banque Populaire BASF Bech Bruun Law Firm British Land BUPA Carrefour Celesio Chr. Hansen Coloplast Commerzbank Continental AG Discovery Communications

Djøf EY DNA Ltd Danish Broadcasting Corporation Egmont EMC Ericsson European Parliament Finnair Friskolornas riksförbund FTF GSK H&M Hartwall HJ Heinz IKEA Group INFARMA Investor

KPN Telecom LähiTapiola LEGO Lundbeck Maggi Magneti Morelli McDonald’s Neste Oil Norges Pelsdyralslag Northland Resources Norwegian Bar Association NS, Dutch Railways OGEO FUND Pioneer Pekao Investment Management Praktikerjänst Raadhusgruppen Randstad Holding Renault

RWE AG Rynkeby Food Sainsbury’s Saint Gobain Santander UK Siemans AG Spicerhaart Sportmaster Standard Chartered Bank Stroili Oro S.p.A. Suomen Terveystalo ThyssenKrupp Steel Europe UNIFY Italy Unilever Union Investment TFI UWV (Dutch Employee Insurance Agency) VR (State railways) ZF Friedrichshafen

Executive Summary

The free flow of digital information and the transparency brought about by social media have increased both the number and pace of conversations about brands and business.

It’s a lot busier and faster out there.

Companies are adapting to this “alwayson” communications environment and the relentless threat to reputation – and the bottom line – that it represents. Bad news travels faster than ever, while good news is often drowned out in the news stream.

The “always-on” communications reality has placed a premium on content. In addition to regularly planned events and launches, companies now need high-quality, relevant content to sustain the ongoing conversations that are happening on digital and social channels. This has implications when planning communications campaigns.

As a result of this new “always-on” reality, communications is receiving more attention than ever at board level.

Companies are therefore looking internally to mine more content and are up-skilling and engaging their employees to become brand ambassadors, instead of relying solely on designated external communicators. But there exists significant uncertainty over how best to do this.

This shifting communications landscape – and the heightened risk to reputation – has also necessitated a change in approach and a change in the structure and culture of communications teams.

In a world of more voices and more conversations, how should businesses harness the (often untapped) power of their own employees to better tell their story and build the company’s reputation?

In sectors with significant regulatory restrictions or more conservative cultures (e.g. pharmaceuticals or banking), vigorous debates are being held about how to best navigate this new environment.

In a world drowning in content, how do companies produce content that is relevant, interesting and influential?

Within companies, there is a flux in both structure and culture. Superb subject-matter expertise must now be married with expertise in the distribution of content across entirely new technologies and channels. More seasoned professionals haven’t yet fully embraced or understood the possibility of digital and social, while the “millennials” can’t picture their world without it.

In a world of endless conversation, how do you focus the discussion around your brand or business and drive sales?

Please note: A number of companies who participated in the study declined the opportunity to be named.

02 An MSLGROUP EMEA Survey

An MSLGROUP EMEA Survey 03

Increased scrutiny of communications at board level “

There is an increased understanding of the role communications plays, both internally and externally, in building the reputation

of the company.

Kerry O’Callaghan VP, Global Brand Communications and Government Affairs, GSK

Key Findings

85% 70% 86%

“ It’s extremely important that you don’t just move in your own little world, but are open and receptive to doing something else.

Head of Communications and Government Affairs of a global technology company

“

Reputation has always been serious.

There is heightened focus on reputation and awareness nowadays due to the accessibility of information to consumers.

Christine Diamente Head of Brand and Corporate Sustainability, Alcatel-Lucent

The MSLGROUP take Digital and social channels have quickened the pace of conversation and have eliminated the barriers to debate. Companies and the “traditional” media no longer control or mediate the discussion. While not all online debate is necessarily important or impactful, companies must be vigilant and monitor the discussion and engage where appropriate to ensure any negative impact on reputation is caught early and addressed.

The study shows that within the new “always-on” media landscape, reputation functions as an important business characteristic and plays an essential role in contributing to

business performance. The new media landscape has also impacted how companies measure and evaluate reputation. We can see that companies are on their way to incorporating their social and digital media activities into their reporting metrics on reputation. From a reputation perspective, companies are beginning to treat feedback through social and digital channels as equivalent to feedback through more traditional instruments such as research or media coverage.

of companies agree or strongly agree that the reputational consequences of their mistakes have become more serious

of companies said more consideration is now being given to communications at board level

of companies are thinking about different approaches to building their brand and reputation

Reputation is quickly becoming a key indicator of business success.

The majority of companies surveyed agreed with the statement that reputation can bring a positive or significantly positive impact on how well a company does business wise.

However, of the companies who view social media as an “opportunity”, 23% explicitly added, without prompting, the caveat that this is only the case when social media channels are managed appropriately and with a certain degree of caution.

and establish more “sophisticated” tools such as RepTrack as a measurement instrument in order to capture the new breadth of conversations happening around their businesses.

The Business “Take Out”

Respondents also indicated that the reputational consequences of company errors or crises are now regarded as more severe, given the ability for bad news to spread quickly via new digital and social channels.

The heightened reputational impact of social media is one of the reasons why a solid majority (70%) of respondents said more consideration is now being given to communications at board level.

Board attention has also prompted companies to consider new ways to build their brand and reputation, although interestingly only a minority of respondents indicated that digital and social media would play a role in those efforts.

Careful monitoring can help flag problems before they metastasize into business-disrupting crises, and accurate metrics from these reporting regimes can help inform board discussion on reputation and positioning.

Despite the risks social media presents to reputation, a significant majority (79%) of those surveyed view social media as a clear opportunity. Only 5% viewed social media as a clear threat.

As a result of this increased scrutiny, several companies stressed that they intend to adapt the way they report on reputation. Some firms, for example, intend to move away from only analysing media coverage

04 An MSLGROUP EMEA Survey

Design a robust online monitoring and analysis regime to engage in the conversations that are happening around your business or brand.

An MSLGROUP EMEA Survey 05

Embracing and adapting to the “always-on” landscape

Types of content companies are producing more of versus two years ago 34% 30% 13% 12%

of companies produce more content than two years ago

11%

“

I believe that the time of “shiny and polished brands” is over. Now it’s more about stories.

It’s the little things that build the brand.

You need to be able to tell interesting stories about your services.

Aku Varamäki Social Media Manager, Finnair

“

If social media didn’t exist, you’d be trying to invent it.

Alex Cole Director of Corporate Affairs, BUPA

Key Findings A majority of respondents indicated their approach to communications had fundamentally changed because of the rise of social media. Instead of broadcasting to their audiences via paid and owned channels, they are now increasingly engaging in conversations with stakeholders online.

To monitor and respond to these conversations, a strong majority of companies have some form of social media listening or early warning systems in place to mitigate risk, or have processes in place to manage real-time interactions.

74%

of companies have seen their approach to communications change fundamentally due to the rise of social and digital media

74%

have transitioned from broadcasting to engaging in ongoing dialogue with their key stakeholder audiences

The Rise of Content With the rise in the use of social media comes an increase in the need for content to populate social and digital channels. To build and defend reputation, companies are now generating richer – often highly visual – forms of content to sustain conversations across multiple channels.

In the survey, 88% of companies indicated that they produce more content than they did two years ago.

There is also a clear trend in what types of content are being created and shared on social channels, with companies being more likely to produce short, easily-digestible content for their social channels, rather than longer-form blogs and thought leadership pieces.

88%

Videos Pictures & infographics Brand content/storytelling Blogs & thought leadership News & press content

“ Writing and creating

content tailored to each of our target audiences can be a challenge and typically requires a good bit of time and resources.We have a content producer on staff, supported by other team members who write and provide inputs, and this helps us maintain focus on our content marketing objectives and activities.

“

We are still trying to find a balance between what we produce, at what cost, and what it is people want to hear about us.

Head of Communications of a national beverage company

Silvio Cavaceppi VP Marketing & Communications PR, APR Energy

A Difficult Harvest Despite facing a pressing need, many companies are finding it difficult to find, collate and publish content. The factors that stand out from the survey as hampering content publishing are time and budget, as well as format and tone.

“

We don’t find content too difficult to find.

We’re a broad business and there are lots of people with interesting things to say.

The challenge is often getting this content into good enough shape for publication.

Tim Baxter Global Head of Communications & Corporate Affairs, Standard Chartered Bank

06 An MSLGROUP EMEA Survey

An MSLGROUP EMEA Survey 07

Embracing and adapting to the “always-on” landscape Do you find it difficult to find, collate and publish stories?

58%

42%

“

There are all sorts of legal considerations.

We are looking at how to use our digital and social channels in ways and areas of the business that aren’t bound by our regulatory requirements.

“ It’s about lighting

beacons, not setting off fireworks. We’re trying to create communications initiatives that last longer.

Tim Baxter Global Head of Communications & Corporate Affairs, Standard Chartered Bank

The MSLGROUP take As we all know, the rise of digital and social media has changed the way companies approach communication. In addition to more traditional communications events like product launches and quarterly or annual results, companies are also staging lower-threshold events in order to stay active in the 24-7 news stream.

From broadcast to conversation

Do you encourage staff to take time to do this?

26% 74%

Yes No

Armed with content, companies indicated that they have now started using digital and social channels to deepen their engagement with stakeholders.

However, the survey found that not all audiences respond equally well to digital and social engagement. While respondents indicated that the value of using social media was evident when dealing with employees, customers

and the media, quite a few responded that its value was less apparent for other audiences, including analysts, investors and policymakers.

Companies have taken a number of approaches to curing their content headache1, from hiring content marketing experts and ex-journalists, to engaging outside firms. Collating, qualifying, and sequencing content in a robust content calendar that supports corporate and brand narratives will remain a priority for the coming year.

There was also some conservatism within sectors, with highly regulated industries like pharmaceuticals and finance indicating they saw limited upside in engaging with their stakeholders over very public social media channels.

“

A number of respondents in highly regulated sectors like finance and healthcare cited their regulatory obligations and/or ability to move markets as reasons to limit their activity on these new channels.

Other firms in these sectors cited an overall cultural conservatism toward external communication.

For those who do participate actively in social media, the positive effect the “always-on” conversation has had on a company’s stakeholders’ ability to understand the company’s values is more pronounced for some stakeholder groups than others, notably less so for analysts, investors and policymakers.

The Business “Take Out”

Marry deep subject matter expertise with technological savvy and then experiment with tone and approach across channels.

We are not just senders of messages but we must now accept criticism and respond to our customers.

Thierry Bouvard Head of Sector Editorial Programs and Sponsorship, Banque Populaire

http://mslgroup.com/insights/2014/curingthe-content-headache.aspx

1

08 An MSLGROUP EMEA Survey

We have a much closer relationship with compliance. Because we are a financial services company we need to be very careful with what we say on social media and that’s why, when it comes to financial products, we tend to use traditional media to communicate product information.

Jonathan Akerman Senior Strategic Communications Manager, Santander UK

Kerry O’Callaghan VP, Global Brand Communications and Government Affairs, GSK Yes No

“

Companies need both a deep subject matter expertise and an intimate familiarity with digital technology to succeed in the “always-on” environment. The new digital and social channels allow for flexibility in tone and approach, and companies should take calculated risks in how they communicate their business or brand in this new environment. While not every initiative will be perfectly on-brand, the approach will feel more genuine to consumers or partners.

An MSLGROUP EMEA Survey 09

Changing teams/ changing culture

“

Traditional communications are performed by many employees in our organisation, but few through social media. I think we will need to have a change in culture to empower communication in social media as well.

“

The company’s mind-set is fundamentally changing. I have a team that used to own their own channels and operate in silos – people now have to think differently.

External Communications Manager for a global pharmaceutical company

The MSLGROUP take

Tim Baxter Global Head of Communications and Corporate Affairs, Standard Chartered Bank

Key Findings The survey shows that companies are beginning to review the internal structure and make-up of their communications teams in response to the change in communications output (i.e. more content across more channels) and reputation management. While some communications teams are growing, the majority of companies surveyed are not putting their emphasis on increasing the size of their teams.

Several companies highlighted the need for hiring focused on content generation and not simply social media expertise. Others are concentrating on attracting channel and technology specialists and experts. For these companies, the focus is ensuring that the team has the right capabilities. In some cases, this means hiring younger staff who are more comfortable with social and digital media, in other cases this aspect of communications is outsourced.

While some companies have not yet changed their teams or activities, most see the opportunities and benefits of doing so and are either in the planning phase for change, or lack the manpower and expertise to move ahead with changes at the present time.

Personnel aside, the survey finds that companies are coming across a number of cultural and organisational barriers when trying to adapt to the needs of the new media landscape and meeting the demands of the always-on conversation.

A number of companies indicated that their IT systems were lagging behind and that they simply didn’t have the mobile technology necessary to continuously engage with the new channels. Some respondents didn’t feel they had significant enough buy-in from senior management to proceed with staffing changes to cover off the new channels.

“ I do not advocate a

separate social media department or division. In future, all communicators will have to be more “savvy” and have a good understanding of the various communications channels.

Marc Binder Group Communications Director, Celesio AG

“ The pressure for change came from… different directions: in addition to communications, HR noticed that young employees had new expectations.

Heli Järvinen Communications Manager, Algol

10

An MSLGROUP EMEA Survey

Respondents were asked to rank from 1-6 the greatest cultural or organisational barriers they experienced in meeting the demands of the always-on conversation

01

Capability (staff)

02

Resource (staff)

03

Culture (organisational)

04

Technology (equipment)

05

Leadership (by a CEO)

06

Risk Management

In order to fully utilise this comparatively new medium, companies are prioritising capability in social and digital media, as well as in content production. This has often meant bringing in younger staff who have grown up with digital and social media.

With a majority of senior level communications staff having entered professional life well before the advent and rise of the new channels, there is a clear split in familiarity, perceived utility, and capability with digital and social media. These two poles will eventually converge.

It is also clear from the survey that companies need to invest in talent from a resource perspective as well as from a capabilities perspective.

To that end, we see most companies adapting their teams or appointing external agencies to handle the bulk of social and digital communications in tandem with their internal teams.

The Business “Take Out”

Knock down internal silos and embrace the quicker pace of communications in an environment of increased transparency.

All departments are now potentially outward facing.

Mastering communications in the “always-on” environment will require a united front across external, internal, customer service and investor communications.

Veterans can mentor new employees in substance, while younger employees can instruct more seasoned colleagues on the merits and particulars of the new communications channels.

An MSLGROUP EMEA Survey

11

Empowering employees to become external advocates

“

What has completely changed is the circle of communicators. This not only includes the people in my communications department, who are communicating with a broad coverage and were hired to do that, but also everyone in the company, who today are able to communicate with this wide reach and do so, as well, both privately and at work.

“

Internal and external communication are continually merging because, either privately or (at work), employees are able to send what they feel, think, and say in the company around the world.

Head of Communications and Government Affairs of a global technology company

Head of Communications and Government Affairs of a global technology company

Key Findings To the question of whether it was good in theory to empower people outside of the communications teams to communicate, companies were fairly supportive.

The survey found that 77% of companies think empowering individuals outside the communications team to communicate externally is a good thing. One quarter consider it a bad thing or express resistance when it comes to encouraging their employees to communicate about the company externally.

Is empowering individuals outside the communications team to communicate externally a good or bad thing?

23% 20%

57%

Good Bad Overall good but with restrictions 12

An MSLGROUP EMEA Survey

That said, companies are still hesitant to grant their employees a licence to comment on social channels in an official capacity:

75% Limit external communications using social media to certain authorised people

9%

Embrace contribution from others, although contributions could be vetted or employees trained first

7%

Allow all employees to communicate externally about the company without any measure of guidelines or oversight

Most companies underline that there must be clear guidelines and restrictions on how employees can communicate about the company they work for.

A number of companies pointed out the importance of educating not just the core communications team, but also the wider network of employees.

This can be in the form of formal training, or through company social media guidelines.

“ I think that engaging

employees – experts in their fields – in external communications (also in social media) may be profitable and poses a great value in building a brand’s position and reputation.

Head of External Communication and Public Relations of a multinational retailer

“ All LEGO employees

communicating with consumers via social platforms require an internal Social Media Driver’s Licence.

Preben Møller Brand Director (EU), LEGO

“ Letting employees who are not members of the communications team participate in the company’s external communications leads to loss of control over the content.

Head of Marketing and PR for a multinational clothing retailer

The MSLGROUP take Employees are now increasingly aware, interested and involved in the internal and external discussions happening around their brands or businesses thanks to digital and social channels. A company’s successes or failures can reach employees quickly and without context.

A majority of the respondents cited the need for clear social media guidelines. Others cited specific training courses their employees must complete before being allowed to contribute on digital or social channels.

Among the respondents there is an understanding that employees must have a role if companies are to sustain and engage in the conversations happening in digital and social media. Whether in the generation of content for the new channels, or as external advocates, employees are increasingly demanding a role in their company’s communications.

The process is really complex and still immature. Empowering people outside of the communications team to communicate externally through social media needs a serious and severe evaluation.

While the majority of respondents support their employees’ external communication in theory, in practice there is uncertainty over how to best engage and utilise their talents.

“

Paolo Armano Digital Marketing Manager, Magneti Morelli

The Business “Take Out”

Share knowledge and positioning with all employees and match it with training before they can earn their passport to engage publicly, if not officially.

An MSLGROUP EMEA Survey

13

Summary & Recommendations The broad agreement among communications managers that digital and social media have the power to both positively and negatively impact corporate reputation goes hand-in-hand with the rising attention being given to corporate communications at board level.

The new 24-7 “always-on” landscape is an opportunity for communications directors to build their brand and corporate reputations and to redefine their value in the eyes of their superiors through more data-driven reporting.

However, it will be a challenge to fulfill the expectations of the C-suite if communications capabilities are not properly resourced and managed.

Along with overcoming in-house cultural conservatism and an external lack of receptiveness to digital and social content amongst some stakeholder audiences, communications managers must knit the newer skills of often much younger employees with the experience of more senior members of their teams.

In a communications environment that is moving faster than ever, through more channels than ever, to more audiences than ever, devising appropriate advisory and permissions procedures will be crucial.

So, how will communicators be able to use this opportunity most effectively?

Here are a few principles and recommendations from MSLGROUP:

Monitor, respond and measure

Start a content engine to sustain conversations

Overcome cultural conservatism and engage

Improve internal and external transparency

Make your employees active communicators

Conversations about your brand or business are happening all around you, whether you want them to happen or not. The chatter might be meaningless, or it might be signaling an unmet need or an issue that has yet to surface.

Creating enough content to populate digital and social channels is hard work. It must be planned for, resourced, and executed properly.

It’s not solely a question of volume – people are looking for high-quality content that’s relevant to them.

Digital and social media aren’t going away anytime soon. To repeat: conversations about your brand or business are happening all around you, whether you want them to happen or not. Burying your head in the sand will only expose your behind.

With more voices starting more conversations about your brand or business without your control or approval, you’ll be needing more advocates for your cause. Why not start with the people who work so hard for you?

Companies should set up social media listening programmes to get a better understanding of the conversations happening about their brands and businesses. The analysis of that listening should be used to develop risk mitigation plans to neutralise potential issues, and to inform positive white space opportunities for brands to expand their reach.

Creating and fuelling a content engine to sustain conversations across digital and social channels requires both creativity and process. It requires art and science to identify both what to say, who to say it to, and how to say it. It must reinforce the brand or business’ purpose and narrative.

While regulatory requirements might prevent some forms of communications, there are still avenues of expression that should be pursued. Misinformation must be countered by fact and legitimate customer enquiries must be serviced.

The old adage is truer than ever: if you don’t want to see it on the front page of the newspaper, you shouldn’t be doing it. Given the increased transparency wrought by the new channels, a company’s internal behaviour must absolutely match its desired public perception. This requires a change in culture at all levels, and not simply a new CSR programme to put in the shop window.

All efforts should be measured carefully to adjust approaches if necessary, and then be reported back to senior management to give them a fuller picture of corporate communications and business successes.

14

An MSLGROUP EMEA Survey

Convene an editorial group comprised of representatives from multiple units of the business – including HR and internal communications, customer service, investor relations, external communications & media relations, and marketing – and populate a sixmonth editorial calendar.

Use data to help make the case internally – one of the benefits of these new channels is that responses can be tracked and measured with specificity.

Demonstrate the benefit of engaging and help avoid the damage when a rumour is allowed to spread across the internet.

Companies should embrace transparency instead of fighting disclosure. Bad news will find a way out of your organisation – with a click of a button millions of pages of information can now be disseminated around the world. Be honest and accountable and you’ll have less to fear.

Upskill them to participate in these new channels and arm them with information and stories they can share. Set a clear framework and monitor their efforts and ask them to self-regulate too. With the right skills and stories they’ll be a passionate and committed advocate for your cause.

After all, who knows your company better than the people who run it?

To help with this process, bring your employees onboard and communicate with them regularly. Don’t let them be rattled by rumour or bad news. Give them the facts and trust them to use them to full advantage.

An MSLGROUP EMEA Survey

15

WWW.MSLGROUP.COM