Here's to excellence

Continuous excellence builds strong reputations Excellence is not an "aspiration." Excellence is...THE NEXT FIVE MINUTES! ~ Tom Peters, The Excellence Dividend

Or not.
EXCELLENCE is your next meeting.
Or not.
EXCELLENCE is shutting up and listening-really listening.
Or not.
EXCELLENCE is your next customer contact.
Or not.
EXCELLENCE is saying "Thank you" for something "small."
Or not.
EXCELLENCE is the next time you shoulder responsibility and apologize.
Or not.
EXCELLENCE is waaay over-reacting to a screw-up.
Or not.
EXCELLENCE is the flowers you brought to work today.
Or not.
EXCELLENCE is lending a hand to an "outsider" who's fallen behind schedule.
Or not.
EXCELLENCE is bothering to learn the way folks in finance [or IS or HR] think.
Or not.
EXCELLENCE is waaay "over"-preparing for a 3-minute presentation.
Or not.
EXCELLENCE is turning "insignificant" tasks into models of ... EXCELLENCE
EXCELLENCE is your next conversation.

Leadership Magazine: Please, can you take me off Google?

April's Leadership Magazine contribution can be read online here, it's on page 64 and 64.

Please can you take me off Google…

Reputation management is not crisis management.

If I had R1 for every time someone asked me to remove them from Google, I would be lazing on a hang mat next to an azure ocean, sipping cocktails on an exotic island today; and if I could magically remove people from a specific website, I would probably own that Island by now! Unfortunately there isn’t a quick fix, and the internet does not forget, ever. [Unless, you live in Spain, where I have heard that they have a law where you can delete an article online, unfortunately we can’t all move to Spain.]

Over the years reputation management has become synonymous with crisis communication and it seems the two terms are now used interchangeably. Let’s get one thing straight, reputation management is not crisis management.

What is the main difference between crisis management and reputation management?

Crisis communication is a reaction to a situation that has a negative impact on an organisation and its various stakeholders. It is a reactive management of communication to something that has already happened. Think panic-mode.

One of the key differences with reputation management is that it is proactive.  By doing regular research to understand your stakeholders (which incidentally is a key requirement in Chapter five of the King IV report) and linking their requirements to the ten key reputation management building blocks needed for building successful businesses, you will be able to identify gaps and be alerted to potential risky scenarios. Very often through this exercise crises can be abated and worrying scenarios avoided altogether. 

What are the things to consider for crisis communication versus reputation management?

Crisis communication’s main focus is on the protecting the external image of the organisation and on external communication management. Internal communication for employees is also important but the main focus during a crisis is salvaging that external image. Because it is a reactive exercise there are usually quite a number of stakeholders that will want to know what is happening. The recent listeriosis outbreak, a growing number of fatalities and then the recall on certain food products is a good example of a full scale health crisis that requires a public awareness campaign. Time is of the essence to get the message out during such a crisis, and keeping stakeholders in the loop, finding solutions to fix the problems and and taking steps to prevent similar future scenarios is vital.   

With reputation management you need to make sure that your internal business building blocks are in place first before doing any external communication. Like it or not, whatever is communicated internally will get filtered through to external stakeholders, and you want to make sure that everyone is singing from the same hymn sheet. It is therefore important that everyone inside the organisation is fluent or fully informed, sending out the same key messages. A good starting point is to ask, does everyone in your organisation know what the company’s vision and core values are? If you were to ask five different people to describe what your business does in eight words, would they all sound similar? Are policies and governance structures clear and understood by all? Are there sufficient training and mentorship opportunities? Research is highly recommended to better understand your stakeholders and what makes them tick. This will enable you to measure whether your initiatives are successful or not and highlight any gaps. Presenting numbers and figures to your board is also a lot more powerful than trying to convince them to listen to your gut feeling. Through research you can also make sure that you timeously communicate the most appropriate message through the best channels of communication and encourage feedback. 

With time on your side, reputation management gives you the opportunity to strategise about what you communicate and how, using data-driven research to inform decisions that ultimately strengthen and establish the relationship you have with stakeholders. So if the paw paw hits the fan, your reputation is already well established and will stand you in good stead, weathering the crisis.

Who should fulfil the reputation management function within the organisation?

Crisis communication is something that automatically falls with the Public Relations ambit.

The head of the organisation should take the lead when it comes to reputation management. However, bear in mind that every department plays a key role in how the organisation is perceived and this can impact its overall reputation. I don’t believe that reputation management should only fall within the Public Relations department, it is a much broader responsibility, with a lot more at stake than external communication management.

Can reputation management prevent a crisis?

It most certainly can. Using the insights that we have gained from the research that we conduct for clients, we’ve been able to highlight risk areas which if left unattended would have caused major damage to the organisation.

I am convinced that conducting a reputation research study can be a valuable exercise in actively protecting one’s business from a crisis. Our research can help an organisation to identify and fix concerns. They could be linked to operating policies, health standards being flouted, corrupt practices, unethical leadership, poor communication or lack of training opportunities. The key is to take action with while you have time, before concerns spiral out of control and reach crisis status. After all, wouldn’t we all like to be quoted in the news for the right reasons, instead of forever appearing on a google search linked to a highly publicised company crisis?

Leadership Magazine: Honesty is the best policy

Here's March 2018's Leadership Magazine article, it's on pg 78 and 79.

Honesty is the best policy

Corporate South Africa has over the past year learned many lessons in reputation management and the real value of stakeholder relationships, especially the importance of transparency.

In our data-driven approach to managing reputations using our proprietary reputation measurement model, we’ve seen the impact on the results and that companies are putting a lot more pressure on their leadership and boards to play open cards. When analysing the results from the surveys we conducted last year, the biggest average score change was for ‘corporate governance.’ The score dropped from 85% in 2016 to 80.1% in 2017, indicating the growing value stakeholders place on honest leadership and their apparent desire for even more transparency from directors at the top. This is not surprising as respective boards and leaders are ever increasingly being held to account by all stakeholder groups for their actions.

Last year we saw reputations being ruined overnight as big firms were found with egg on their faces, their dirty deals were splashed across the headlines.

In the past, transparency was associated largely with financial results; these days stakeholders are wanting to hear about the non-financial performance of a firm, such as their social, environmental and ethical performance.

When looking at the average reputation scores from last year’s research, it becomes very clear that Corporate Social Investment (CSI) projects are increasingly important to stakeholders. People want to know they are doing business with socially responsible organisations. This element received an improved overall score of 80% in 2017 (rising from 73% in 2016) and we believe it will follow an upward trajectory again this year, becoming ever more important in impacting overall reputation scores.  The rise of conscious consumerism is leading organisations to invest in sustainable social projects.

The crux here is that stakeholders must be informed about these initiatives as this has a direct impact on their reputation score. However, with that said, stakeholders will very quickly decide if a CSI project is just a marketing ploy or if it reflects genuine care and effort to make a sustainable difference.

With regards to transparency and how best to tackle it in a large organisation, I chatted to Vasili Vass, Group Head: Corporate Affairs at e.tv about what transparency means in practice, especially at a media house. Here is his take on it:

What does transparency mean to an organisation?

In the corporate environment, transparency is the extent to which a company’s actions are observable by people outside the organisation. There has been a move towards increased transparency in companies listed on stock exchanges, with the inclusion of strategy, risk, performance and sustainability in integrated reporting becoming a requirement and the norm.  

Transparency is critical for business given the nature of modern media, as actions they may have wanted to keep secret are more at risk of being exposed. Social media platforms make the dispersing of what might have been secret (or not transparent) in the past easy and fast.

Given this, an organisation’s actions should be scrupulous enough to bear public scrutiny.

Transparency in the context of media relations is as critical. And the old adage that honesty is the best policy really is wise advice to follow.

What information do you believe should / should not be shared?

During a crisis, the easiest way to navigate the communication side is to be honest, offer as much relevant information as possible, as quickly as possible and then to continue communicating with all media on all platforms. That is, being as transparent as possible.

If an issue is addressed head on, by feeding the media storm with true and accurate information, it can be reported on, and the media will no longer need to investigate.

However, at times for many reasons, all information may not be offered. Reasons for this could include negotiations still being underway, confidentiality clauses, confidential employee and customer information and sensitive business strategy which you do not want to, or are obliged not to release.  If pressed for information, you need to be honest and say you cannot release the information because it is sensitive and the reason why it is sensitive.

There is no such thing as no comment, that is a comment, and people will fill in the blanks with their own assumptions and messages.

What is the balance between too little and over sharing? 

To find the balance between too little information and oversharing, you need to be strategic and thoughtful in what information is released. That is, the information must be relevant to the situation and the impact it will have on stakeholders now and in the future must be considered.

Honesty and transparency help build confidence with stakeholders, but you don’t need to offer information that is not sought after which in the long run can damage your relationship with stakeholders. 

For transparency, you need to acknowledge a situation including information which will answer stakeholders’ questions, while not acknowledging if you don’t know the answer to certain questions and sticking to the actual situation and facts.

How do you know when you have that balance? Is it something that you measure?

When stakeholders believe they have information which satisfies their enquiry, while not compromising the organisation’s credibility you have attained the balance.

One shudders to wonder how some leaders go to sleep at night, knowing how many secrets they harbour and the lies they have to tell to cover up things which should never have been done in the first place. Wouldn’t you rather go to sleep at night soundly, knowing you have nothing to hide and that you run an ethical operation? Honesty is not only the best policy, it is the only way to keep all stakeholders confident in your business and to ensure your reputation is intact.

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Leadership Magazine: Agree to agreements

I'm a bit late with sharing my latest Leadership Magazine articles. Here's February's edition (there wasn't a publication in January 2018). My article is available here on page 110 and 111.

Agree to agreements

When I started Reputation Matters just over thirteen years ago, the business began as a 50/50 partnership with myself and a partner. We didn’t really worry about the paperwork; we knew we should get a shareholder agreement, but felt that we were in complete agreement and didn’t really bother about it. I still remember clearly that two and a half years into the arrangement (when there was still no agreement in place), I naively thought to myself how incredibly lucky I was to have a business partner that shared the same values and that we were ‘getting it right.’ Unfortunately, I had turned a blind eye to quite a few red flags, and if we had signed a shareholder agreement earlier in the life of the business, we could have avoided many issues when the pawpaw sadly hit the fan three years later.

Not having the correct paperwork in place can be incredibly detrimental for a business. It can cause problems on so many levels, including negatively impacting its reputation. I often hear of start-up owners in partnership who say, “We are on the same page” or “We have the same values and trust each other.” These are the reasons they give for why they don’t have a shareholder agreement in place. Trusting each other is great, but if that is the case, then trust and respect each other enough to have that conversation sooner rather than later. It’s easier to have the difficult conversations when you still like each other.

I turned to dynamic Cape Town based commercial law attorney, Robyn Hey to find out more about shareholder agreements:

Why is a shareholder agreement so important? A shareholder’s agreement is one of the key documents which any company with more than one shareholder needs. Although the company’s memorandum of incorporation is the overriding document for a company, a shareholder’s agreement deals with matters that are strictly between shareholders, which are private.  A well drafted shareholder’s agreement can prevent disputes between shareholders and facilitate the smooth running of the company.

Why invest in a legal professional and not an “off the shelf agreement” that you can buy at a stationary shop?  I get this question all the time. Standard agreements are fine for standard situations.  However, in the cut and thrust of business, especially where more than one business owner is involved, there is no such thing as a standard situation. Every business needs an agreement which makes sense given the personality of the owners, the goals of the company and ethos of the people that work there.  Good legal agreements give your company a voice and provide mechanisms that protect a business in the context of its industry.

What according to you are the three key things that MUST be in a shareholder agreement?

Lawyers’ views on this differ but in my opinion the following three things should be in the shareholder agreement:

a)     Any restraints of trade or confidentiality provisions which apply to shareholders both while they are shareholders and after they dispose of their shareholding.

b)    Valuation methods for buying and selling of shares.

c)     Funding obligations of shareholders. What money must a shareholder contribute to a company, when must this be contributed and what are the terms of the contribution.  Finally, what happens if a shareholder can’t contribute?

I know I limited Robyn to only three points here, but I also would like to suggest an additional aspect: how to split debt and profits when that time comes, and what happens to employees. I burnt my fingers on this point after our partnership dissolved as I had to go through a retrenchment exercise with some staff; my former business partner then poached my staff who had remained employed by me.

How often should a shareholder agreement be reviewed?

In a perfect world, key agreements should be reviewed annually by an attorney to see whether there have been any changes to the law which may impact the agreement.  If this is not possible or practical then they should be reviewed before any new shareholders are admitted, when the company is planning a big acquisition and when there are plans for any substantive changes to the company’s structure or operations. In these circumstances, both the company’s memorandum of incorporation and shareholder’s agreement should be reviewed.

What is the biggest and most common mistake you see companies make concerning their shareholder agreements?

The biggest mistake is that companies don’t have shareholder agreements.  Business owners, understandably, have a lot on their plate. People think that the standard documentation prepared when a company is registered is enough but very often situations arise that require the resolution of disputes and these kinds of provisions are usually only found in a shareholders agreement.  Without these provisions things can get very ugly and hinder the running of even the most successful company.

One last very valuable tip from Robyn is that when deciding on an attorney to assist with this task, choose someone who is reputable experienced in business matters.  A commercially minded attorney will help you think through possible scenarios that may arise because they have consulted various companies experiencing many different scenarios.  It is a great investment for your business to spend time with an experienced third party who will help you think about things differently.

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Book: The Best Place To Work, The Art and Science of Creating an Extraordinary Workplace, Ron Friedman, PhD

It's always great and interesting to learn about new and innovative ways to improve the workplace. I do think that we are ahead of the curve with a few things, and there is always room for improvement with others.