Professional Documents
Culture Documents
in a Global Setting:
MSLGROUPs Reputation
Impact Indicator Study
The MSLGROUP
Reputation Impact Indicator
A major global survey and report that
combines both intuitive and rational
dimensions when studying the
reputation of leading multinationals.
Foreword
The reputation of a corporation is its license to
operate. It has a decisive impact on the success
of the organization and is generally regarded
as one of its most important assets. And yet,
we would argue, there is clearly a need for a
much deeper understanding of the multifaceted
elements that contribute to corporate reputation
than currently exists today.
Anders Kempe
EMEA President for MSLGROUP
Foreword
Kindly,
Anders Kempe
Executive Summary
This report summarizes and comments on the
findings from MSLGROUPs Reputation Impact
Indicator, a global study of the general public,
that forms part of MSLGROUPs Corporate
Reputation framework. The primary aim of
this research was to find general reputation
trends on a macro and industry level and to lay
the foundations of a reputation framework for
additional future research and insight.
The field research was conducted during the last quarter of 2014, by
means of a survey on a statistically validated sample of the general
public in 10 countries, totaling 26,467 qualified respondents. The
surveywas complemented with analysis of social media content for
10 selected companies. The findings provide insight into what drives
the general publics views of some of the worlds best-known global
corporate brands.
MSLGROUP also carried out in-depth analysis of reputation drivers
within four industry clusters, in order to study the relative impact of each
for a given industry, and the differences between the four industries. The
selected industries cover the pharmaceutical, consumer electronics, fastmoving consumer goods (FMCG), and internet-based businesses sectors.
The key findings include:
Among the general public, the main dimensions driving corporate
reputation today are the perception of a companys products and
services, and that companys business behavior: Is the company
doing a good job delivering on its core business promise represented
by its products and services and is it seen to be doing so in an ethical,
transparent way.
At the industry level there are clear differences in the relative impact
of different reputation drivers within each dimension, e.g. corporate
behavior is significantly more important in the pharmaceutical industry
compared with the other three industry clusters studied, underscoring
the importance of fact-based input for reputation management.
There are significant regional differences in how companies are
perceived, throwing into stark contrast the new world and the old
world. Respondents in Brazil, China, India, and South Africa have a
more positive perception of companies than their counterparts in North
America, and particularly in Europe, where respondents can be said to
demonstrate greater skepticism towards companies in general.
Brands are global, corporate reputation is local. There are large
variances in the reputation of individual companies at a country
level. Even though a brand is recognized globally, the reputation
of the company is local.
EXECUTIVE SUMMARY
Part One:
The Study
and yet, we would argue, there
is clearly a need for a much deeper
understanding of the multifaceted
elements that contribute to
corporate reputation than currently
exists today.
Anders Kempe
President, EMEA, MSLGROUP
The MSLGROUP
Reputation Impact
Indicator
Robert Gelmanovski
10
countries
26,467
interviews
4. Perception of
financial performance
ABOUT THE METHODOLOGY
The questionnaire was divided into
two parts: one covering spontaneous
associations and expectations, and a
second part with 25 reputation statements
with a 7-grade scale (1 = do not at all
agree, 7 = agree completely). Answers
were indexed to a scale 0100. An index
difference of 2 points was considered
statistically significant.
Respondents were asked to evaluate
41 global corporations, chosen
because of their worldwide operations
and international outlook, and only
respondents with a higher degree of
brand awareness of the companies
(somewhat familiar or very familiar)
were allowed to complete the survey.
In parallel with the quantitative
research, online content was analyzed
for 10 of the 41 companies, with this
content categorized into one of the four
reputation dimensions of the MSLGROUP
Reputation Impact Indicator model.
While we have chosen to focus on the
overall findings and implications of the
research for reputation management, not
on company-specific insights, data about
individual companies is sometimes used
to illustrate a general point.
.
1
This online analysis was carried out by our
agency in Bulgaria Publicis Consultants
MSLGROUP specialists in social media
monitoring, analytics, and research. The team has
worked for clients from the automotive, FMCG,
IT, and pharma industries, and offers its services
for a broad range of languages, including most
European and major Asian languages. Combining
hand-coding techniques in processing data from
automated analysis tools with robust knowledge
of the dynamics of human behavior online, and
related consumer trends, the analysts are able
to provide deep qualitative insights that help
inform strategy.
MSLGROUPs Reputation
Impact Indicator model
Examining the relationship between the
Reputation Core, the underlying reputation drivers
and the content produced by and aboutcompanies.
Reputation
Content
Reputation
Drivers
Reputation
Core
10
FINDING
Financial
Relationship
performance
Corporate behavior
11
12
6. O
pen and transparent about the way
the company operates
2. Acts ethically
4. C
ommunicates in an honest and sincere way
9. Capable leadership
5. P
ositive influence on society
3. O
ffers products/services that are good value
for money
10
1
6. O
pen and transparent about the way
the company operates
3. P
ositive influence on society
4. M
eets customer needs
2. Acts ethically
13
10
Profitable company
Capable leadership
Good potential for future growth
Pharma
Consumer electronics
FMCG
14
Internet
Acts ethically
Open and transparent about
the way the company operates
Positive influence on society
Cares for the environment
Cares for its employees
Pharma
Consumer electronics
FMCG
Internet
Pharma
Consumer electronics
FMCG
15
Internet
FINDING
2.
Marsden, P, Alain Samson and Neville Upton
(2005), Advocacy Drives Growth, Brand Strategy
(198), pp.4547.
Reputation dimensions as
drivers of NPS
Financial
Relationship
performance
Corporate behavior
16
Financial performance
Relationshiip
Corporate behavior
Products and services
Consumer electronics
Internet
FMCG
17
Pharma
A more qualitative
approach to brand
awareness building
positive associations that
are easily accessible in the
minds of stakeholders is
therefore a key to a strong
reputation. And the more
closely this Mind Space
is linked to a companys
products and services,
thebetter.
FINDING
Positive
Easy
Negative
Neutral
22%
09%
78%
38%
53%
18
How do we define
Mind Space?
Brand
85
Positive
associations
Neutral
associations
0
Reputation Core
Company I like
Company I trust
19
Company I respect
Acts ethically
Consumer
electronics
FMCG
Negative associations
Neutral associations
Positive associations
Pharma
20
Internet
Capable leadership
Consumer
electronics
FMCG
Negative associations
Neutral associations
Positive associations
Profitable company
Clear vison for its future
Pharma
21
Internet
The importance of
perception of products
and services is supported
by our analysis of online
content from the 10 sample
companies.
FINDING
1. McDonalds
2. BP
3. GoldmanSachs
4. Citibank
5. Shell
6. PayPal
7. Microsoft
8. Johnson & Johnson
9. Samsung
10. Google
10
20
30
40
50
60
70
80
Values in percentage points, from data derived through a qualitative and quantative analysis of a sample of content
for each company in each of the 10 countries.
22
90
100
FINDING
Global Brands,
Local Reputation
A global corporate reputation might well
be the sum of local reputations in each
individual market, but how reputation
is constructed in those markets means
that each must be attended to with
insight and care. This is a significant
challenge not least given the growing
importance (and reach) of web-based
communication.
As far as local differences within the
survey findings are concerned, two
particular areas stand out:
1. Europeans are more skeptical
about companies than
respondents from the BRICS
23
New world
Reputation Score
Stronger
Weaker
79
India
76
Brazil
75
China
74
South Africa
67
United States
64
Canada
61
United Kingdom
60
Germany
59
France
51
Sweden
Old world
24
90
81
76
69
67
57
56
56
54
52
42
India
Brazil
China
South Africa
Canada
United
States
United
Kingdom
Germany
France
Sweden
58
57
56
54
52
52
United
States
France
United
Kingdom
Sweden
Canada
90
84
78
77
68
Brazil
China
India
South Africa
Germany
25
FINDING
Demographics and
Media Habits Matter
The development of the Reputation
Core Index among different age groups
follows a different pattern in each of the
four industries. Where pharmaceutical
companies are concerned, reputation
is significantly weaker among both
younger and older age groups,
while higher among middle-aged
respondents. For consumer electronics,
reputation is at a similar level across
all the age groups. For FMCG and
internet related businesses, reputation
is highest among younger sections of
the population, and decreases with
age, with reputation being at its lowest
among older respondents.
As part of the study we also analyzed
a possible relationship between gender
and corporate reputation, but we
were not able to find any statistically
significant patterns that could
support the notion that the gender of
a respondent has an impact on the
Reputation Core Index.
Industry Reputation
Core Index by age group
Pharma
Consumer electronics
FMCG
Internet
80
0
1617
1822
2326
2732
3335
3640
26
4145
4650
5155
5660
6165
65+
13
10
11
12
36%
online
Breakdown:
The rest:
5. Other 1%
2. Twitter 1%
3. Facebook 5%
8. TV ads 13%
9. TV news 17%
10. Radio ads 2%
11. Radio news 3%
12. Magazine ads 1%
13. Friends or family 7%
27
Primary
Secondary
College, university
Still studying
80
40
0
Pharma
Consumer electronics
FMCG
Internet
80
40
0
Pharma
Consumer electronics
FMCG
28
Internet
Part Two:
Observations
in situations where
reputation effects may be the key
determinants of business success
or failure, companies can and
should expect to be able to do
more than just reflect on previous
experience, or review data.
Experience certainly takes us
a long way. But it is time to move
on and to improve.
Maria Grimberg
Partner
29
Reputation Moments
We believe that the information age that we live in today has changed
the way that audiences judge our reputation. Theirs is less and less
a thoughtful assessment of our carefully constructed narrative and
more and more an intuitive assessment based on the immediate
beats and moments that define those individuals most recent
interactions with us.
Dominic Payling
Director and Head of Planning
& Insight at MSLGROUP in London
30
31
Reputation: A Matter
of Buy, Sell, or Hold?
Some might attract global profile, others might be noticed by many
fewer, but there are a significant number of examples each year
when we observe a clear link between corporate reputation and
stock market valuation. Almost all of these are where a company has
not delivered in a manner that has been expected by its customers,
suppliers, staff, or to society more generally. The transgressors
reputation has taken a hit and so has its share price. The impact
is often immediate and can be challenging to overcome.
Kevin Soady
Partner
But MSLGROUPs research shows that for most people, how a company is
doing financially is not something that concerns them when it comes to their
own views of a companys reputation. A company is either doing well (and
can therefore be expected to deliver on a series of reputational positives),
or it is not. Most people do not read the financial pages of the newspapers.
For them, the only time that business results appear to enter the public
consciousness is when a companys performance has been so spectacularly
bad or when the CEO is seen to have been so inappropriately remunerated
that it is front page rather than business page news.
This research has also determined that although a public perception of
good management (whatever that actually means) can support a positive
reputation, actually making money is something that might raise questions.
For a pharmaceutical company, for example, the research shows a negative
relationship between profit and reputation a small, but important indicator
that post the financial crisis, business as a whole has yet to clearly set out
an accepted argument for profit and corporate financial success.
So if the general public does not really care how a business is doing
financially, should the financial markets really care how the business is
doing reputationally?
The answer would appear to be an obvious yes. But in reality how many
companies are actually demonstrating the link between reputation and
performance in a way that is built into analyst models and investor decisionmaking? In our experience, there are not many who are (for example Allianz,
American Express, Philips) but when a company does take the time to
provide a detailed insight into this dimension it appears such an obvious
thing to do.
32
We have seen through this research that Net Promoter Score has a very
strong correlation with core reputation. There are many examples where
it has been demonstrated that a better NPS leads to better business
performance. Promoters spend more, tell others about their positive
experience, and are less likely to switch providers. This has been shown
consistently across disparate businesses and sectors from insurance and
credit cards, telecommunications and healthcare, technology and global
shipping services.
Many companies that are using NPS or equivalent metrics as a business
management tool are beginning to understand that the results are not just
of use in terms of sales and marketing, they can also offer the financial
markets an insight into the potential within a business if reputational
targets are achieved or improved upon. So, for them, a business that is
being managed on the basis of maximizing customer satisfaction (whether
those customers are the general public or other businesses), is a business
that will be taking market share, will be making more money, and should
be achieving a premium rating.
The next step to tying reputation to financial performance may well then
rest with the investors themselves or the sell-side analyst community.
Our recent survey of global investors, covering many of the same markets
as covered in this study, showed how important non-financial factors
are to investor decision-making, with corporate strategy and quality of
management the key issues for many. But it is hard to define exactly what
quality management is or represents. Corporate reputation is most definitely
one of the factors but how should this be defined? This Reputation Impact
Indicator study provides us with some insights and as more begin to learn
from the relatively few examples, it should become the norm rather than the
exception for the CEO, CFO, or Head of IR to be asked on an earnings call
So what happened to your key reputational KPIs in the quarter and what
are you doing to improve them? Because reputation can be the key to buy,
sell, or hold.
33
Guiding Corporate
Reputation Management
in the Next Decade:
A Little Less Conversation,
a Bit More Action Please?
Maria Grimberg
Partner
34
voice or exit that are increasingly important. The walls between external
and internal are coming down and the concept of transparency must be
redefined in order to stay interesting, credible, and respected.
This makes many businesses nervous. The speed at which a consumers
opinion can spread is, frankly, daunting. It is easy to become more riskaverse than ever before and to start avoiding making decisions that might
upset consumers, even if they are sometimes the right ones to take. But
the truth is, innovation and progress require courage. And to survive and
thrive, companies need to be given the opportunity to weigh reputation
opportunities as well as risk.
Optimal versus Maximal Reputation
Here is where things get interesting.
We recognize that in a multi-stakeholder environment, businesses face
reputation risk in everything they do. In order to mitigate these risks, we need
a true and deep understanding of the possible effects on business results.
But the risk measure has become too simplistic. In our view, reputation has
too often been gauged by standards based on falsely objective criteria rather
than on the effect it really has on business. Companies from completely
different industries are ranked against one another, rather than against their
competitive set, and their own optimal reputation level is ignored.
Many existing frameworks take the starting point that a business
reputation is formed and developed steadily and progressively over time,
anevolutionary process if you like. The aim is to constantly improve,
and the higher the score, the better the chances for business success.
But the truth is that every company is unique, and that reputation is largely
formed by the expectations people have of a company. If we understand the
building blocks we can also get closer to understanding what the optimal
level for any given company is. (Optimal reputation can only be understood
in a multi-stakeholder context. While the general public is important,
companies have conversations with many stakeholders.)
Our hypothesis is that there is an optimal level of reputation for every
company, which does not necessarily have to be the highest one possible.
Companies should strive for the optimal level of reputation and Mind
Space for the industry and business situation that they are in. A reputation
that is optimal will also be in a dynamic equilibrium. When pushed in one
direction, it will after some time, if companies do the right thing, bounce
back more or less to its original levels. The optimal level and makeup of
a reputation will change over time.
We also believe that there are thresholds within the dynamic equilibrium
which companies should not fall below, and thresholds that those companies
could seek to move beyond, in order to positively impact reputation going
forward. These thresholds are based on factors that have the strongest
correlation to reputation within a specific industry, but also related to society
as a whole.
So our conclusion is this: What really matters is our ability to foresee how a
companys business decisions affect the Reputation Core and to understand
where it will move away from its equilibrium. From that base a company
can assess the benefit and cost of any reputation opportunity and the
associated risks. Deeds versus words. We look forward to a time when more
of our clients perhaps say to us, A little less communication a bit more
understanding of the consequences of our actions, please. Of course, we
need to robustly test these hypotheses all be they well-founded. Stand by
for more from our follow-up research project next year.
35
36
About
MSLGROUP
We are Publicis Groupes strategic
communications and engagement
group, advisors in all aspects
of communication strategy:
from consumer PR to financial
communications, from public affairs
to reputation management, and from
crisis communications to experiential
marketing and events. If you would
like to talk to us about how MSLGROUP
can support you with reputation
counsel, strategic planning, insightguided thinking, and big, compelling
ideas, please contact Maria Grimberg
at maria.grimberg@jklgroup.com.
MSLGROUP.COM
Trudi Harris
Chief Communications Officer
trudi.harris@mslgroup.com