Hello Peter.
Hey Craig, how are you? Can you hear me okay?
I'm very well. Thank you. Yes, lovely to meet you.
Excellent, good to meet you. It's kind of amazing that we haven't met. I did a lot of work in Australia, which is your backyard.
Yes.
And I think we must have had some of the same clients and certainly some of the same interests and yet we didn't know each other. It surprised me when I heard from you. I did an enormous amount of work with Rio Tinto and other companies in the mining industry, some in the forest products industry, worked with utilities, a lot of work with government in New South Wales and Victoria and firefighting and brush fires and those kinds of issues, it came as a great surprise to hear from you and look you up and say, “We should have known each other for the last 25 years.”
That is very odd, Peter. I can't believe it. It’s a small world, yet it’s a large one.
I guess so.
Where are you now? Are you traveling the world.
I live on a ship the only the only ship of its sort in the world. It’s called The World and it’s like a co-op apartment that floats. And we’re on it, you know, nine or ten months a year, We get off once in a while to go back to New York and see grandchildren and doctors And we are currently in in a small small island called Bequia, which is in the Grenadines, which is part of St. Vincent, which is in the Caribbean. I don’t know if any of that is meaningful to you or not. It is my first time in Bequia. It’s always nice to find a new country.
Fantastic. Well, thanks so much for making the time to have a chat while you traveling around.
Oh, It was just fine. We were wandering around all day and I came back and showered and put on a decent shirt and here I am.
Thank you for getting dressed up for me, I appreciate it.
You don’t get to see what I’m wearing the bottom half.
Stop right there. {laughter} So Peter, we may kick off, I’ve obviously read some of your stuff and you have a fascinating insight into reputation and I love the whole outrage theme that you bring to it. But I want to talk to you firstly about this relationship between trust and reputation and how you see that in the current context.
Yeah well I mean I think companies and organizations generally probably make a mistake in even trying to be trusted. I mean, you know, there’s a virtue in trying to be trustworthy, I think. I mean, you know, it’s worthwhile, it’s aspirational, I don’t think organizations achieve it most of the time, but aiming to be trustworthy is worthwhile. Aiming to be trusted, I mean, it’s very difficult to achieve. It tends, even if it’s achieved, to be very short -term. As soon as you realize you’re trusted, you start abusing the trust, then you get caught, and then you’re not trusted anymore. So, I mean, over the long haul, you know, over, you know, all my time with clients, I kept saying, give up on trust. Don’t try to be trusted, you know, try to be accountable so that you don’t have to be trusted. Try to set up accountability mechanisms, set up community advisory panels, and various kinds of mechanisms so people don’t have to trust you.
I endlessly used to tell the story of a Chinese company where neighbors were worried And, you know, this was 20, 25 years ago, back before the internet, for most of the internet. And, you know, but TV already existed and local TV, cable TV already existed. And they just put a camera in their control room, you know, focused on the key meters, the key measurements. the key measurements, and put doppelgangers, put copies in the lobby of City Hall in places like that. They said, “You want to know what our emissions are. You want to know what we’re achieving. In real time, any time you want to check, just check.”
The paradox, of course, is when you’re accountable, people eventually stop trying to hold you accountable and begin to trust you. But I think accountability mechanisms are much more sustainable. And where that connects to reputation, it seems to me, is you’re not really aiming for a reputation of being virtuous. You’re aiming for a reputation of being well -controlled. You’re aiming for people not to think that if you were in charge, you would not abuse your power, but to think you’re not in charge and you don’t have that kind of power and they don’t have to worry about whether you would abuse it if you could because they are convinced that
On that note, what do you think are the three critical drivers of a good corporate reputation, and can you prioritize them or they just …
Much of it depends on whether we're talking about good reputation or bad reputation. Is that a concept? Are you familiar with my approach to those two kinds of reputation?
Maybe you can expand on it for the group.
Yeah, because I think it’s central to my thinking. You know as you probably know that the dominant metaphor when people talk about reputation is a bank balance and you know the idea is you know you do something people like that’s a deposit you do something they don’t like that’s a withdrawal and you try and keep a you know a positive balance you don’t want to go into debt. That’s a dominant metaphor and it basically assumes that there’s one dimension with being hated at one end and being loved at the other end and neutral is in the middle.
It’s a lovely metaphor but it’s wrong. It’s sort of empirically false. For one thing, lots of organizations are simultaneously, and lots of individuals, are simultaneously much loved and much hated. One thinks of Donald Trump at the moment, who’s supporters think he’s a god, and his opponents think he’s Hitler. There’s no way that being equally loved and hated is the same thing as nobody giving a damn what who you are, you know, those are, you know, in the bank account balance, you know, metaphor, those are both zero, but they’re, they’re radically different. So, you know, years ago, I started saying to clients, look, you know, reputation is two variables. One is how loved you are, from in...
I – I lost you for a second, Peter, sorry, I lost you. So
Yep. – Two variables, you know, one is how loved you are and it goes from invisible to much loved. And another one is how hated you are and it goes from invisible to much hated, and they are independent. You know, you can be low on both in which case you’re invisible, you’re neither much loved nor much hated; you can be high on both where you have very stalwart supporters and very dedicated opponents.
The point of that, well, there are several points to that; one is that the strategies for managing one of those variables are completely different from the strategies for managing the other. In terms of some of my other writing, I would say, “Okay, if you’re aiming to get those who like you a lot, to like you even more, that’s support mobilization. That’s what you do when you’re trying to get out, get your supporters to come to the meeting, or you’re trying to get the people for a political candidate, the people who like you the most to go door to door on your behalf or to give you money, that’s support mobilization, to get from love to even more love.
The opposite of that is what I call outrage management, to get from hated to a little bit less hated. To get the people who hate you, you’re not going to get them to love you, but you can get them to hate you less so maybe they don’t go to the meeting. They don’t write a letter to the regulator saying, “Don’t give this bastard a permit.” And that’s an entirely different variable, that’s outrage management.
The third variable is public relations, where you try to get people who don’t give a damn to like you a little. You’re trying to get people to move people from the middle to a weak positive position. And that’s very important if there’s gonna be a referendum, for example, where millions of people who really don’t give a damn will vote anyway, and especially in Australia, where they’re legally obligated to vote. So being liked a little is enormously better than being hated a little. That’s what public relations is for.
Those are three entirely different toolkits. And you can’t begin to manage reputation until you decide which of those you care about. Now, my argument has always been that negative reputation is way more important than positive reputation. Now, to some extent, that’s a self -serving judgment because, you know, my bag of tricks was mostly about how to reduce negative reputation, you know, how to diminish, you know, what I came to call outrage. But I mean, I think empirically, for most situations, it’s flat out true.
There are exceptions. I mean, you know, The example I often use to give when I’m sort of introducing this concept is if you’re trying to decide what movie to watch, good reputation is way more important than bad reputation. You know, there’s no distinction between a movie you’re going to hate and a movie you’re going to hate even more. You’re not going to watch either one. And what you’re looking for is the movie you’re going to love the most. On the other hand, if you’re trying to decide whether to let your kid go to a movie, then suddenly the difference between a great movie and an even greater movie doesn’t matter to you, it’s whether the movie is so bad you won’t let your kid go. You find the movie objectionable in some way, it’s obscene or it’s politically unacceptable or whatever.
So, there are certainly times when being more loved is important, and there are times when being less hated is important. But for my clients, and I would judge as far as I know for your clients, especially in moments of controversy, being more loved is way less important. In fact, it can backfire. You think of a situation where the regulator is trying to decide whether to give a company a permit and the regulator is going to have a hearing. Ideally, what you want is very few people to come to the hearing. And if you mobilize your supporters to come to the hearing to speak up on your behalf, and in the process, that will inevitably mobilize your opponents as well, they hear that your supporters are coming, and they start booking buses too.
You get a very nasty, newsworthy, angry, polarized hearing, and the regulator decides, “Well, let’s think about this for a few years and we’ll get back to you.” Mobilizing support is bloody unlikely to work in your benefit. What you wanna do is diminish opposition so that practically nobody goes to the hearing. And if practically nobody goes to the hearing, the regulator lets you do what you want. So I mean, it’s that kind of thinking that led me over the long haul to say to clients, one, they’re different variables and They have different toolkits, and two, you should care less than you do about having a good reputation, and you should care more than you do about not having a bad reputation. You should be spending a lot more time trying to diminish the opposition of your opponents and a lot less time trying to burnish your positives with people who already like you
Given that wonderful context that you just described, what do you think are the key risks to then reputation management? If you’ve got this in front of you and you’re managing all of that, what are the risks to reputation management today and Are there mitigating actions corporates can take about these? And have you seen any good examples?
Well, I mean, if we’re focusing on bad reputation, okay, if we, you know, we’ve sort of got that behind us, and we’re not interested in underwriting sports leagues and contributing to local theater, and you know, all of that, burnishes good reputation and does nothing for bad reputation. And I, you know, I mean, I am going to get to your question, reputation. I feel like I should at least add that probably the worst thing you can do when under attack is point out your virtues in ways that are irrelevant to the issues you’re being attacked for.
It’s like if your daughter is flunking math and you’re yelling at your daughter ’cause she’s flunking math, it will not help her to point out that she makes her bed every day. You’re focused on her math performance. And similarly, if a company is in trouble for polluting the environment or for some kind of consumer fraud, that is a horrible time to talk about the ways in which it’s a good citizen. So I’m not sure that that’s an answer to your question, but I think it’s a very important warning, because the intuition of companies when they’re under attack is to point to their strengths, and that’s like the worst of all possible times to point to your strengths.
So, I would say when you are under attack …, you said three, so I’ll go with three. The first three things I would say to a client when the client is under attack is, one, figure out what you did that’s genuinely bad, acknowledge it and apologize for it. That’s number one. If they’re accusing you of seven things and three of them you didn’t do and four of them you did do, don’t spend a lot of time defending about the three. Spend way more time, acknowledging the four things you did wrong, and doing a mea culpa. Don’t explain why you screwed up in a way that sounds like it’s an excuse. Focus on taking the blame. Acknowledge the misbehavior. Acknowledge it often.
What I used to say to clients is you keep focusing on how you screwed up until your stakeholders get irritated and say, “Let’s put that behind us.” That’s never your line. You never get to say about your own misbehavior, “Let’s put that behind us and focus on the future.” That’s something they get to say when they’re sick and tired of your apologies and you keep owning your misbehavior until they tell you to shut up and and move on. That would be number one.
Number two is to share control and in so far as you can’t share control set up accountability mechanisms and that deals directly with the replacement of trust. Some time ago in the US the Chemical Manufacturers Association which has changed its name since then, but that was the Chemical Manufacturers Association when I worked with them, and we devised the slogan, “Track us, don’t trust us.” And that was the slogan for 15, 20 years. And I think it carried a lot of weight. It was saying to the public, “Of course you don’t trust us, we’re a chemical company company for Christ’s sake. Why on earth would you trust a chemical company? We’re not asking you to trust us. We’re asking you to hold us accountable and track us and watch. And again, in keeping what I said earlier, it’s not claiming to be virtuous. It’s claiming to be well-controlled.
And this has the side benefit of very much appealing to the regulator. When to claim to be virtuous, they are basically claiming that they don’t need to be regulated. When they claim to be well -controlled, they’re claiming that they are well -regulated and that gives the regulator a place in the sun and diminishes the motivation for the regulator to over -regulate. You know, if you claim you don’t need to be regulated, the regulator begins to feel like they need to make more demands. If you claim that you are well -regulated and properly submissive, the regulator relaxes. So that’s among the upsides, it seems to me, of instead of claiming virtue, claiming accountability.
I think sharing control is even better than accountability, but it’s harder. The difference between sharing control is if I let you drive the car, and accountability is if I let you sit in the backseat and yell at me that I’m a crappy driver. Letting you drive is a very powerful outrage reducer, and a very powerful way of diminishing negative reputation, but I found it very hard to sell the clients. I could sell accountability better than I could share and control. So that’d be number two.
And I think number three, and the one that's … these are all counterintuitive, but I think the one that’s most counterintuitive is to give away the credit when you improve. And this gets to the concept, Craig, of corporate social responsibility. And I used to say to clients, no, no, no, no, no, that corporate social responsibility is crap. What we want instead is corporate social responsiveness. Same initials. You don’t have to re -embroider the towels. The difference is, and you’re seeing a leitmotif here, you’re not claiming to be virtuous. You’re claiming to be well -controlled. You’re not claiming to do the right thing because it’s right. You’re claiming to do the right thing because your stakeholders are demanding it of you.
The example I sometimes give is there’s a stream behind your facility. The question is, “How clean should you And, you know, my answer was always, you shouldn’t give a damn about the stream. You should give a damn about people who give a damn about the stream. You know, and if you clean the stream more than your stakeholders are demanding, you’re wasting shareholder value. If you clean the stream less than your stakeholders are demanding or, you know, put in a an element less than you think they will be demanding ’cause it’s cheaper to clean it before they start making the demands. But if you clean it less than they want you to clean it or are going to want you to clean it, that’s also wasting shareholder value ’cause then you get outrage and you get opposition then you’re no longer able to run your business as well as you’d like to. So what your need to be doing is figuring out how clean the stream your stakeholders want and how clean the stream they’re going to want in the coming years and how badly they want the stream to be as clean as they want it to be and that tells you how much to clean the stream. And then that’s what you tell them. You don’t say we’re cleaning the stream because you love fish. You say we’re cleaning the stream because you want us to, and we care about your opinion
And Peter, I love that, but it does come down to, I think, one thing, and that’s corporate culture. What role does corporate culture or corporate behavior play in making those decisions and being open to engaging with the stakeholders in a way that you’ve just described versus not giving a damn and then getting the outrage because you didn’t listen. You didn’t engage. Does corporate culture play a role in that?
Absolutely. I think these strategies are counterintuitive for everybody. It’s always a victory of sort of empirical analysis over intuition. I never found a client, when I was saying these things, who would say to me, “Well, yeah, that’s obvious. That’s self -evident. I get that.” It was always, “Oh my God, do I really have to do that?” Proved to me that that’s true, because it’s unattractive in terms of ego, and it’s counterintuitive intellectually. Sometimes, in my experience, it would percolate up in the corporate culture, my approach. Sometimes it would percolate down, but this is a sad admission. I never found that my approach was really sustainable in a corporate culture over the long haul.
I mean, I had companies where I became a verb. Everybody in middle and upper management who was brought into the company went to a training with me and got “sandmanized.” That’s a word, that was a word in the company. I became a verb and this is a multinational corporation in which you know everybody middle management and hire had to be standardized you know and then they brought in a new CEO and the new CEO fired a lot of top people just so he could have his own people as new CEOs often do and you know and within five years six years the company was doing things you know that were completely compatible with my approach. It had not become sustainable in the corporate culture. I thought it was. It was there. Everybody in senior management knew my approach and was doing my approach,
I mean, arguably all work is to Sisyphean and nothing lasts. You know, I mean, I don’t know the answer to that, but I don’t know how you sustain it in the corporate culture. I know how you get it into the corporate culture, but I don’t know how you keep it there after you're gone.
So what, but then why do companies get these behaviors so wrong? You know, these maximizers or behaviors that result in the crisis
I don’t think corporations are profit maximizers. I think they are self -esteem maximizers. I can’t tell you how many times clients have said to me when I said, “Okay, you will have more success in your stated goal of getting the facility permitted or getting the strike over or whatever you brought me into achieve, you will have more success if you eat some crow and say you’re sorry to this activist group that you hate.” I’ve had endless clients say, “I’d rather not get the goddamn goal than say I’m sorry to that asshole.” Occasionally, it would occur to me to think, “Am I working for this guy or am I working for the board?” In which case, should I tell the board that this plant manager is willing to forfeit billions of dollars in shareholder value rather than say he’s sorry?
It was kind of a moral or ethical dilemma for me, whether to report up through the system. But I always figured that the person I was corresponding with was my client, not the board that never heard of me. But the point is, the people running organizations are much less committed to the stated goals of those organizations, then they are to feeling good about themselves.
The biggest barrier to outrage management is it doesn’t feel good. You know, I mean, you know, I mean, if when stakeholders are outraged at your organization, the odds are overwhelming that you are outraged at them. I mean, why wouldn’t you be, you know, they’re they’re accusing you of horrible things. You know, They’re throwing rocks at your car, they’re costing you gobs of money, they’re undermining your reputation. Their children are refusing to play with your children after school. Why wouldn’t you hate them? It’s the most normal thing in the world. The difference, of course, is outrage stakeholders have And, you know, outraged company officials get cold and passive -aggressive. So it’s, you know, it’s hot anger versus cold anger, you know, and their heat makes you angrier, so that makes you more cold, and your coldness makes them angrier, and that makes them hotter, and you get this horrible vicious cycle.
But the important point here, Craig, is both sides are outraged. It’s outrage. This is almost never a fight between outraged stakeholders and a calm management. It’s a fight between outraged stakeholders and an outraged management. And for the same reason that the stakeholders don’t realize that the emissions aren’t dangerous because they’re too outraged to think straight about the data, management doesn’t realize that it would be cost effective to apologize to the stakeholders because they’re too outraged to think rationally about thei
Yeah, I must say from my experience, I see a lot of that and very often that outrage from management is a result of hubris or arrogance or believing their own PR in a way. I want to come back to those three things that you focused on earlier, and I want to ask you this question in relation to those three. In your opinion, what are the one or two things that absolutely sacrosanct to building and keeping a good reputation, and will they change over the
Well again, I want to object to your language. It’s not about building and keeping a good reputation. it’s avoiding a bad reputation. Yes. - I mean, building a good reputation, a whole different game. You know, and I mean, I really want to insist on that ’cause I think it’s critical. But yeah, I mean, I think the single probably, I mean, you know, when you talk about, you know, acknowledging your prior misbehavior, you talk about sharing control and setting up accountability mechanisms, you talk about giving away the credit, saying, “I did the right thing because you made me or wanted me to, not because I gave a damn about the stream.” All of those things require honesty and transparency. If I had to say, “What’s the one thing you haven’t got a prayer of doing any of that without,” it’s being willing to trust the public with more of the truth. And to me, that’s the trust issue. This is not about the public doesn’t trust the company, that’s an achievement. It’s good that the public doesn’t trust the company. I think trusted companies are bad for the world. I don’t want to help companies be trusted. But what’s problematic is the company doesn’t trust the public with the truth You know and and if you’re not willing to tell them the truth about what you screwed up You’re not willing to tell them the truth about the problems You have that they should look over your shoulder as you try to solve them You’re not willing to tell them the truth about why you did what they wanted you to do You know then then you haven’t got a prayer of managing their outrage. So I would say, you know, the, you know, the, the, the sine qua non is trusting the public with more of the truth, is honesty and transparency.
And if you get that right, if you manage to get that right, what, what would you say accrues from that sort of relationship with the public, that trusting, honest, transparent relationship?
I think pretty much everything I’ve talked about is going to be downstream of that. Once you’re willing to be transparent, part of what you’re going to tell them is what you screwed up, and that’s going to bring about acknowledgment and apology. Part of what you’re going to tell them is what problems you are currently facing, and as soon as you tell them what problems you’re currently facing, they’re going to want to face them with you. So that’s going to lead to accountability mechanisms, it’s going to lead to shared control. And if you’re going to be honest about your values that you’re not the least interested in being responsible, your purpose is to be responsive, then they’re going to demand that responsiveness.
Once you claim you you know you intend to be responsive They’re gonna they’re gonna hold you accountable for that and they’re gonna start saying “Okay, here’s our list of things we want from you. What’s your response to the items on the list?” But I think pretty much, you know everything I’ve talked about I mean, I mean, it’s clear in the negative It’s clear that if you’re not willing to be transparent you can’t do any of that. But I think it’s also true in the positive. If you are sort of a phrase I sometimes use is radical honesty. I mean, if you’re really honest, honest about not just the things that they already know. I mean, step one is to tell the truth about the things they already know, but you’re inclined to pretend they’re not You know, and then step two is to tell them the truth about the things that they don’t know but they’re likely to find out and, you know, the, you know, Greenpeace is going to come along and tell them. And step three is to tell them the truth about the things they’ll never find out if you don’t tell them. And that’s what that’s radical honesty. And if you get there, I think all of these reputational problems become almost self-solving.
Do you think that companies can actually assess the value of their reputation amongst their stakeholders and have you seen any examples of companies that are doing this well that are or products or services that actually assess that value with their stakeholders?
Well you’ve done that, haven’t you? Don’t you have an instrument that, I mean I did my research a little bit. You have an instrument that helps companies figure out, you know, the financial cost of a crisis.
Yes, we’ve got the Crisis Index 300 we’re about to launch this week, next week in fact, which looks at listed companies have suffered a crisis So we analyze their share price drop, the time to recovery of that share price, their earnings per share drop, time to recovery, whether the CEO left or not, etc. So there are about 313 companies on that list already. But I’m thinking more about that’s the crisis end. I’m thinking more about if you’ve seen anything out there that measures a company’s reputation and leaves them accountable so that when the score stops dropping, with their stakeholders and the terms they view them, that they can
I mean, the short answer is I haven’t. I designed something like that some years ago, and it’s still accessible on my website, although you might … I mean, it was done on … I think, I don’t even remember, Windows 3.1 maybe, it was a very old platform you know, so it might it might crash your system. But might get an old gaming computer and you can download it from my website It was called … oh what was it called? I think it was called Outrage Prediction and Management but I’m not absolutely certain. It was expert system software. And what I did jointly with a an organization called Qest Australian company called Qest no longer exists it’s been absorbed into GHD.
I did some work for GHD recently.
Ah, well, I used to do considerable work with GHD back in the day.
Okay.
.Do you know Emily Lazzaro?
No I haven't met Emily.
Okay. She was the person who was still there that I worked with most closely. Barbara Campany. She's gone, but she was important in GHD.
I was working with Phil, Phil Dillnaugh. Or Tim, Tim Dillmott. Sorry
.No. Okay.
I was working with Phil, Phil Dillnaugh. Or Tim, Tim Dillmott. Sorry.
Yeah. No, I think we worked with different pieces of GH company. It’s a big enough company. You're right.
But we basically took a whole lot of hypothetical and real case studies and wrote sort of true false questions about, or multiple choice questions, about various outrage components with regard to those case studies, and essentially calibrated them on my intuition. The goal was to create a piece of software that replicates what I would have told you if I were there, in terms of how much outrage you are up against, and what components of outrage are most responsible for the problem you’re facing, and what strategies for reducing the outrage are going to be most effective. And we did all of that in a piece of expert system software that actually worked. The problem is it required enormous effort. You know, you had to get a team together and work for most of the day before you began to get something usable.
And you know what happened is clients took a look at it and said “Hell no, I’d rather hire Peter.” The goal was to replace me and there were some people, I mean it had some sales but it did not do well. So now it’s freeware on my website. It gets used from time to time. I can track how often somebody downloads it, but again, I have to caution you. You need an IT person to help you download it so it doesn’t crash your system. That’s because it's very old software.
Peter, I want to ask you, where do you think the responsibility for reputation sits? Is it at the board level, is it the CEO, is it the executive tea
Well, almost by definition, the board is responsible. But it's got to be delegated. Somebody's got to own it and champion it. I think a big problem is if you look at the the three tasks that I talked about earlier; being more loved, going from love to even more loved, going from hated to less hated, going from neutral to a little bit loved. All three of those functions already exist in corporations, but they exist in different departments. So there's the PR people working on getting folks who don't give a damn to like you a little. And there's the community relations people working on getting folks who hate you to hate you less. And there's the, sometimes the government relations people or, you know, certainly the shareholder relations people are all about getting people who are on your team to be even more fervently on your team.
And those people don’t talk to each other. When I would bring them together for a consultation and make them fight, it was often the first time they were in the same room or one of the infrequent times they were in the same room. Remarkable.
Somebody has to be in charge of all three of those in order to make any sense out of reputation and in most organizations that doesn't happen until you get to the CEO who’s got bigger fish to fry. So, you know, there’s nobody for whom … most organizations don…t have anybody who’s called the chief reputation officer who is looking at PR and support mobilization and outrage management and figuring out which one matters more in this situation versus that situation. That’s what you need, you know, that’s where it ought to#8230; where the champion of reputation needs to be; a chief reputation officer to whom PR reports and shareholder relations reports and employee relations reports and community relations reports. Not happening yet but I have hopes.
Well, let’s step into the future of it. I wanna check you briefly about artificial intelligence and technology, and specifically whether you feel that there’s a role for technology or artificial intelligence in reputation management toda
I'm sure there’s got to be... I mean, you know, you’re talking to an octogenarian about AI that, you know, I can’t possibly be the right person to ask about that. I talked to ChatGPT as if it were my grandchildren. But yeah, I mean, I don’t... I can’t imagine.. I mean I have to take that literally. I can’t imagine that AI is going to be making crucial reputation management decisions. But I think if you know clearly it ought to be helping. And there is somebody – I’m blanking on his name but I can get it to you later. There is somebody who does work explicitly on AI with regard to reputation. He’s in Belgium I think? France?
Hennigan?
No. All right. So, there are two people because that’s not that’s not the one I have in mind, but ….
Oh, I know who it is. It’s Philippe Borremans.
That’s it. That’s it. That’s the one. Yes. And I get his newsletter and I look at it and I think, “Oh, it’s a good thing I’m retired because this is not my stuff.” But, you know, clearly there’s a field there.
So, let’s not talk too much about AI and technology, but what do you think is the next wave of reputation, risk that corporations will
Well, I mean, part of what’s interesting, thinking about what’s in process is, you know, during the course of my career, when I was still working, we went from a time when corporations felt like they ought not to take a position on social issues unrelated to the company to a time when they felt like they should. And that was partly, you know, a corporate social responsibility and you know what I think about that and it became very hot, and ESG became a big, big, big deal. And I was still working when that started to be important. And companies started feeling like they ought to have a position on things that had nothing to do with their company.
You know that… as a citizen you know they should have a position on Ukraine. Not I mean that it’s a new example for an old point but, and I kind of thought that was crazy but I had more and more clients who thought no, and they had data indicate that a higher, an increasing, percentage of their stakeholders expected them to be engaged and not to take the position that I was advocating that, you know, we’re here to make widgets for profit and we’re only… and they would sometimes say to me, “look, you tell us we need to be responsive. Responsiveness is calling on us to have a position on Ukraine because, you know, our stakeholders are saying, what’s your position on Ukraine? And you know we got to do that.”… And I very reluctantly saw that … I mean they had data that more and more people were demanding that.
That is in process of ending, it seems to me I mean, ESG hasn’t disappeared by any means but it’s becoming much more on the defensive I think. And at least ESG was how you run your company; it wasn’t your position on issues that have nothing to do with your company. My guess is we are, at least in the US and I suspect in the west in general, we are moving away from a time when we want corporations to care about everything; to have a foreign policy for Christ's sake! And we’re moving back to a time when we want them to stick to their expertise and not interfere in things that are none of their business and I think that’s a very good trend but you know it’s happening. So that’s one that seems to be in process of changing.
Another that you know is not such a good trend. I think it’s an awful trend is obviously increasing polarization. And that cuts the other way, because it’s harder and harder to be neutral. I mean if people want to divide into two camps and turn the marketplace into something like a summer camp color war. You know, you’re either on the green team or the gray team. And you know, we may because of polarization, we may be moving to the point, where there are I’ll put it in U.S. terms, where there are Republican beers and Democratic beers, you know, which is is horrible. Horrible for the society and horrible for the beer industry. At the moment it does seem to be happening.
So on the one hand, people are diminishing their demand that companies have a foreign policy. On the other hand, they are getting more and more polarized to the point where they are in the marketplace wanting companies that are somehow associated with the company’s brand is somehow associated with them. I mean you know it is happening with beers right? I mean Bud Light is now a conservative beer and you know there are left-wing fast food joints and right-wing fast food joints. Who’d have thunk it? I think that’s very bad for reputation and very bad for the society in general. You ask me to see what’s changing? That's changing.
And how do corporates deal with that, Peter? I mean, that, you know, you’re either for or against, and you either... there’s no fence sitting, right, in terms of what you’re saying? So, how do corporates deal with that reputation risk over the next decade?
Yeah, I don’t know. I mean, I would like to see them try to refuse. I would like to see them insist on being neutral and even aggressively insist on being neutral and want to be the beer that the left and the right both like to drink And build that into their commercials because I think in spite of the fact that people are polarized People don’t really want the world to be polarized and I think you know that you know, it might You know, it might be not just a niche but a very attractive niche to be the company that you know that that welcomes You know everybody from the far left to the far right to be their customer.
And, you know, not just, you know, that aggressively welcomes everybody from the far left to the far right to be their customer. Now, obviously, you know, that might be feasible. I hope it’s feasible for a beer company. It’s probably not feasible for an NGO, you know, and it’s obviously not feasible for a government, which is going to be, you know, elected by one team or by the other team. But at least it seems, you know, I have hopes that maybe corporations can aggressively and sort of, you know, transparently resist polarization and make that a branding point. But, you know, I’m not working anymore. If I were working, I would need to, you know, need to figure out whether that actually worked or backfired badly.
Yeah, yeah, no, It’s going to be a challenge, I agree with you. Um, can you think of any leader or a company that’s doing a great job of managing its reputation well in the market and is corporately socially responsive to use your term?
Not across the board, not across the board. I come across examples of companies handling specific controversies really well in ways that are responsive and transparent and that makes me feel like if I were advising them, I wouldn’t have anything to say that they don’t seem to already know. But then the same company three weeks later, you know, handle something else really badly. So it seems to be not so much the corporate culture as either good luck or the right person in charge this time and the wrong person in charge that time. Okay. I mean, what about you? Do you see any companies that reliably do it right?
I think companies battle to reliably do it right. I think the three areas that you talked about are very true and the scale shifts all the time. So, at no one time is anybody doing it well all the time. You know, as you rightly said, there’ll be some who deal with an issue particularly well or a crisis particularly well one day, but then a month down the track or a year down the track, you go, ‘Is that the same company? Why did they stuff up so badly?’ So yeah, I battle to find companies over the long term who really get this right because society moves. You talked about polarization. That’s only come about strongly over the last number of years. Companies, I think, a battling with that because you damned if you do, damned if you don’t.
Yeah, yeah, I mean, I absolutely, absolutely. You know, but even even before the polarization of recent years, I mean, among, you know, two of the companies that I work with most for decades were BP and Rio Tinto. And I can give you stunningly good and stunningly bad. In fact, I don’t even have to give you, you could give me stunningly good and stunningly bad examples from those two companies.
But I mean when they do it well, you know they can do it well and then they turn around and do it horribly. So it does happend that way.
I want to thank you for your time, but before we end I do want to ask is there anything that I haven’t asked you or is in the back of your mind that you’d like to mention about this topic that you still feel you need to share?
Let me look and see if there’s anything I wanted to say that I didn’t say. Well, one thing, it may not be terribly relevant to you, but I feel it pretty strongly. Bad though they are, at what I call outrage management is the kind of thing we’re talking about. Corporations are way better at it than anybody else. You know the worst clients I ever had were all NGOs or public health agencies. I mean, they’re horrible clients. I mean WHO was probably the single worst client I ever had. Uh. You know. I don’t know if I … well, so what? I’m retired so I can say that, you know?
(laughing) We don’t have to publish that.
There are reasons why that’s true I think. They they feel like they’re altruistic you know so the concept of the noble lie comes into play. Public health organizations for example, are much more deeply committed to getting you to do the right thing than they are to telling you the whole truth. So, they will tell you … if they want you to get vaccinated, they will cherrypick facts. They don’t usually actually lie, but they do horribly misleading cherry-picking of data in order to convince you to get vaccinated. When I would say to a public health client, “why are you being so dishonest,” you know, and I would say “it’s going to come home to roost.” Eventually they will figure out that you can’t be trusted and then they won’t trust you even when you’re telling the whole truth. And they would say “well maybe someday but so far you know our dishonesty is saving lives.”
And basically they were right until COVID. I mean I spent 30 years telling public health agencies that someday you will reap the whirlwind and I was wrong until I was right. Trust in public health. Not that I wanted to be right but you know trust in public health cratered at least in the U.S. during the pandemic. But you know they feel virtuous; they’re giving up the big bucks so they feel entitled to be a little arrogant, a little full of themselves and their experience. They don’t get caught. There are an awful lot of journalists that would like to expose evil in high places in corporations, a hell of a lot of journalists looking for evil in high places, in NGO’s or in public health agencies. You don’t get a prize for exposing the downside of the good guys. You get a prize for exposing the bad guys. So that their experience is they don’t get caught.
On the rare occasions when they get caught, they’re readily forgiven because they are the good guys and we’re depending on them to to save our ass. So, we don’t want… you know, we can afford to hate GE, to hate BP. We can’t afford to hate the public health agencies. So for all of those reasons, they get into very bad habits.
The profit motive is not as dominant in corporations as it should be. They really are more interested in self-esteem than in profit, but at least they have the profit motive. You know, NGO’s, they have some kind of goal. I mean, I guess and public health agencies have some kind of goal, but it’s not nearly as measurable as the profit, so they are much more vulnerable to be hijacked by self-esteem issues and by their own outrage.
That’s about the only thing I wanted to say that you know didn’t come up in the hour.
That’s fine, Peter. Oh, look, thank you so much for your time. I will send you the recording once it’s up and ready. I’ll drop it off to you in a, I think it was an MPV4 file or something like that. And I’ll send that to you, but have a look at it. And then what I’ll do is when I’m ready to publish the paper, I’ll obviously send it to people who’ve participated and you can edit your quotes if you feel that you don’t want to be quoted on certain things or I’ve got something wrong.
Okay. Although you know, I mean, if you’re true to the dialogue we just had I’m not about to change my mind. You know, I’m not about to take back what I said, including wgo was the worst client I’ve ever had. I’ll stick with that.
Thank you very much. I’m glad we finally met. Now I can follow your career with interest and I’m delighted to have spent an hour
Yeah, me too, Peter, lovely to meet you too.
Good
Good to meet you as well. Okay, thanks a lot. Bye-bye.