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RISKY BUSINESS
15
REALITIES &
15
RULES
FOR MANAGING REPUTATION ONLINE
EACH YEAR BRINGS A NEW SET OF CHALLENGES TOLEADERS.
Yet, one challenge that not only endures but alsogrows in importance is managing and protecting companyreputation. Raising this challenge even urther on the lead-ership agenda is the evolving online community. Here, thesound o splintered stakeholders, intensiying media scrutiny,escalating scandals, globalization, and demands or stron-ger economic governance and corporate responsibility hasreached deaening proportions.The Internet’s inuence is sweeping through corporate corridorsand boardrooms, suddenly illuminating beore the public notonly the latest in progress and innovation but also a company’ssecrets. Nearly overnight, many companies transormed romsteel-ramed monoliths to glass houses. Risks that did not ex-ist a decade ago are now on ull display–internal e-mails goingastray, negative online campaigns by dissatisfed customers,and online grumblings (“digital picketing”) rom disenchantedemployees, bloggers and any one else who has an opinionto voice.Online company reputation risks acing leaders are alreadygrowing more complex as new digital platorms–social networks,blogs, virtual realities, Twitter and RSS–rapidly gain acceptance.No digital eraser exists to wipe away company missteps. To-day we are witnessing both the positive and negative eatureso this new era o transparent corporate behavior and instantcommunications: the possibilities or building long-lastingcompetitive advantage coupled with unprecedented threatsto corporate reputation.Global public relations frm Weber Shandwick recognizes thatcompanies need to better understand how to successullymanage their reputations in an always-on and always-openmarketplace. Leaders are increasingly asking questions abouthow they can build, enhance and deend corporate reputationwhen it is continually under siege, and redefned, by onlineand oine communities.On behal o clients and companies worldwide, WeberShandwick commissioned the Economist Intelligence Unit(EIU) to conduct a worldwide online survey o 703 seniorexecutives rom 62 countries. The survey,
Risky Business:Reputations Online 
™, was conducted in June and July 2008.Sixty percent o companies in the sample generated morethan $500 million in annual revenue.This executive summary reveals 15 realities about how companiesand their leaders are managing corporate reputation in a digitizedworld. The 15 realities are ollowed by 15 rules that show businessleaders how to manage company reputation online. For the ullreport, please visitwww.online-reputations.com.
A surey conducted in cooperation with
© Weber Shandwick 2009
 
1
 
Reputation thReat LeveL is high
A striking 67% o top executives regard their company’sreputation as vulnerable. This fnding shows that ex-ecutives clearly recognize the shiting reputational tides thatsurround their companies. Due to heightened economicconcerns since this survey was conducted, this threat levelis likely to rise.
2
Reputations aRe ReveaLed onLine…But not CompLeteLy
Nearly all executives surveyed – 98% – “use” the Inter-net to evaluate company reputation. However, less than 6 in 10(57%) fnd the Internet “useul” or making fnal judgments.
3
 
naivete Can Lead to suRpRise
Most global executives think more oten about theircompany’s reputation than their own. Although they arevery ocused on company reputation, many executives maybe disregarding their own, with ewer than 4 in 10 execu-tives (38%) reportedly doing an online search o their ownnames during the 30-day period beore they participated inthe survey.
ReaLities
LeadeRs need to KnoW
peRCentage oF eXeCutivesWho thinK aBout Reputation“veRy oFten/sometimes”
95%82%
COMPANY’SREPUTATIONPERSONALREPUTATION
high/modeRate thReat LeveLto Company Reputation today
NON-CEOs/CHAIRsCEOs/CHAIRs
HigH
   T   H   R   E   A   T   L   E   v   E   L
LOW
67
%
56
%
4
 
What…me WoRRy?
CEOs/chairs in particular – a ull 100% – requently thinkabout their company’s reputation. Despite this universalpreoccupation with company reputation, they perceive a lowerthreat level to their company’s reputation than those reportingdirectly to them or below them.They are also much less anxious about online risks to reputationsuch as confdential or leaked inormation appearing online,dissatisfed customers or critics (“badvocates”) campaigningagainst the company, company e-mails or instant messagesbeing used against the company, and employees – current andormer – speaking out critically against the company.
5
 
eXeCutives aRe onLine Reputation sLeuths
Nearly two-thirds o executives go online to uncoveractivities o business rivals and partners, product com-plaints and new employment opportunities. It is clear thatexecutives are now staking their claim to a gold mine ocompetitive intelligence within the Internet.
 
6
 
tRaditionaL media outRanKs neW mediaas Reputation ReFeRee
Global executives say that traditional media (television,radio and newspapers) plays a greater role in deciding rep-utational ates than new media (Web sites, blogs and socialnetworks). The study also ound that global executives arefve times more likely to trust traditional media appearingonline as they are to trust strictly online media (72% vs. 13%,respectively). In act, the debate over separate oine and onlinecommunications will eventually disappear as companiesrealize the benefts o integrating all their media. WeberShandwick calls this “inline” communications.
7
 
FiRst stop: Company WeB sites
According to 99% o executives surveyed, the leadingonline source or company inormation is the corporateWeb site. Although it may not singlehandedly have the su-preme power to build a positive reputation, the company Website is digital ground zero or reputation-building among theexecutive class.
8
 
oLd and neW Reputation spoiLeRs
By ar, the greatest perceived cause o reputation dam-age among global executives is negative media coverage(84%). In today’s distressed economic environment, ew com-panies are escaping media attention about their perormance.
Source: Factiva mentions in global major news and business media (terms: “media” and leak”)
“media LeaKs” in gLoBaL media
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
020004000600080001000012000
   M   E   N   T   I   O   N   S
+ 1 1 8 
% 
9
 
LeaKs gush dangeRousLy onLine
Global executives regard confdential or leaked inor-mation appearing online as a top risk to their com-pany’s reputation (41%). Their concern is understandableconsidering that in the global media, the words “media” and“leak” appeared together in 6,449 stories in 2008, a 118%increase rom 1998. Clearly, just the tip o the iceberg orinormation leaks.
10
 
Reputation assassins aRe haRd at WoRK
Today, the Internet provides innumerable platormsor current and ormer employees to strike, usuallyanonymously, at a company’s reputation. Employee criticism(41%) tied or frst place with leaked confdential inormationonline as the greatest online reputation risk to the company’sreputation. As employees wrestle with declining pensionsand possible layos, reputation bandits will be even harderat work online.Despite high anxiety over potential employee sabotage, onlyabout one-third o executives (34%) know, or admit to knowing(“don’t ask don’t tell”), o a ellow employee who badmouthedtheir company online. Leaders may naively expect that theiremployees are abiding by company principles about theironline activities.
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