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Friday, 27 January 2012

A brave new (digital) world?

By Gauri Mahtani, Consultant, ReputationInc

Re-reading my colleague Jonathan’s fascinating insight into the world of Eastman Kodak, I cannot help but smile at the thought of a global business head convincing his audience that he was going to “drive [digital] back into the sea”.

Admittedly, it’s much easier to snigger with hindsight firmly on my side. That global leader was not alone in articulating a prophecy which would eventually prove to be completely off the mark.

In 1943 for example, Thomas Watson, then chairman of IBM, predicted a world market for five computers.

Even more bizarrely (in my opinion at least), in 1962, Decca Recording Company rejected the Beatles, claiming that guitar music was on the way out.

I could go on, but if your interest has been piqued, Wikipedia probably has an entry on incorrect predictions. If you’re really interested in the subject, there’s Facebook, Twitter, YouTube and a plethora of other social media platforms for you to share your views on fallible futurists. The myriad of possibilities which digital technology and the internet have opened up – from the personal to the political – are relatively well known, well understood and well documented.

Which is why last week’s virtual protests against the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) didn’t surprise me. It’s one thing to be prepared for future challenges and opportunities (more on that another day), but what if the future is NOW?

Digitally mobilising grassroots support, in the manner seen last Wednesday, is far from a weak signal or emerging trend. It is a current reality which has major implications on corporations and legislators alike. Which is why proponents of SOPA and PIPA should have seen the protests (and its potential impact) coming.

Thanks to the protests, I spent a very enjoyable lunchtime on Wednesday doing the following:

Following Guardipedia, the Guardian’s tongue-in-cheek antidote for readers suffering from Wikipedia withdrawal symptoms

Congratulating myself on figuring out how to circumvent the Wikipedia blackout

Skimming through countless Facebook posts and Twitter feeds (The most scintillating of which are too rude to repeat)

But I digress. Beyond being gleefully distracted and amused, the protests testify to the changing dynamic of lobbying and campaigning processes, and the increasing role of social media in galvanising grassroots support.

Don’t get me wrong here – I’m not for a moment advocating that legislative processes have previously operated in a vacuum, or that public sentiment and scrutiny or consumer-led activism have not figured prior to the digital revolution.

However, new technologies have undoubtedly amplified the speed, scale and impact of getting one’s message across, reaching out to key influencers and opinion-formers, and galvanising grassroots support in general, with its attendant risks and opportunities. A multitude of new terms have been coined to describe this phenomenon (ranging from social lobbying to e-campaigning and e-activism) and with them have emerged an equally diverse range of perspectives on the effectiveness, ubiquity, cohesiveness and longevity of online activism.

One thing is certain though. Last week’s ‘watershed moment’  could have easily been anticipated, and even prevented. The signs were all there – in the here and now, and not even in a remotely distant future.

Questioning whether the drafting of SOPA and PIPA is well-intentioned is a moot point. Online piracy is a serious issue, and demands a serious solution. And in today’s environment, it is more important than ever to craft such solutions by listening to multiple stakeholders, engaging in constructive dialogue and engaging experts. No matter how sophisticated one’s traditional lobbying tools may be, antagonising and excluding key players is no longer a viable option. As a contributor to Forbes tellingly noted, after last Wednesday, “the time for constructive dialogue, which Congress and industry groups had overtly snubbed all year, was over”.

Friday, 20 January 2012

Eastman Kodak: Distorted Images

By Jonathan Chandler, Partner, ReputationInc.

Jonathan was Communications and Public Affairs Director Europe at Eastman Kodak EMEA from 1998 to 2000.

Rochester, New York,  1999. We weren’t sure if the world was going to end with Y2K or we were going to finally realise Prince’s promise of the party of all-time. Or both.

Certainly those 80,000 of us working at Eastman Kodak didn’t have bankruptcy on our minds.  The future looked scary. But filled with possibility.  Some analysts predicted the stock would hit a $100. Other's were more sceptical.

A year earlier at the bi-annual photo-fest in Cologne our CEO Dan Carp took a brave view into the future. It was a critical moment for me in the business of forecasting and risk.

He boldly and correctly predicted that we were entering an “explosion” of picture taking.  How right he was. He described (first time I'd heard of it) a strategic inflexion point.  The chart showed how our business would either accelerate upwards as part of this revolution... or  decline at an exponential rate if we didn't ride the curve.

That’s what the chart said. It was an honest forecast of the unknown future.

He rightly described how digital would transform the way we use, share, relate to pictures. And that was even before anyone dreamed of Facebook.

There was excitement about a digitally-created photo book for....say $100. A photo CD for £15.   A 2 megapixel camera for $200 (check your phone, that "free" camera you have in your hand has at least twice the power of the brick you could have bought back then).

This was not a leader afraid to confront the future or indeed to predict it.

So what was Kodak doing about it?

At the same show the stalwarts from "consumer imaging" division were lauding the breakthrough of an APS camera (the one with the little film cartridge) that could actually allow you to see the shot you had just taken. On a tiny digital screen.   And if someone blinked, take it again, and expose another ray of light on your silver halide film until all 24 frames were exposed. Progress along the curve?

Across the hall the "digital and applied imaging" crowd - West Coast dudes recruited from silicon valley hot-houses  - were offering gear that you needed a PhD to operate. Billions of dollars were being poured into the loss-making digital business.

But it seemed  they were either chasing the "golden age" by grabbing the camera business back from Japan at "any cost"  or driving people back to the 60s and the joys of  "home processing", when my Dad was developing film in the bath (not at the same time, that would be dangerous, although I wouldn't put it past him.)

It was the active disruption and confusion of a consumer pattern that Kodak itself had established...9 times in a year in Japan, six times in the US, 3 times a year in Europe, and half a time a year in China... People "on average" would take a roll of film, drop it off and come back in an hour or a day and enjoy.  Not that fast moving,  in the overall pattern of consumer consumption.  I created about 50 facebook albums last year (processing cost, nil) but spent a whole lot more with Moonpig.com  doing greetings cards, than ever did on Kodak film.

I always felt if we had just called the chip an "e-film" and encouraged people to take it to Boots or Wal-Green rather than convert their loft into a digital darkroom... We might have bought some more time.

The tragic conclusion to the "strategic inflexion" presentation - which was otherwise spot on - was that silver halide would continue to grow.   Because as more people use pictures,  film and photographic  paper will be a smaller but still growing part of the mix.  But what if not? Who was going to fund the (good or bad) investment in digital?

 The Rochester campus was about six miles long, has its own coal-burning powerplant, and then "only" employed 35,000 people.  Hard to accept a different future without film when you sit in the citadel at the centre of all that.

Forecasting future scenarios takes more than vision. That is arguably the easier part. For an organisation, the challenge is to see itself. To accept that the assumptions on which its franchise, its future, is based are by definition fragile.  Be it technological, environmental, regulatory.....no fortress is unassailable.

One of the most powerful reasons to conduct a serious forecast of future issues is to give context to "weak signals" of change. The one's that inconveniently don't fit into the business plan but become a tidal wave a few years later.  But even if the signals are loud and clear organisations demonstrate an amazing resilience to change.  Visionaries throughout history tend to get short shrift from the status-quo-ers. So anyone serious about future reputation or policy challenges in a major corporation needs to exhibit equal resilience and an adventurous mind. We're proud to work some clients who have just that.

At Kodak, the vision had been set as early as 1998 and surely now we were all pulling together to "inflect" in the right direction.

We even had a booth at the eery void called the Millenium Dome to demonstrate our participation in the brave new world. Assuming there was one when the clock struck twelve.

Back to Rochester, 1999. IT analysts were getting filthy rick fixing our clocks,  Prince was limbering up for the big show and Francois Mitterand was asking "what's it for?"  (it's the best concert venue in Europe now, stupid).

At a gathering of the PR community,  we were addressed by the various global business heads. The Yamamoto-clad cyber gurus made us feel intellectually bankrupt by describing products that you clearly needed to be cleverer than us to find a use for.

Meanwhile the Brooks Brothers consumer suits told us about exciting new yellow boxes, but nothing - at all - that mentioned digital.

I turned to my "digital and applied" colleague for clarity.  "Oh, they're not interested", she said.  

So I dared to ask the question: "You haven't mentioned digital once, I just wonder what your...opinion is?"

The gent looked at me with some surprise.  He consulted with his colleague who was sharing the podium.  I presumed he was going to straighten up the "narrative" on the partnerships with the "greats" of the era like AOL or AT&T.

But instead, he delivered a line that could have been a straight from "Sands of Iwo Jima"....

"We're gonna drive 'em back into the sea."

Friday, 13 January 2012

Managing the reputation of online platforms

By Jeremie Guillerme, Consultant, ReputationInc

A lot has been written on how companies can leverage social media to enhance their corporate reputation, but there is currently little thinking around the emerging topic of reputation management for social media themselves. Online social platforms are a particular breed of business, where one of the reputation pillars – the ‘product’, i.e. online content – is generated by its users, be they merchants, website owners, or members of the public.

Facing increasing reputation risks such as regulatory scrutiny, media criticism and consumer activism, social media platforms will have to grow and defend a reputation of their own if they want to continue to operate their business unimpeded.

Reputation risks of online platforms

Most user-generated content platforms have already learnt the importance of reputation management the hard way. In the past years, the sector has suffered various attacks, which fall under three categories:

- The debate around inappropriate content. Online platforms need to wage a permanent war on illegal or inappropriate content, as any content is likely to be noticed by both traditional and online media, and lead to a reputation crisis. An interesting example is the issue of counterfeits sales on Ebay, which posed a serious threat to the company’s licence to operate.

Conversely, online platforms need to be very careful about what they consider inappropriate to avoid accusations of censorship. In several instances, Facebook’s extremely strict policy on nudity has attracted flak from its users. For example, the group Hey Facebook, breastfeeding is not obscene!, has attracted nearly 260,000 members. The complicated arbitrage between what is inappropriate and what isn’t still has to rely the company’s deep understanding of its user community.

- Lifestyle issues. Social media have changed the way we live, which has lead to increased scrutiny from all sides. Researchers and NGOs send warnings about health and addiction, while businesses, concerned about confidentiality and employee productivity, are banning them in the workplace. In addition to these ‘sectoral’ threats, social media are often held responsible for the conversations happening on the platform, as traditional media and the general public tend to ‘blame the messenger’. For instance Facebook and blogging platforms have been said to encourage eating disorders amongst young girls.

- Privacy issues. The way the terabytes of personal data users give away everyday is the primary concern of regulators and users. Each change in Facebook’s privacy policy now attracts significant scrutiny, and quite often, leads to petitions of users against it.

Building reputation for online platforms

In this difficult context, and with little or no content of their own, how can online platforms build their corporate reputation?

In the past year, social media have explored some interesting avenues:

- Using data for the greater good. Social media’s role is now recognised as crucial in tracking epidemics. Just a few days ago, Twitter has been praised for yielding data that helped authorities manage the cholera outbreak in Haiti, while Google mines its search data on an ongoing basis to monitor flu trends.

- Owning an issue. In the UK, Google has launched the "Good to Know" campaign on internet safety, in partnership with the Citizens Advice Bureau, which tells internet users how to choose a strong password, recognise phishing emails, amongst other basic safety tips. Doing so, Google harnesses its activity to a major societal concern, and it positions itself as an authority regarding online security, giving the company a credible vehicle to engage with its stakeholders and telling them how Google is handling personal information.

- Maintaining trust by improving transparency on personal data usage. Important progress has been made in this regard. Facebook made considerable efforts to make it easy for its users to know what type of data they are sharing with whom amongst their friends. However, information on the way personal data will be used for commercial purposes is still fuzzy, basically coming down to one, tautological point: “you are allowing us to use the information we receive about you”.

While these initiatives may have reached their objective and delivered some reputation benefits, major online platforms will have to much more if they want to demonstrate a positive societal value, maintain user trust, and preserve their licence to operate.

This means: growing and diversifying their portfolio of initiatives, and getting them more publicised.

Friday, 6 January 2012

How the US model of campaigning shaped politics across the world

By Andrew Hammond, Associate Partner, ReputationInc

The eyes of much of the world will this coming year be on the US presidential and congressional elections as Democrats and Republicans fight it out for control of the White House, the US House of Representatives, and the US Senate.

The 2012 US federal ballots will be the most expensive in history, with some anticipating that Barack Obama might even become the first presidential candidate in history to raise more than 1 billion dollars for his re-election effort.  Overall, it is estimated by the Center for Responsive Politics that the cost of the presidential and congressional campaigns could be a mammoth 6 billion dollars.

Given the vast amount of money spent on campaigns in election years, a significant mini-industry of US political consultants has long existed.  However, what is less widely appreciated is how common-place it has become for many of these same people to work behind the scenes in other countries, including here in the United Kingdom.

Indeed, it is estimated that US political consultants have already worked in more than half of the countries in the world supporting campaigns and elections.  This year, that tally will only grow as US consultancies reach out to more uncharted international territory.

In early 2012, key potential targets for new ‘work’ will include:  the Egyptian legislative and parliamentary elections in January and March respectively; the presidential elections in Turkmenistan and Yemen in February; and potentially the Russian presidential election in March.

While the success of these internationally-mobile political consultants is mixed in terms of electoral outcomes, they have nonetheless had a lasting effect, prompting what some have called the ‘globalisation’ of the political communications industry.  Or, in the eyes of critics, the international triumph of spin over substance, which has tended to promote more homogenous campaigns with a repetitive, common political language.

As James Harding, the editor of The Times of London, documents in Alpha Dogs, the origins of what has become a mini-industry lie in the 1970s.  It was then that US political consultants (at the vanguard of which was the Sawyer Miller agency) began exporting US political technologies and tactics into Latin America and ultimately across the globe.

A key underlying premise of the industry is that such technologies and tactics can achieve political success just about anywhere. Thus, many foreign countries are sometimes deemed as mere international counterparts of US election battleground states like Pennsylvania and Ohio.

What started as international elections and campaigning work soon branched out into providing more foreign governments, leaders and bodies such as tourism and investment authorities with international communications counsel and ultimately what is now known as ‘country branding’.  Country branding is founded (like disciplines such as public diplomacy) on the realisation that, in an overcrowded global information market place, countries and political leaders are, in effect, competing for the attention of investors, tourists, supranational organisations, non- government organisations, regulators, media and consumers.

Some countries may only get a few opportunities a year to make a favourable impression and get their ‘side of the story’ across.  In this ultra-competitive environment, reputation can be a prized asset (or potentially big liability) with a direct effect on future political, economic, social and cultural fortunes:

In some cases, a single highly damaging episode can fundamentally damage a country's standing - as China found following Tiananmen Square.  In such cases an approach involving a long recovery time to rebuild what is lost is often required.
A country may simply wish to promote an opportunity based on a specific single goal, such as wanting to attract more foreign direct investment or increasing tourism -- as the current ‘Incredible India’ campaign illustrates.
Other states, for example Georgia, Rwanda and the Maldives, may want to establish a presence in the public mind because of fears about a specific issue (such as Russian preponderance, building sympathy amongst donors and investors and tourism in the short term, and/or climate change in the long-term respectively).

In general, the most effective country strategies align all key stakeholders (across the public, private and third sectors) around a single powerful vision for global positioning.  A good example here is New Zealand which, since the 1980s, has transformed itself from earlier perceptions of being a relatively remote backwater which, despite its scenic beauty, was not a major global tourist destination.

Especially in the midst of a difficult economic climate in the early 1980s, partly caused by the country's loss of preferred trading status with the United Kingdom (one of the nation's then major export markets), the ‘New Zealand Way’ initiative recognised that a strong country reputation for quality would be hugely beneficial if the nation was to compete in global export markets.  Here, the massive untapped potential of the country's natural environment was recognised, not just in terms of natural produce exports, but also for building a destination brand for tourism and outdoor sports.

The New Zealand example underlines how a simple, unified cross-sectoral vision can be enormously powerful.  To be sure, the country is not unique in having an unspoilt natural environment and quality produce.  But it has managed to capture the world's imagination with its consistent branding that has put natural values firmly at its core.

Today, of course, it is not just US political consultants who are blazing a trail in the industry.  London, for instance, has become a major country branding centre fuelled by its favourable European time zone between Asia, the Middle East, Africa, and North America; and the headquartering within the city of key global publications such as The Economist, Financial Times, and the Wall Street Journal Europe.

Looking to the future, demand for country branding is only likely to continue growing given the increasing complexity and overcrowded nature of the global information market place.  Indeed, in Asia, Africa and the Middle East, much of which remains unchartered territory for the industry, globe-trotting firms may be on the very threshold right now of some of the most challenging work they have yet encountered.