“Occupy Wall Street shows that corporations are not immune to the anger that is directed their way, and the world has greater expectations of businesses now,” observed Peter Firestein, president and CEO of Global Strategic Communications. While he said OWS’ goals have not yet been clearly defined, the movement underscores the notion of “corporate exception, the belief that the standards of conduct at your company are different than the standards outside.” He views this misperception as what people are angry about.
Firestein spoke about his book, Crisis of Character: Building Corporate Reputation in the Age of Skepticism during an AMA/American Marketing Association New York chapter event on Wednesday. After the jump, a few key takeaways.
A corporate culture with well defined values where dissent is allowed leads to a strong reputation. “People judge companies the way they judge politicians, by their values,” Firestein noted. “Companies must understand their vulnerabilities, be open to tough discussions and diverse points of view.” In what he recognized as far easier said than done, that also means having a “safe zone where employees are encouraged to call attention to problems without encountering penalties.”
Social media has made corporate reputations even more transparent. “This social phenomenon has changed corporate life and now it’s like living in a glass house,” Firestein observed. “Companies should be informed by its effect but not be dominated by it.” He said the ultimate goal regarding all the information a company collects about itself should be to end up with a balanced and accurate view.
The public’s acceptance of products is closely tied to their acceptance of companies. Firestein talked about Coca Cola, which adapted to changing multicultural circumstances in a productive way. He explained that in one region of India, Coke was accused of manipulating the water supply in a way that was more conducive to its local interests. Eventually the company made a global commitment to become “water neutral” by 2012 by saving water through conservation and recycling programs.
Companies with strong reputations enjoy far-reaching rewards. “They have higher market valuations and recruit the best talent. They get the benefit of the doubt in times of crisis and they serve as the standard against which competitors compare themselves,” Firestein emphasized. In other words, their windows have bulletproof glass so they might crack but they won’t shatter.