Face Value: Your Reputation as a Business Asset

FACE VALUE
Your Reputation as a Business Asset
A report from Coutts & Co by Michael Hayman

A REPORT FROM COUTTS & CO

FACE VALUE
Your Reputation as a Business Asset

A report from

Coutts & Co
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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

CONTENTS
04 05 06 08 10 14 16 18
ABOUT THE REPORT The importance of managing reputation effectively THE BANK AND THE AUTHOR About Coutts & Co and author Michael Hayman THE CONTRIBUTORS Profiles of those who have provided key comment FOREWORD By the Earl of Home, Chairman, Coutts & Co INTRODUCTION Author Michael Hayman sets the scene THE VALUE OF REPUTATION Why reputation is now one of the most crucial business assets THE QUESTION OF TRUST A look at people’s waning faith in authority A CULTURE OF MISTRUST Peter Kellner on how public scepticism is affecting reputation

20 22 24 26 28 32 34 36

THE MEDIA The Rt Hon the Lord Heseltine on managing the press ME, MYSELF AND MY BRAND How CEOs have become the personification of their companies MADE TO MEASURE Emma Willis on running an eponymous business IF YOU CAN’T STAND THE HEAT Tom Aikens on why he named his restaurant after himself ALL BUSINESS IS PERSONAL The role of the business leader

THE PERILS OF ‘PERSONALITY’ Robin Saunders on the pitfalls of losing control of your reputation REPUTATION AND THE LEADER Doug Richard on the risks and opportunities of public life HOW NOT TO DO IT Anatomy of a reputational meltdown

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38 40 42 44 46 48 50 52

HOW TO DO IT Best practice in reputation management NET EFFECT Embrace Web 2.0 or brace for impact KNOW YOUR STORY Stay on solid ground

54 56 58

CONCLUSION Reputation: the undiscovered country COUTTS OFFICE DIRECTORY The Bank’s locations across the UK USEFUL CONTACTS How to reach the contributors

SECRETS OF SUCCESS Getting the most out of an interview TRIAL BY MEDIA Max Hastings on the importance of image management KNOW YOUR RIGHTS Forearmed is forewarned

USING THE LAW Alasdair Pepper on how the law can help protect your reputation MANAGING YOUR REPUTATION Advice on how to maintain a good public profile

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

ABOUT THE

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“Reputation, like any other company asset, needs to be monitored, nurtured and managed”

REPORT
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ntangible but pivotal, reputation is a prized commercial asset. Face Value:Your Reputation as a Business Asset examines the role of today’s business leaders and the value of their own personal reputations in the making or breaking of the companies they run. There are many tangible factors that make up the reputation of a business. If you do not have a good product or service, you do not get on the pitch list. In an increasingly competitive marketplace, companies need to extract value and advantage wherever they can. Given that the media often seek stories about people, rather than organisations, many companies have sought to boost the personal profile of the business leader as a means of promoting the company as a whole. This is a valid and valuable strategy, but it is also a risky one. Reputation, like any other company asset, needs to be monitored, nurtured and managed. This report delivers insight into the business leader as the chief representative for a company on the public stage. It interrogates the idea that business leaders have a ‘face value’ and argues that this personal reputation is the canvas upon which much future business success will depend. It brings together a personal viewpoint of the author, Michael Hayman, based on his own experience in business, politics and the communications industry, the sentiment of a series of interviews with business leaders, research from YouGov and the views of a number of expert witnesses who have developed a unique perspective on the issue.

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BANK and the AUTHOR

Michael Hayman
Michael Hayman is Chief Executive of The Communication Group plc, a leading public relations consultancy. He provides senior communications counsel to clients including De Beers Group, the Government of Dubai and Rio Tinto. Michael is an accomplished speaker and author, regularly addressing global business audiences, governments, political leaders and business media on a range of communication issues. He was previously a Director at WPP consultancy Hill & Knowlton. Prior to this he was an adviser to the Foreign & Commonwealth Office, to a former Secretary of State for Employment and a senior member of the Department of Trade and Industry Parliamentary Select Committee. He is a Fellow of the Chartered Institute of Public Relations, a commissioner to the Edinburgh festivals, and one of The Observer newspaper’s Courvoisier The Future 500, a showcase of the UK’s top business talent.

Coutts & Co
Coutts & Co is one of the UK’s leading private banks. It has provided pioneering private banking services for more than three centuries. Today, Coutts expertise meets the financial needs of 100,000 diverse individuals worldwide. The issue of reputation has always been central to Coutts business. As far back as the 19th century, Thomas Coutts endorsed the earlier principle of safeguarding his Bank’s reputation through ample and easily available reserves, but also by putting a great emphasis on the influence of the individual. As he saw it, the honour of his family name, his ‘proud but modest’ character, and his qualities of competence, directness, friendliness and natural caution were what would protect the reputation of Coutts. He felt very strongly that the responsibility for that reputation lay with him. Despite taking partners into the business, he never placed the onus of the public perception of the Bank onto others. Today, the public face of Coutts encompasses each and every one of our employees, who play a vital role in maintaining Coutts reputation as a highly professional, respected and trusted organisation. From our private bankers on the front line to the staff who support them in a variety of guises, our employees embody the timeless Coutts values of trust, understanding and expertise. Understanding the vital role of reputation in building sustainable enterprise is just one way we can support our clients in their business interests.

The

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

THE CONTRIBUTORS
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The Earl of Home
Lord Home was appointed Chairman of Coutts & Co in June 1999 and became Chairman of RBS Coutts Bank Ltd in March 2000. Lord Home is an active member in the House of Lords and was appointed Opposition Front Bench spokesman on Trade, Industry and Finance until his resignation in December 1998. He is also Chairman of Grosvenor Group Ltd, MAN Limited and a Board Director of The Dubai Financial Services Authority (DFSA).

The Rt Hon

the Lord Heseltine
Lord Heseltine was a Member of Parliament for the Conservative Party for the Borough of Henley from 1974 to 2001. He has held many senior political positions, including Secretary of State for the Environment, Secretary of State for Defence, President of the Board of Trade and Deputy Prime Minister from 1995 to 1997. He is also a successful entrepreneur, founding Haymarket Publishing Group, the largest private magazine publisher in the UK.

Peter Kellner
Peter Kellner has been Chairman of leading market research organisation YouGov since 2001. During that time he has advised on polls and public opinion to institutions, including the Bank of England, the Foreign Office and the Trades Union Congress. Previously, he was a journalist and political commentator for more than 30 years, for a variety of media, including The Sunday Times and the BBC’s Newsnight. He has also been a visiting fellow at Nuffield College, Oxford and the Institute for Policy Studies.

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Doug Richard
Doug Richard is a highly successful UK-based Californian entrepreneur. Among other things, he is the founder and Executive Chairman of Library House, an investment research and consulting firm. He has recently shot to prominence as a ‘dragon’ (investor) in BBC’s Dragons’ Den. In 2006, he received the Queen’s Award for Enterprise for his work promoting, developing, and helping entrepreneurs.

Emma Willis
Emma Willis is the founder of Emma Willis, a custom shirt making company. She trained at the Slade School of Art before starting her business in 1987, designing and making men’s shirts. In 1999, she opened her elegant and intimate shop in Jermyn Street, London. Her philosophy is to adhere to the original traditions of English shirt making, using luxurious Italian and Swiss cottons, silks and linens, many of which are exclusive to her collections. Emma Willis is men’s magazine GQ’s ‘Shirt Style Shrink’, answering a host of questions on the subject.

Sir Max Hastings
Sir Max Hastings is an acclaimed journalist, editor, historian and author. He became a foreign correspondent and reported from more than 60 countries and 11 wars for the BBC and the Evening Standard. After ten years as Editor and then Editor-in-Chief of The Daily Telegraph, he returned to the Evening Standard as Editor in 1996 until his retirement in 2001. He received a knighthood in 2002.

Robin Saunders
Robin Saunders is a Managing Partner of Clearbrook Capital Partners. She first worked for Northern Trust in Chicago and then moved to London with Citibank. After a stint at Chemical Bank and Deutsche Bank, she joined the German state-owned WestLB in July 1998. In 1999, she helped turn around Bernie Ecclestone’s Formula One through a £792m securitised bond issue and brokered a £426m loan to finance the new Wembley Stadium. After leaving the bank in 2004, she established the private equity investment firm Clearbrook Capital Partners.

Tom Aikens
Tom Aikens is a master chef and the founder of Tom Aikens restaurant. He left London in 1993 to work under Joel Robuchon in Paris and Gerard Boyer in Reims before returning to Pied à Terre as Head Chef in 1996, where he became the youngest British chef ever to be awarded two Michelin stars. He spent a year as Head Chef at La Tante Claire before opening Tom Aikens in April 2003. The restaurant won a Michelin star in January 2004, and in 2005 it was named as the eighth best restaurant in the world in Restaurant’s Top 50.

Alasdair Pepper
Alasdair Pepper is one of the most experienced media lawyers in the UK and has been a partner in Carter-Ruck, the leading defamation and reputation management firm in the country, since 1986. He devised the MediaAlertService, which enables the firm to efficiently handle and assist clients with media interest. He is the Secretary of the Media Section of the International Bar Association and has spoken on the issue of reputation at conferences around the world.

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FOREWORD
THE EARL OF HOME, Chairman, Coutts & Co

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management not based on family if they failed to demonstrate aptitude, and quiet discretion. Today, we are observing a growing interest in entrepreneurial businesses and the personalities that lead them. This has meant that, even more so than in the times of John Campbell and Thomas Coutts, the reputation of an organisation and its leaders has become unavoidably intertwined, with a proliferation of media ready to bring any impropriety to the doorstep of the public. As such, reputation and the protection of it is now not only the preserve of big corporates, but also of individuals. Our work with many of the UK’s top business leaders means that, at Coutts, we understand this perhaps more than most. Business leaders and entrepreneurs are increasingly creating and influencing the brands of the future. We have seen this especially in our work with entrepreneurs and the discussion opportunities afforded by the Coutts Forum for Entrepreneurs. That is why we are delighted to be associated with this important report that seeks to bring new insight into what has, for many, remained an intangible, but nevertheless crucial, area of business life. The author, Michael Hayman, Chief Executive of The Communication Group plc, examines how businesses and individuals are increasingly scrutinised in the modern world. He draws on real-life examples and case studies of leaders and organisations under the public spotlight. Joining him are former Deputy Prime Minister Lord Heseltine, former Daily Telegraph Editor Sir Max Hastings, BBC2 Dragons’ Den entrepreneur Doug Richard, legal expert Alasdair Pepper, ‘super chef’ Tom Aikens, entrepreneurs Emma Willis and Robin Saunders and Chairman of YouGov Peter Kellner. I hope you find the report thought-provoking. It delivers real insight into how understanding the potential opportunities and risks to reputation can equip entrepreneurs and leaders for the challenges of the 21st century business landscape.

he value of reputation has never been so important. This report examines the role of reputation as a key business driver and the emerging challenges associated with it. Reputation, simply put, is the impression that others have of you. It is, therefore, an intangible but highly prized asset, often equated with the goodwill of a business, and is seen as a key source of competitive advantage. Today, the emphasis placed on the various faces of reputation is a relatively recent development, and its wide-ranging spectrum in the fiercely regulated financial world of the 21st century would be unfamiliar to the founder and the partners of Coutts in the 17th and 18th centuries.Yet there is no doubt that reputation was of the highest importance to the early partners and to Thomas Coutts, even if their way of interpreting and maintaining it varies from today’s demands. For John Campbell and succeeding partners, including Thomas Coutts, in the world of banking, a man’s reputation was only as good as his credit. Confidence was inspired by prompt payment of debt and open and honest dealings. The ‘promissory note’, the early cheque, was exactly what it said: a promise to pay either on demand, at a fixed or deferred period of time. Campbell and his successors dealt in these notes and bills of exchange all the time.The ethos of ‘my word is my bond’ was vital. With the rise of the joint stock banks in the 19th century, private banks faced stiff competition and many failed. Coutts had such a well-established reputation that it could withstand the onslaught.There were a number of ‘panics’ in the 19th century, including the collapse of Overend & Gurney in 1866, a distinguished private bank.There was never a run on Coutts, nor any hint of anxiety concerning the business.The lessons learned by Coutts in earlier times paid off in maintaining its reputation: a sound balance, wise

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INTRODUCTION

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rom celebrity business leaders to entrepreneurs and super chefs, Britain’s business reputations have never had it so good. The role and leadership of Britain’s top business performers is fuelling a new era of interest. Thanks to prime-time television shows, such as Dragons’ Den and The Apprentice, we are witnessing a growing public fascination in businesses and the personalities that lead them. Is this just mere entertainment or does it reflect a more substantial transformation in the role of reputation and its net effect on business? This report argues the latter. The definition of value in business has changed. Once, accountants could define a company’s worth by totting up the value of real estate, inventorying stock and calculating the depreciation of plant and machinery. Not any more. As we move ever further into a knowledge economy, a company’s value is increasingly determined by its intangible assets – the strength of its customer relations, the quality of its software and the institutional knowledge of its employees. According to a study by the US Institute of Practitioners in Advertising, more than three-quarters of the market value of the typical Fortune 500 company is now accounted for by intangible assets. Yet if reputation has a value, so the loss of reputation has a cost. The UK famously has a schizophrenic attitude towards business and wealth creation, and there is no shortage of companies and business leaders who find that their image shifts from consumer champion to incompetent villain with dizzying speed. In the political rather than the business sphere, as an adviser within the Conservative

Government led by John Major, I witnessed at first hand the shattering consequences of damaged reputations stemming from the 1993 ‘Back to Basics’ campaign. A key handmaiden in this great drama was a tenacious media. Journalists, often with more than just cause, revelled in exposing scandal after scandal, damaging the reputation of the Government. My argument is that the public interest has more recently been confused with what is interesting to the public, and this has been used to justify unparalleled levels of subjective investigation, comment and news. Former Minister, Steve Norris, among others, used to use the phrase: “Why let the truth stand in the way of a good story?” At first, new levels of scrutiny found their way to the quoted community of publicly listed companies. After all, a business with shareholders has a public duty to be transparent and accountable. Increasingly, however, private businesses run by entrepreneurs have emerged onto the front line of reputational scrutiny. This new line of attack states that where stakeholders are involved, stories relating to any company and its leader meet a public interest test.

Me, myself and my brand
We live in an era of information overload. Take a leading global newspaper like the UK’s Sunday Times. It contains around 500,000 words per edition. To read it at an average reading speed of 300 words per minute would take some 28 hours. To stand out in this ever more congested market place, people have become a powerful way of bringing a company story to life. In many cases, the brand of a particular company, and that of its leader, has merged.

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FACE VALUE: YOUR REPUTATION AS BUSINESS ASSET

In today’s business environment, a company leader is often expected to be the personification of the company; he or she represents what the company is trying to do and the values by which it operates. The consequence is that the reputation of a company is now often inextricably linked to that of its leader. Yet, as with many merry-go-rounds, getting on is a lot easier than getting off. A high public profile may be a valuable asset when results are strong; but it becomes an equivalent liability in times of difficulty. Solid growth is no longer a story; it is only astronomic leaps that even get a look-in these days. Against this backdrop, the claims have become greater, the thinking ever more short term, the headlines more dramatic and the real results more questionable.

Trial by media?
The media has, for the most part, provided a superb platform for enhancing the reputation of business leaders, of large public companies and high-flying entrepreneurs alike. However, it is a complacent business leader who views the media as a lifelong friend. The academic C. Northcote Parkinson put it well when he said: “The void created by the failure to communicate is soon filled with poison, drivel and misrepresentation.” In recent years, the size of that void has grown exponentially. Twenty-four hour global media, new media, broadcast media, print media, specialist media, citizen media – these are just some of the critical scrutineers of public life today. The emergence of the internet has brought with it the phenomenon of news being

disseminated globally, instantly and cheaply. A world of websites, chatrooms and blogs turns anyone with an internet connection into an expert commentator; rumour can take on the appearance of fact with startling speed. In this environment, effectively telling your side of the story is both vital and increasingly hard to do. Situations can spiral out of control before an individual or organisation can make an informed judgement about what is going on. From a legal perspective, you never admit culpability until you are clear about the facts, and that takes time. But delay carries with it a reputational cost. The pressure of these two competing needs is enormous. In preparing this report, I interviewed a FTSE 100 chairman who brought this to life when talking about his own response to a significant crisis: “All those advisers around me just confused the situation. More than anything I wished I had listened to my gut instinct, and that was to hit the issue before the issue hit us.”

“They’ve all got a strategy until they get hit”
MIKE TYSON

Reputation as a management challenge
A Roman general once said that in times of peace, prepare for war, and I think that this message is highly relevant today. The key is

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to take control; get ready and build your reputation by design rather than allowing it to grow ramblingly by default. Indeed, many business leaders are often supported by highly sophisticated corporate communications departments who have the ability to view business reputation in the round. Reputations built over the long term and on firm foundations engender trust. Look at Richard Branson or Bill Clinton. Neither without their detractors, but both have weathered the reputational storm, for now. Business leaders should realise that their personality, record of achievements and way of doing business adds up to a brand. In the same way as Volvo is readily associated with safety, so in a similar way people have a perception about you. Taking charge of your brand, and managing it effectively, is a vital challenge.

the relationship between reputation and brands, the decline of public trust in companies and business leaders, and offers practical tips both on preventing reputational crisis and managing them effectively if they arise. For those who are aware of reputational risk, are concerned about the threat it poses, and are uncertain how it should be managed, I hope this report provides a valuable starting point.

My thanks are extended to the contributors and especially to Coutts & Co, whose wise counsel, insight and support were central to the development of this report.

Your weapons
Shortly before leaving office, Prime Minister Tony Blair described the media as a “feral beast”. The media may indeed be more than capable of handing out a mauling, but with rights come responsibilities, and the media cannot hide from these. The Reynolds Defence outlines specific obligations on the media to behave responsibly. Understand this check list and you have a formidable ally at your side. You also have the right to ensure that your side of events is accurately reported. Get your messages agreed and stick to them. Legend has it that Henry Kissinger regularly used to ask the assembled White House press corps: “Do you have any questions for my answers?” It is still overwhelmingly the case that the vast majority of business careers avoid a public mauling or editorial assassination attempt. But times are changing and with it so must the approach of Britain’s business leaders. This report offers insights and recommendations into how companies and business owners can manage their reputation more effectively, through both good times and bad. It looks at

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

THE VALUE OF REPUTATION
DEFINITION COLLINS ENGLISH DICTIONARY NOUN

1. 2. 3.

The opinion generally held of a person or thing

A high opinion generally held about a person or thing Notoriety or fame, especially for some specified characteristic

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n this new century, one of the most crucial business assets is reputation. It may be difficult to ascribe a hard figure to the value of a company’s reputation, but it is certainly not zero. Just look at Arthur Andersen, a century-old global accountancy practice and one of the five biggest professional service advisers of its kind in the world. It’s association with Enron, and the reputational damage that caused, saw Andersen collapse within months as clients fled. Business commentator Jeff Randall put it as follows: “In today’s commercial world, where physical assets form only a small part of corporate valuations, non-tangibles such as brands, alliances and relationships make up the difference – and these are often underpinned exclusively by reputation. It has been called, ‘the Cinderella asset’ – you never quite know what you’ve got until it’s gone, then the damage is unmissable.” Once lost, it is hard for a company or individual to win their reputation back. As Benjamin Franklin, the US founding father put it: “Glass, china and reputation are easily cracked, and never well mended.” Some of the leading business people of the modern age have spoken just as eloquently as Franklin. Warren Buffett, the legendary US investor, said: “It takes 20 years to build a reputation and five minutes to destroy it.” Small wonder that he once told his employees: “If you lose dollars for the company by bad decisions, I will be understanding. If you lose reputation for the firm, I will be ruthless.” Jack Welch, the feted boss of General Electric, was similarly adamant: “One thing I learned during my years as CEO is that perception matters. And in these times when public confidence and trust have been shaken, I’ve learned the hard way that perception matters more than ever,” he said. Finally, Bill Rhodes, Senior International Officer for US financial services giant, Citi, whose subtle diplomacy has been at the forefront of every

debt crisis of the past two decades, has reached a similar conclusion. He told an interviewer that he had learned three big things in 50 years of banking: “The importance of people; the client pays the bill; and risk, especially reputational risk, is crucial.” Businesses acknowledge the risk. A recent PricewaterhouseCoopers survey found that 50% of companies agree that loss of reputation is the biggest threat to their business. Meanwhile, a study by Aon Consulting of 2,000 private and public organisations ranked reputational risk as the most significant threat to businesses, greater than crime, natural hazards

“GLASS, CHINA AND REPUTATION ARE EASILY CRACKED”
and terrorism.Yet not all companies act on this knowledge. PricewaterhouseCoopers found that less than one quarter of companies had a formal strategy to manage reputational risk. And, according to a further study carried out by The Economist, it is the most difficult risk to manage. Perhaps the subject is too vast for many companies to embrace. Professor Michael Power of the London School of Economics argues that once companies start to assess and manage reputational risk, they find it hard to stop. He wrote: “Reputation has become a new source of anxiety where organisational identity and economic survival are at stake. And if everything may impact on organisational reputation, then reputational risk management demands the risk management of everything.” Managing reputation successfully is indeed daunting. Furthermore, it is becoming increasingly hard to do.

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

THE QUESTION OF TRUST
“The purest treasure mortal times afford is spotless reputation; that away, Men are but gilded loam of painted clay”
RICHARD III, ACT 1, SCENE 1

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rust is an essential part of doing business, yet forming that vital bond is increasingly hard for all companies.The public’s trust in authority as a whole is waning, requiring leaders in all spheres to work harder to secure their reputations. In 2003 and 2007, market research and polling group YouGov surveyed public attitudes on trust. The survey asked: “How much do you trust the following to tell the truth?” of professionals in 25 fields, ranging from family doctors to teachers, police officers, plumbers and electricians, as well as captains of industry and politicians. With the sole exception of judges,YouGov found every group to be less trusted in 2007 than it had been four years before. What explains the seemingly inexorable decline in public trust? There are two mutually reinforcing trends that have added to the challenge of managing reputation. The first trend is the development of a more open, transparent and accountable society, which means that those in authority operate under a microscope as never before.The ministers’ code, the Committee on Standards in Public Life, and the strengthened register of members’ interests have created a yardstick against which politicians’ behaviour can be measured. The incidence of political sleaze and self-dealing is probably no higher than it ever was, but individual cases are more likely to be exposed, the media coverage more extensive and hostile, and the sanctions more severe than in the past. In the words of the Nolan Committee, established by the Major administration in the context of the ‘cash for questions’ scandal: “We cannot say conclusively that standards of behaviour in public life have declined. We can say that conduct in public life is more rigorously scrutinised than it was in the past.” Business people as much as politicians have learned to operate under the new rules. It is only ten years ago that executives of listed companies

“THE PUBLIC’S TRUST IN AUTHORITY IS WANING”
were required to spell out their remuneration in detail for the first time, giving the media an easy opportunity to track levels of executive pay and match it to company performance. The second contributing factor to the growing climate of mistrust is a more aggressive media. The rise of the internet has spawned instant news and comment, making the news environment much more competitive. The media cannot rely on simply reporting the news any more, but must seek to break it. This hunger for scoops, assisted by new tools such as the Freedom of Information Act, has turned even mini scandals into front page news. What is clear is that this style of media is not going to disappear any time soon. The result is what could be termed the reputation paradox – as those in authority are subject to more extensive best practice standards and disclosure requirements than ever before, so the public believes them even less. Transparency goes up; trust goes down. Viewed against this background, it is clear that establishing a reputation for integrity and fair-dealing is harder than ever before. The public is cynical about what those in authority are telling them, requiring leaders in all spheres to devise inventive strategies for establishing and maintaining their reputation.

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PETER KELLNER

Growing public scepticism means it is increasingly difficult to manage reputation
companies deliver record profits – after its last set of results, Shell was reported as making a profit of £1.5m every hour – does the public view this as the result of brilliant management and business leadership, or further evidence of ‘rip-off’ Britain? I am not aware of any polling that answers this question, but I suspect the latter. The demands of the media contribute to the problem. Business is complex and not easily reported, so that stories tend to focus on individuals rather than institutions – think of how much better known Amstrad is as a result of the profile of its founder, Sir Alan Sugar.

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he public is in a mistrustful mood. Our polling found that every group in authority save one (namely, judges) were less trusted in 2007 than they had been four years previously. This finding is hardly surprising.Think of the ‘dodgy dossier’, the David Kelly affair and subsequent Hutton report,The Daily Mirror’s faked photos, and the recent revelation that TV phone-in competitions were rigged, and it is no surprise that the public’s faith in authority is waning. Part of the reason for this decline in trust is the more intense media scrutiny of those in positions of authority. Despite this heightened attention, however, public understanding of business has barely improved. When the City of London sponsored the Money Zone in the ill-starred Millennium Dome, they commissioned research into how well the public understood the worlds of business and finance. The results revealed startling ignorance. People understand companies as consumers – they know whether they enjoy a positive shopping experience at Marks & Spencer or suffer interminable delays at the hands of a budget airline. But they know little about the business behind the brand, and even less about companies with no consumer-facing operation. Britain’s love-hate relationship with success also plays a part. When the UK’s largest

A culture of mistrust

“COMPANIES TEND TO BE HEROES OR VILLAINS”
The media is also poor at reporting shades of grey – companies and their bosses tend either to be heroes or villains with few points in between. Today, the environment in which power is exercised, whether by politicians or business leaders, is harsher. Standards of behaviour may well have improved, but so too has scrutiny, and the punishment for transgression is undoubtedly more severe. This has made managing reputation both more important and more difficult than ever. Peter Kellner is President of YouGov, the AIM-listed market research and polling company.

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THE RT HON THE LORD HESELTINE

Carefully managing the press can be vital to building and maintaining reputation

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o understand the relationship between politicians and the public, it is necessary to understand the media that both connects and stands between the two. The media has diverse owners, including National Institutions (BBC) and private trusts (The Guardian) that are independent from proprietors, but most of the media is owned by public companies. The Financial Times provides a consistency of quality commensurate with the expectations of its audience. For the main, the big Fleet Street nationals are controlled by proprietors or editors with political agendas that too often tip their reporting towards something close to propaganda. The spectrum of reporting ranges from those who genuinely try to report responsibly in the pursuit of truth and balance, through to others who deliver flagrantly partisan bigotry. The choice of editor reflects the attitudes of the owner. For example, many of Fleet Street’s high-profile editors take the political stance of the proprietor and point their paper towards a target market that thinks much like the owner, with no plans to change much about its view of the world. The further from Fleet Street, the less the political direction and predictability. Journalists can be serious specialists with a deep commitment to the truth. At the other extreme are the footloose hacks, who are in it for the money, the thrill of the gutter and all you find there. But, for the large part, journalists tell it as they see it. They are independently minded, suspicious and questioning. But the media has its own demanding disciplines, such as circulation figures, readership profiles and advertiser demands. Once appointed, an editor can become anything from a ruthless dictator to a tolerant consultant. The former may be more effective if they serve audiences anxious for a clear, simple message and intolerant towards qualified argument. Politicians live a life interwoven within this mesh of the principled and the prejudiced. They

depend on the media to get their ideas across. They have to know where potential allies are to be found. They have to persuade proprietors and editors to back them. They have to judge the pay-off by giving scoops to assumed friends. It is easy for an MP to get himself referred to as “a prominent backbencher” by a judicious leak or criticism of a colleague. It is harder to gain serious editorial support. I have very clear views and some advice for politicians in dealing with the media. Always remember that they are not there to be on your side or a friend. The odd one may become either or both for a while, but for the majority you are no more than the raw material of their trade. Succeed and you will be suffocated with friendship. Fail or become embroiled in scandal and suddenly that ‘named reporter’ you trusted has become ‘our special correspondent’ hunting you down anonymously with the pack. But remember, as I do, that they represent a balance to what would otherwise be the unbridled abuse of power by governments. The Government machine of 1986 would have buried me without trace after I resigned. So would some of the proprietors. But they couldn’t because too many journalists and programme editors wouldn’t let them.The media as well as my ideas kept me afloat. Indeed the media built me up to the point that, despite four years on the backbenches, I was a serious candidate for the highest office. No one knows more than I do that, warts and all, a free and varied press is an essential feature of a free society. The Rt Hon the Lord Heseltine is a former Deputy Prime Minister and founder of Haymarket Publishing Group.

The media

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ME, MYSELF AND MY BRAND

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“The most important thing about how you present your business is how you present yourself”
RICHARD BRANSON
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oday, more than ever before, leaders have become the personification of the brands that they represent. They need to crystallise the best attributes and the best values – they are the emblems and the hallmarks of their businesses. It is not just celebrity business leaders whose reputation is pivotal to the business. For those that may be less well known, their reputation with their specific stakeholders is no less important in their own business environments. This reliance on powerful personalities is no accident. It is people that count and personalities are the best way to bring out the value of the brand and spark a company into life. People need to see themselves very much like a brand and the challenge of a brand is to positively position itself in the minds of the market.

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In just the same way as business brands exist, there is no doubt now of the existence of the personal brand, which is very strong among business leaders whose reputations are often at the heart of the overall success of the business. Sometimes the leader’s identity is a very overt symbol of the business’ success; it is the sign above the shop door where the name is quite literally the brand. In an era of information overload, businesses have increasingly looked to new ways of standing out from the crowd and often the best way to do this is to promote the personalities of leaders. It is almost as if people have become immune to information. To this end, ever more creative strategies are required to cope with the deficit in human attention.

Take the acres of broadsheet coverage spent every week profiling the personalities that lead Britain’s businesses. For some, this is yet further evidence of a national obsession with celebrity. For others, it is a sign of something more significant and substantial. In an age where intangible assets count, it is the people stories that often help sell. As one famous entrepreneur said: “I like to work with people I like.” Providing good products and doing good work alone only gets you so far in a story-focused market. It is simply not good enough because a lot of people do it. And part of the problem for competing marketers is that there is no shortage of good companies. To this end, the building of a positive profile is part of the everyday work of most business owners. Once the preserve of the press officer, communication is now more readily handled at board level. Indeed, for most business leaders, the role of communicator-in-chief goes with the territory.

“I LIKE TO WORK WITH PEOPLE I LIKE”

Personality matters
The personal brand is particularly relevant and prevalent for the entrepreneur, where so much of the success of a business depends on them. When entrepreneurs first set up a business, they have to sell themselves. Chris Mottershead agrees. After quitting his job as managing director of Airtours to found Travelzest, he found the biggest challenge was to persuade people he was serious. “I had enjoyed all the benefits of people around me, but when I set up Travelzest it was just me,” he recalls. “I had to persuade people that I was absolutely 100% committed to see it through.You have to sell yourself and your concept, and demonstrate to clients that you don’t intend to fail.” thinking about their Unique Selling Point (USP), but undoubtedly more effort needs to be devoted to Unique Story Telling (UST). This is a crucial reason about why they are successful and not just because they have the best product, distribution network or sales people, but because they effectively position their offering in the minds of prospects.

“UST not just USP”
Numerous business leaders spend countless hours

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A REPORT FROM COUTTS & CO

EMMA WILLIS

Running an eponymous business comes with a heightened sense of responsibility
original style with a common thread linking all the products and the image of the business. I feel confident that this is a strength as it cannot be imitated. I use all English manufacturing for my shirts and ties, and have built a strong relationship with my suppliers. Perhaps being so visible and accountable to them, as well as to my staff and customers, helps build trust in this important area of the business too. A possible disadvantage of putting my name to the company is that I am held directly responsible for any failures, as well as successes, but this accountability adds to the excitement of running my own business.

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“It’s Emma speaking,” I replied.

y first ambition was to be an artist and I studied at the Slade School of Fine Art. Towards the end of my first term, I answered the Main Hall telephone. “Could we speak to Emma?” said a voice.

Made to measure

“We’re delighted to inform you that you have won the Young Portrait Artist of the Year award.” I let myself believe for a glorious moment before having to ask: “Which Emma did you want?” “Emma Sergeant” was the reply. One day, I thought, I want the answer to be Emma Willis. Although I am loath to admit it to my children, I did dream, like my actress grandmother, of having my name up in lights. So there are my less than admirable motives. Putting my name to the company has made me directly responsible for the business and brand, and the relationship with the customer, and I enjoy this responsibility. I know that every cotton or silk that I buy, and the make of my product, is a reflection of my own taste and I can be judged by it. I only buy what I honestly love, for quality, colour or design, and I think having an eponymous business keeps me true to this, resulting in an individual and

“I DID DREAM OF HAVING MY NAME UP IN LIGHTS”
I have designed the shop to create a sense of an English drawing room with hand-made cabinets for fittings, an oak staircase, stone floors, music, flowers and paintings. And a drawing room needs a host. My presence in the shop is made more important by it being named after me, but I seem to be choosing my staff accordingly. Several times, customers for whom I have made shirts ten or 15 years ago, when I ran my business without a shop, have come in to joyfully greet my beautiful 24-year-old retail manager, Alexandra with: “Emma, you’re looking amazing!” and then, there was the American tourist asking in a slightly incredulous voice: “Is Emma Willis still alive?” Emma Willis is the founder of Emma Willis, a custom shirt making company.

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A REPORT FROM COUTTS & CO

TOM AIKENS
If you can’t stand the heat…

There’s nowhere to hide when you open a restaurant with your name above the door

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he name ‘Tom Aikens’ did not leap out at me as the one to choose for my restaurant, which I opened in 2003. I started with a list of about 100 names, but frankly, most of them were rubbish. A restaurant’s name matters hugely – it should tell you something about what the restaurant’s about, and what it is trying to do. At the same time, it must avoid being either banal or pretentious. The name does mark the place – if you get it wrong, the business does suffer. I also wanted the name to be an expression of me, my character, and my approach to cooking. Ultimately, my own name seemed simplest and best. There was a sound commercial rationale for this. At the time, I was a well-known chef with a fairly high media profile. The industry and food writers knew me and my background, so there was a brand already in place. Because of my name, people had a view of what kind of restaurant it was going to be, so calling the restaurant Tom Aikens saved time in terms of restaurant PR and profile raising. At the same time, there is considerable pressure attached to having your name above the door. People expect to see you, to know that you’re cooking – which is why I’m working in the kitchen at least five days a week. I opened the restaurant in 2003; it was a very scary feeling. When you name your business after yourself, ultimate responsibility falls to you and you alone. Everything eventually lands on your shoulders. If the business fails, you’ve got that round your neck. I opened Tom Aikens after three years out of the restaurant trade, having left Pied à Terre in 2000. For two months before opening, I was in an almost continuous state of worry. Could I do it again? Could I commit to the hours, run a kitchen, cope with the stress? I had quite serious concerns about taking it all on again.

Opening a restaurant is one of the hardest things you can do. People think how romantic and jolly it is to have a lot of friends over for dinner every night. The truth is, it’s relentlessly hard work. I believe that if I hadn’t called the restaurant after me, it may well have buckled. Speaking both as a chef and a business entrepreneur, the opening months of a restaurant – as you seek to attract favourable reviews, build a client base and establish your reputation – are particularly gruelling and nerve-racking.Without the brand awareness that my previous career had generated, I am not certain that we would have made it through that launch period. As it was, we won nearly 25 awards in our first year – no other restaurant has come close to matching that achievement. Establishing a reputation as a top-end restaurant is both vitally important and difficult to do. Customers paying a lot of money for the best cuisine expect a ‘no mistakes’ service. In any business, this is impossible. In a pressurised environment like a restaurant, it is harder still. Mistakes occur; it is how you manage them that matters. I once made the mistake of getting into a dispute with a customer, and it ended up all over the papers. Quiet professionalism would have been a better idea. Next time, I’ll leave the house manager to deal with it. Tom Aikens is one of the most successful young chefs in the UK and founder of Tom Aikens restaurant.

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

ALL BUSINESS IS PERSONAL:
The role of the business leader

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n the field of corporate reputation, the individual and the business are not easily separated. Shelly Lazarus, the CEO of Ogilvy and Mather, put it thus: “Everything a CEO says and does is no longer personal. It is attributed to the company.” An Economist Intelligence Unit survey asked companies who within the organisation had “major responsibility” for managing reputational risk – 84% responded “The CEO”. Increasingly, it is not just business celebrities like Sir Alan Sugar or Sir Richard Branson who personify their business, but every chief executive. When the company succeeds, it is they who take the credit. Conversely, when they fail, the company suffers. Carly Fiorina, Chief Executive of Hewlett-Packard from 1999-2005, was one of America’s most visible business leaders, frequently photographed alongside Hollywood celebrities and politicians. The press speculated that, following her business career, she would run for office. Her visibility and fame became a hindrance following the controversial acquisition of Compaq in 2002. The merger did not go smoothly, results were inconsistent and Fiorina inevitably copped the blame. In 2005, she was dismissed by the board, prompting a 7% jump in the share price. Fiorina later said: “The worst thing I could have imagined happened. I lost my job in the most public way possible, and the press had a field day with it all over the world.” The concept of a business celebrity is not new. Sir John Harvey-Jones, the former Chief

“EVERY CEO PERSONIFIES THEIR BUSINESS”
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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

Executive of ICI, was the first of the modern business TV stars with the series Troubleshooter in the late 1980s, but the phenomenon has multiplied greatly since then. Even the comedy schedules are not immune from our obsession with the way business works – not when the biggest TV hit of recent times was called The Office. As business has become ever ‘sexier’ in the new century, so managers of all kinds have become, to use Fleet Street’s favourite and extremely accurate metaphor, ‘fair game’. Dispatches and Panorama are as likely to investigate companies as they are governments; business leaders as they are arms dealers. As for newspapers, the days when a departing chief executive, a boardroom row or a price rise would be confined to the business pages are long over. Bonuses, golden handshakes, share options, perks, private equity deals, commodity prices – no matter how technical the detail, the daily dealings of multinational corporations can be pushed and spun into front page news. One leader put it that in the 19th century people of ability went into the military; in the 20th century they went into politics; and in the 21st century they go into business. Business leaders are often interesting, powerful and relevant.

“ORDINARY MORTALS NEED NOT APPLY”
The role of communication managers is to build a positive reputation stock for chief executives with a wary eye on that dreadful moment when something serious goes wrong. For, in many respects, the modern business leader faces the same kind of superhuman task that has long confronted politicians. You are not permitted to display normal human fallibilities. That applies to your private life, your salary, your ethical conduct, your knowledge of the balance sheet and your firm’s accounting policies. You are meant to be a leader and a delegator, avoid being an egomaniac empire builder, and yet know everything that goes on at all levels of your company. No wonder it is said that “ordinary mortals need not apply.” Business leaders need to tread carefully to ensure the balance between getting their story on the record and not over hyping their own success.

Re-building reputation
The wise words of Benjamin Franklin notwithstanding, personal and corporate reputation can be re-built. Failure at some point does not need to mean the end; in fact, it is often the beginning. From Steve Jobs’ much publicised reincarnation as Apple’s leader to Sir Rocco Forte’s leadership of RF Hotels, the lesson is that reputation is a long-term game. The son of a great entrepreneur, Rocco Forte seemed doomed to live in his father’s shadow. That weak point was exploited mercilessly by Granada’s Gerry Robinson during his successful bid for the Forte Group in the mid 1990s. Robinson loved to point out that Forte had been out grouse shooting on the day he launched his initial bid, and the image of the spoiled and patrician elder son stuck. At 51, Forte had a huge fortune but no job. Rather than live a life of privileged obscurity, he launched back into the hospitality business, creating RF Hotels, a distinctive, growing and highly profitable collection of European city properties. Granada, meanwhile, had a torrid time managing the Forte assets, and disposed of them all within seven years for a poor return. Re-building reputation is a difficult and time-consuming job. The most important lesson is to manage reputation right first time, so there is no need for a rescue operation.

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“EVERYTHING A CEO SAYS AND DOES IS NO LONGER PERSONAL. IT IS ATTRIBUTED TO THE COMPANY”
SHELLY LAZARUS, CEO, OGILVY AND MATHER

A REPORT FROM COUTTS & CO

ROBIN SAUNDERS

Avoid letting others boost your profile for their own benefit. Control is everything

s a private equity investor and financier, I aim to back managers who are the best in their business. Sometimes that means taking on big personalities with a high public profile – which sometimes scares off other investors. For me, performance matters far more than a controversial profile. It may be easier to work with a low-profile company led by low-profile managers, but I’m not put off by column inches. In my career, I have been fortunate to back the likes of Philip Green, Bernie Ecclestone, Robert Tchenguiz and others, all of whom were seen as controversial mavericks at the time of their respective pivotal transactions. More importantly, from my perspective, each had, and continues to have, unique talent in their fields of expertise. Ultimately, entrepreneurial and managerial excellence and business ‘nous’ trumps all other considerations. However, I have a cautionary tale – and personal experience of how quickly a high public profile can become a liability. In 1999, while at WestLB, my team led a bond issue for Formula One, the international motor racing championship, and Bernie Ecclestone and I gave a press interview about the deal. My personal profile rapidly became uncomfortably high. The following year while at WestLB, I was given the brief to build its principal finance operation. In retrospect, my ever-growing public profile was used on behalf of the bank as a whole, for its portfolio companies and bank borrowers seeking to raise their own profiles. I did not court the press, but I did allow borrowers to include me in deal profiles, believing it to be harmless. I remember one Sunday when my picture appeared on the front cover of almost every broadsheet business supplement detailing the allocation of capital by the bank to our Principal Finance team. In reality, the details had been in the public domain for months without being reported. The facts had not changed, only the media’s knowledge of them.

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Another example was when we helped to finance the re-building of Wembley stadium, a transaction that garnered a lot of press attention to me even though there was a large team involved. I actually gave very few interview comments as I didn’t see how it was helpful for the transaction. Still, a few uncomfortable moments aside, I didn’t see where this was heading until 2003, when a WestLB loan turned sour. Suddenly my high profile became a millstone for me and the bank, magnifying the interest in the negative story line as it gathered speed and momentum. This quickly became uncontrollable. Forget trying to manage my reputation; I lost the ability even to correct basic facts. A media presence can be valuable and when coverage is focused on the company and its marketing messages, profile is invaluable. As soon as it becomes too personalised, however, it can become uncontrollable. In hindsight, I was naïve to take a laissez faire approach to a snowballing public profile. At the peak of frenzy, I received several letters from FTSE CEOs (some of whom I knew, some I didn’t) encouraging me to “shake it off”. I felt as if I had joined a club of those who had experienced the full press cycle. Today, four years after leaving WestLB, I have a successful private equity company.We adopt a low public profile, for obvious reasons. Despite my desire for a life out of the public eye, I agreed to do this article to share the risks of running the gauntlet of a public profile gone out of control. As silver linings go, it’s a modest one. Robin Saunders is the Chief Executive of Clearbrook Capital.

The perils of ‘personality’

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A REPORT FROM COUTTS & CO

DOUG RICHARD

The risks of living life in the public eye are matched by the opportunities and rewards

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ust as it is a fallacy to think that the CEO must be a celebrity, it is equally untrue that he or she can remain anonymous. The humble, silent CEO who sticks to operations and leaves the public to itself has neglected his responsibilities just as much as the CEO whose sole use of the position is as a platform for his popularity. As we clear the first decade of a new century, certain things are becoming clear: the corporation can no longer be anonymous, and it is the CEO who must both be emblematic of the company and the company’s voice. The internet has touched all elements of business and personal life. The rise of the blog and its impact in legitimising opinion and commentary has forced CEOs to move out from behind their corporate PR shelters and address their constituencies directly. For the public company CEO, this has forced hard decisions, because the increasing exposure has been accompanied by increasing scrutiny and regulation by Wall Street. What you tell one you tell all; so many CEOs have resorted to tell no one anything. Nevertheless, companies are becoming personified through the personality and character of their leaders, and the result is that the leader’s reputation is quickly becoming only as respected as the company he represents. Even more so, whatever any employee does puts the CEO at risk. So the potential for disaster is multiplied by the sum of employees facing the public. But the solution, given that these are exogenous to the CEO, is not to retreat. That silence becomes deafening and leaves the CEO’s fortune to chance. If the risk has increased then the reward must increase to put that risk in context. Companies must accept that the CEO has an affirmative obligation to present themselves in the public eye, to take views on the issues that touch all stakeholders of the business and which can be supported by the employees; they must shape a

Reputation and the leader

“SILENCE LEAVES FORTUNE TO CHANCE”
character for the business that can be reflected in their own persona, and they must get into the public eye and stay in the public eye. It is not a matter of celebrity; it is a matter of brand. The company’s brand depends on the reputation of the business, which is characterised by the CEO being seen to be involved in the world espousing the company’s values. Anything less is leaving opportunity on the table, reducing the rewards of success and making a fixed risk unacceptable. Doug Richard is a successful entrepreneur with 20 years’ experience, and has appeared as a panellist on BBC TV’s Dragons’ Den.

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

HOW NOT TO DO IT:
Anatomy of a reputational meltdown

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harton, one of America’s leading business schools, offers a concentrated programme in reputation management. Course leaders identify five stages that lead to collapse in a company’s reputation: 1. There is an initial mistake, often minor, that goes uncorrected. 2. A subsequent problem compounds the initial error. 3. Attempts to correct the problem are often half-hearted, either because there is no recognition of the increasing seriousness of the situation, or because executives are in denial. 4. When the problem eventually becomes too big to ignore, attempts are made to hide the truth. 5. Finally, there is the awful moment of acceptance that the situation is completely out of control. The five stages are marked by a rising graph of media interest. The narrative is much the same: this scandal has happened, now let’s find the guilty person and make them answer for their actions (or inactions, if need be). One recent example concerns the outbreak of avian flu on a Bernard Matthews farm. Matthews, the avuncular turkey tycoon, failed to address mounting public concern about the problem, allowing the story to become defined by damaging, piecemeal reports of the firm importing turkeys from a part of Hungary close to a bird flu-affected area. Two months after the outbreak, a government report announced there was insufficient evidence to bring a food safety prosecution against the Bernard Matthews operation. By then, the firm was reporting a 40% drop in sales and the folksy memory of the Norfolk farmer

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“NO COMMENT IS NO LONGER REALISTIC”
and his ‘bootiful’ produce was replaced with images of intensive farming and government scientists in protective suits. The Daily Telegraph reported: “Retail analysts say the company’s reputation has plunged. One of the biggest ongoing surveys of consumer confidence yesterday revealed that Bernard Matthews was now the least respected and trusted brand in Britain.” Matthews’ immediate response was “no comment” and it nearly cost him the business. “No comment” is no longer realistic, especially when, as in this case, the individual and the company are so closely associated. The lawyers may well demand a cautious response. They will rightly advise not to admit culpability unless it is absolutely necessary. Reputation managers, meanwhile, may paint an alternative scenario in which litigation costs are negligible compared to the loss in reputation.

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NET EFFECT:
Embrace Web 2.0 or brace for impact
ccording to William Arruda, personal branding expert: “If you don’t show up in a Google search of your name, you don’t exist.” Enter the era of digital advocacy. The new technology landscape is top of mind for many business leaders because of its effect on the way people give and form opinions. It is important because so much of reputation rests on opinions. A recent report titled The Cluetrain Manifesto states that: “Markets are conversations, consisting of human beings, not demographic sectors. Conversations among human beings sound human.They are conducted using the human voice.The internet is enabling conversations among human beings that were simply not possible prior to the era of mass media.”

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In essence, the frequently used term Web 2.0 refers to a perceived second generation of social-networking sites along with other technologies such as wikis, blogs, file-sharing and peer-production, to name a few. It is about an architecture of participation that encourages users to add value to the application as they use it. As far as reputation management is concerned, the internet fuels the reputational steam engine. If leaders don’t enter into the inevitable conversation, they will be subject to it rather than part of it. Alan Jenkins, internet communications specialist, noted: “Your brand is no stronger than your reputation and will increasingly depend on what comes up when you are Googled.” Leaders in the political arena, and of the world’s most successful companies, have moved onto the front foot by harnessing the power of the open conversation brought about by the growth of this era of collaboration and participation – that is globally visible at the click of a button.

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A REPORT FROM COUTTS & CO

Bob Lutz, CEO of General Motors, uses a blog to engage with his huge, geographically dispersed workforce, and Leader of the Conservative Party David Cameron launched Web Cameron as a tool in the armoury to show his leadership credentials. For some business leaders, the internet has provided a chance to effectively re-build reputation. The notorious Gerald Ratner, who fell from grace in the 1980s after offending his loyal customers by referring to Ratner products as “total crap”, has emerged some 16 years later with a highly successful online jewellery business. But success is not the exclusive preserve of all-star business and political leaders. In many respects, the internet levels the playing field. Value from investment in clever and compelling communication technologies can deliver real success for less prominent business leaders that are prepared to engage in dialogue instantaneously with audiences throughout the world. Further, the internet used to be the home of the tech-savvy company – in the new communication landscape the ‘bricks and mortar’ company has everything to play for in the battle to win mindshare. The internet has also emerged as a growing source of stories for more traditional forms of media. Indeed, there is a daily competition between many newspapers and their online versions to break stories first, and this reflects the growing importance of new media as a source for news. In addition to the media, the internet age has brought with it an army of citizen journalists, armed with blogs and mobile phone cameras, who can make information globally accessible within minutes. As one online journalist put it: “You can’t go anywhere or do anything and expect not to be seen, because everyone is a reporter now.” Enter a new phenomenon, citizen journalism; the most prolific medium used in this context is blogging. There are currently more than 60 million blogs, a new blog site is created every second of the day, and 50,000 pieces of citizen journalism are published every hour, day and night. The sheer volume of material makes the

internet a crucial medium in the protection of reputation. Perception is reality, and for leaders the imperative is to communicate effectively. Jay Heiser, Vice-President at Gartner, makes the point: “Reputational persistence is a unique internet phenomenon that traditional reputation specialists have never had to deal with.The fact is that, where the internet is concerned, the only way to counteract persistent negative information is to overcome it with a greater weight of positive information.This means getting to grips with internet reputation management.” There is, of course, a darker side to the internet. Things can go wrong very quickly for businesses that make mistakes. The conventional wisdom that “a dissatisfied customer tells ten people about a bad experience” is outdated. Today, they tell millions. Social media is unforgiving in this way. Similarly, there is a proliferation of negative websites aimed at individuals. Not surprisingly, these are often directed at the rich and famous. One senior lawyer told me that “the UK is emerging as an international hub because of the strengths of our laws protecting rights to privacy. Indeed, we have found that some fairly ancient laws have provided important 21st century solutions for our clients.” Increasingly, the law has sought to police the internet to ensure responsible practices. Often thought as communication’s answer to the Wild West, there are now many examples of the law being used to ensure rights to privacy and accuracy of information. Unlike the United States, where the internet service providers have no liability for content and are defined as equipment suppliers like the telephone companies, in the UK they are considered publishers and liable for libel and other actions over content. In the final analysis, the internet seems to be the home of opinion rather than news. It is an opportunity for individuals to state their point of view, and many business leaders use it as a channel to get their case to market. As technology matures, there is no doubt that the internet will play an even greater role in the promotion of profile.

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

KNOW YOUR STORY:
Stay on solid ground

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A REPORT FROM COUTTS & CO

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or many business leaders, seeing themselves as a brand asset is the language of waffle usually confined to the marketing department, yet it is a core survival aid in the ‘business jungle’. In today’s environment, leaders are brands; they are what they say. So think very carefully about what it is you are putting on record. The phrase ‘perception is reality’ has developed for a reason. It hinges on the fact that if people believe something to be true for them it may as well be true. A change in perception does not greatly alter facts, but can alter their meaning. What a difference it makes to life when you see the glass as half empty or half full.Yet it is no accident that a partially drunk glass of water can deliver the same facts, but radically different positive and negative moods and meanings to the drinker. This is the power of perception.

“LEADERS ARE BRANDS; THEY ARE WHAT THEY SAY”

The value of honesty
In 2003, Kate Swann was headhunted from Argos to take over the ailing high-street retailer, WHSmith. Many in the retail analyst, investor and media community expressed pity, seeing WHSmith as a poisoned chalice that could only damage Swann’s reputation. The carping appeared justified the following year when Smith’s reported a 39% drop in profits. As one columnist wrote after the results announcement: “Swann had two choices last week when it came to presenting the disastrous slump in first-half profits: say as little as possible and get out of the room, or open the closet doors wide. “To someone who has never had to publicly deliver any kind of company news, let alone such dire stuff to such a hungry audience, the first option might have been tempting.” Instead, Swann disarmed the critics with her refreshing honesty, describing a visit to her local store to buy a replacement printer cartridge. “By the time I went around five departments because it was no one’s responsibility, it was easy to lose the will to live,” she said. The line won her laughs – it also won her time to fix the company.

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SECRETS OF SUCCESS:
Getting the most out of an interview

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A REPORT FROM COUTTS & CO

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• • • •

hat you say, or don’t say, in an interview, and how you say it will shape the media’s and the public’s perception of you, and, therefore, your business. So make sure you make the most of this opportunity to enhance the reputation of yourself and your company by thorough preparation.

Know what you want to say
Know what you want to get out of the interview Know who you’re talking to – interviewer and audience Don’t expect to tell the whole story Define the most important points… and know how you’re going to say it

Support your key messages
• • • • • • • • • • • • • •
Bring to life with facts, figures, examples Use word pictures – human interest examples Have proof points to hand Remember who you are – company and brand Address the negatives – don’t ignore them Rehearse

Preparation, preparation
If a journalist approaches you unexpectedly, do not launch into an interview Give yourself time to prepare Never try to read from notes – you won’t sound spontaneous In a studio interview, establish eye contact with your interviewer Don’t speak until you’re told to in a broadcast interview Make sure you reach your key messages – don’t go off the track Prepare examples to illustrate your points Never go ‘off the record’

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A REPORT FROM COUTTS & CO

SIR MAX HASTINGS

An obsession with the cult of personality means that image management is crucial
the decisive theatres of debate in public affairs. A chief executive or secretary of state can survive an individual drubbing; it is infinitely harder to overcome sustained media hostility. The process is self-renewing and what is more disturbing is the degree to which the core reporting function of radio, TV and press has been displaced by comment. In many controversies, a public which is told little about the issues at stake is overwhelmed by the opinions of the commentariat. It becomes increasingly hard to present complex arguments. Once a negative perception is established, it is more difficult still to reverse this.

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odern media coverage is focused on personalities who become classified as heroes or villains, and may find themselves exchanging status at bewildering speed. While success is often extravagantly applauded, failure demands blame and the identification of guilty parties.The old belief, that some human misfortunes must be considered mere acts of God, is out of the window. It would be wrong to place sole responsibility for this state of affairs on media practitioners. It is attributable partly to technology, to education or the lack of it, and to changing lifestyles. Competition for public attention grows ever more intense. There are relatively small specialist publics for heavyweight briefings on serious issues. The mass print and broadcast audience, however, shows a diminishing appetite for big reads or long programmes. The past 30 years have witnessed a notable shift of power in most Western societies, away from government and towards commerce and the media. Global market forces now exercise an influence which few politicians can match, while broadcast and print outlets have supplanted Parliament as

Trial by media

“REPORTING HAS BEEN REPLACED BY COMMENT”
Accessibility, a word which has become laden with malign significance, is deemed to be the highest good. We are creating a society in which people possess myriad fragments of information about all manner of subjects, but seldom achieve mastery of any. No single organ today possesses anything like the power of say, the BBC’s Panorama programme or the Daily Express of half a century ago. But the collective feeding frenzies of the media possess a momentum, and often a bias, against understanding, which dismays even many of those engaged in the industry. Wisdom and justice are ever more elusive, while image management has become indispensable both to government and corporate policy-making. Sir Max Hastings is an acclaimed journalist, editor, historian and author.

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KNOW YOUR RIGHTS:
Forearmed is forewarned

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1. Gravity If the allegation is serious and untrue, the public is more gravely misinformed 2. Of public interest The extent to which material is a matter of public interest and concern. Not the same as ‘interesting’ 3. Sources Is the source of the information independent, paid for or from someone with an axe to grind? 4. Verification What steps have been

any business people don’t understand the extent of their rights to receive a fair hearing and to get their points on the record. Indeed, organisations and individuals have a right to scrutinise and respond to media stories that may damage their reputations. The Reynolds Defence is a 10-point test to define responsible journalism.The result is that journalists, if they later wish to rely on a defence of having responsibly reported a story, have to consult the Reynolds check list before publishing allegations that may damage reputations. In October 2007, in a case at the Court of Appeal, the Reynolds Defence was upheld – judges decided that a book about police corruption had been libellous, but that the investigation and reporting had been handled responsibly. Querying whether a journalist is acting responsibly in preparing their article and referring to the 10-point test can assist you greatly when discussing the piece with them. Leading law firm, Schillings, summarise the Reynolds Defence as follows:

“THEY MUST PUBLISH YOUR SIDE OF THE STORY”

The Reynolds Defence 10-point check list
taken to check the truth and reliability of the source and the story? 5. Status Is it a bare allegation or an authoritative finding? 6. Urgency Never means their print deadline or desire for a scoop 7. Comment The journalist must try to report the subject’s view 8. Gist They must publish your version/side of the story 9. Tone A newspaper can raise queries or call for an investigation. Is the article sensational or is it neutrally reported? 10. Circumstance The circumstances of the publication, including the timing Use the Reynolds Defence effectively by: • Getting to know the 10-point checklist • Ensuring a journalist writing the piece can meet each point on the list

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A REPORT FROM COUTTS & CO

ALASDAIR PEPPER

Putting pressure on the media to follow best practice can prove highly effective

ithin the past two years, we have seen a significant rise in instructions from company chief executives and chairmen. The volume of business news has expanded dramatically in recent years, causing the personal profile of company leaders to be raised to a far higher level. This has an inevitable impact on the companies they run; many journalists and editors draw little distinction between the public and private lives of individuals occupying powerful and well-rewarded positions. When the lines are blurred unfairly or inaccurately, firms like Carter-Ruck become involved. I would stress that our participation is rare – in most cases, even hostile press enquiries can be effectively handled by a public relations firm. It is only when relations between a news organisation and an individual or business have broken down, and it becomes clear that libellous allegations are likely to be made, that we interpose ourselves. There are several ways we can help. At the extreme end, we can advise clients who wish to sue for libel, although the risks of this route are well known. We can also seek an injunction, preventing a media outlet reporting it’s story, although again it is rare that this is the preferred route. The risks of failure are high, and it attracts more heat to the story if the application fails. Injunctions are also seldom granted where straightforward issues of libel are concerned. They are more likely to succeed on privacy grounds, especially where intrusive photography or children are involved. As lawyers, however, we can achieve a great deal on behalf of our clients’ reputations without recourse to the nuclear options of an injunction or libel suit. By talking to the legal team of the media outlet concerned, we can provide some muscle in terms of reminding the news organisation of its responsibilities.

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Using the law to protect your reputation

The aim is often to put pressure on the journalist to follow best practice, as set out in the UK’s top court in 1999 by Lord Nicholls in Reynolds v The Times. Lord Nicholls set out a 10-point guide to responsible journalism, which stressed the importance of proper sourcing and that the subject of any criticism has the right of response. The Ofcom code for broadcasters covers similar ground. Following contact from a firm such as ours, we expect that the media outlet’s legal team will ensure that the relevant journalist and editor are paying close attention to Lord Nicholls’ 10 points. After all, if a news organisation can demonstrate that best practice has been scrupulously followed, it has another leg to its defence, in addition to those of truth and fair comment on a story of public interest. Often, in a world of 24-hour media, a story may be based on facts reported elsewhere. Simply copying the story may result in allegations to be spread at great speed, even though the original claims were not well founded. By putting pressure on a newspaper or broadcaster to ensure that sources and facts are rigorously checked, we can minimise the extent of publication of the claims. In our experience, an insistence on accurate reporting, responsible sourcing, clear evidence for claims made and the right to respond to specific allegations is frequently sufficient to ensure that a story is spiked or the claims significantly toned down. Alasdair Pepper is a Partner at Carter-Ruck, the media and human rights lawyers.

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

MANAGING YOUR REPUTATION
“It has been wisely said that the world is not interested in the storms you encountered, but in whether you brought the ship in safely”
HARVARD BUSINESS REVIEW

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A REPORT FROM COUTTS & CO

I

have advised clients with both personal and company difficulties, and over that period have observed some common themes that can be particularly helpful during stressful periods. They’re not exactly the Ten Commandments, but they nevertheless are very good advice:

Tell the truth
No matter how tough it gets. Know and understand your rights, but always tell the truth. Getting caught out makes the problem far worse.

Fail to prepare, prepare to fail
In a world where scrutiny is an everyday fact, then prepare yourself and prepare your messages. Think of yourself as a brand with clear themes to communicate. “Prevention is better than cure.”

“GETTING CAUGHT OUT MAKES THE PROBLEM WORSE”
Keep the pitch short
Choose your ground carefully and selectively. You are in the best place to decide just what allegations need to be met head on. “Don’t become rent-a-quote.”

Take control (quickly)
From the moment a crisis emerges, perceptions are being formed. Ask yourself the right questions and then act on the answers. “Hit the issue before the issue hits you.”

Time spent on reconnaissance is rarely wasted
Understand the media. An interview is not just an interview. If, for example, you are broadcasting, insist on live-to-camera interviews and never take part in a pre-recorded package, which allows a journalist to cut an interview and introduce subjectivity.

Address the negatives
You need to make your case effectively and that means being seen to address the issues at hand. “No comment is no longer an option.”

Stick to your messages
If you have prepared, you’ve got a script, so stick with it. Form a verbal bridge to the answers you want to make. “Do you have any questions for my answers?”

Never go ‘off the record’
Ultimately there is no such thing, only say what you are prepared to stand up to.

Knowledge is power
You know your brief, your life and your career better than anyone around you and that is a source of strength. “You are an expert witness.”

Show concern
You have a case to make and you need to ensure that you deliver it in the right way. Remember the CAP rule. Start with concern, and then move to the action points you intend to make, then you have the right to ask for perspective.

Keep perspective
Remember, tomorrow is another day.

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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

CONCLUSION
Reputation: the undiscovered country
“You can’t build a reputation on what you’re going to do”
HENRY FORD

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A REPORT FROM COUTTS & CO

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he great business leaders and entrepreneurs of the past were known for their innovation, vision, drive and tenacity. These qualities still hold true, but a talent for communication should now be added to the list. Communicator-in-Chief is not a job description Isambard Kingdom Brunel would have recognised for his building of bridges, or indeed any other who thought that their work spoke for itself. Yet, if he were starting in business today he would think differently. Businesses in every sector look for ways to differentiate themselves, and telling a compelling story remains a sure-fire way to achieve that. In 2003, for example, the pharmaceutical sector, for the first time ever, spent more on marketing than it did on research and development. Go to a petrochemicals convention and you would be mistaken for believing you had arrived at a consumer lifestyle event. It might be tempting to dismiss some of the substance of this report as the preserve of celebrity business leaders and the mega brands that are highly visible in our daily lives. This would be a mistake, for it would underestimate the trends and forces that are shaping the business world of tomorrow. In a world where information, goods and services are in plentiful supply, every company has to work harder to stand out. Humans have only a finite amount of attention, so any time

spent by a consumer or client considering your competitor’s product or service line is time denied to your own company’s offer. Big or small, failing to stand out in a competitive marketplace is fast becoming commercial suicide. Considered and effective communication that strengthens the reputation of your company and its leaders has become an essential part of good management. It brings the role of personality and reputation to the fore, facts that should be written into many more of tomorrow’s business leaders’ job specifications. In December 2007, The Sunday Telegraph reported that one in five FTSE 100 CEOs had left their jobs during the year, the highest number for some five years. This included a growing number of high-profile casualties of a volatile business world. Today’s business world faces an unparalleled degree of scrutiny, and the media will always seek to tell stories in terms of people rather than institutions or companies. This treatment is an inevitable part of doing business today. Entrepreneurs and business leaders should recognise that their own reputation carries a ‘face value’ and that it is a crucial part of the reputational armoury of their company. It is one of the most exciting, fragile and important assets that a business can have.

“THE REPUTATION OF A THOUSAND YEARS MAY BE DETERMINED BY THE CONDUCT OF ONE HOUR”
JAPANESE PROVERB
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FACE VALUE: YOUR REPUTATION AS A BUSINESS ASSET

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USEFUL CONTACTS

Coutts & Co 020 7753 1000 www.coutts.com www.coutts.com/entrepreneurs www.couttswoman.com The Communication Group plc 020 7630 1411 www.thecommunicationgroup.co.uk Haymarket Publishing Group 020 8267 4210 www.haymarket.com YouGov plc 020 7012 6000 www.yougov.com Tom Aikens Restaurant 020 7584 2003 www.tomaikens.co.uk Emma Willis 020 7930 9980 www.emmawillis.com Clearbrook Capital Partners LLP 020 7907 9650 www.clearbrook.com The Library House Ltd 01223 500 550 www.libraryhouse.net Carter-Ruck 020 7353 5005 www.carter-ruck.com Schillings 020 7034 9000 www.schillings.co.uk Photography by Andres Reynaga 07932 731491 www.reynaga.co.uk Coutts & Co is authorised and regulated by the Financial Services Authority. Coutts & Co. Registered in England. No. 36695. Registered Office 440 Strand, London WC2R 0QS. Calls may be recorded.

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About The Communication Group plc
Established in 1986, The Communication Group plc is a leading independent public relations communications consultancy. We bring together specialists across all the main disciplines, ensuring an integrated and seamless approach to every client’s business. From global to local campaigns for multinationals or high-value start-ups; from reputation and crisis management to product launches; from financial communication to public affairs, we provide the excellence that our clients need to stand out. Our unique strength lies in our commitment to add value through integrated communication expertise, crafting matchless public relations programmes that are powerful, strategic, creative and tangible. With The Communication Group plc there are no compromises; we get under the skin of your business, provide high level senior counsel, strategic advice and creative implementation, as well as access to a global network and an integrated approach to communication. We understand the power of effective communication. We do it every day.

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