Toyota’s recent $1.1 billion settlement of a class-action lawsuit regarding faulty acceleration issues with millions of its vehicles might seem like a major concession, but it will likely help the automaker put a tumultuous period in the past, shore up its reputation, and focus on a brighter future. (more…)
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Hershey’s has a crisis. It erupted Thursday. Since then over 600 articles about it have appeared online, including this New York Times editorial. It is a legal quagmire that no one appears to want to take responsibility for.
Background: A group of international college students came to the U.S. this summer for a cultural/work experience. The State Department arranged it. They paid up to $6000 for the opportunity to work and travel here during their summer off from engineering, medical and other foreign universities.
Coming at a time when the U.S. faces an economic crisis of its own, the summer job many got was sweat shifts at a Hershey vendor’s plant for wages of $7.25 to $8.35 an hour. Disturbed by the labor conditions and encouraged by local labor leaders, they staged a public protest now heard around the world.
Six hundred articles and one New York Times editorial later, Hershey’s has said little except that the responsibility lies with their vendor.
Hershey’s has deep reservoirs of reputation capital: goodwill and brand loyalty from millions of multi-generational Americans. Historically, long-established companies with excellent reputations have been able to withstand such crises. Toyota did, after a 2009 recall created a massive reputation crisis for the company. (This Harvard Business Review study explains how.)
Hershey’s needs to demonstrate leadership — and concern for the students’ complaints. The longer it waits to address the crisis, the worse it will get. Whether or not Hershey’s was directly responsible doesn’t excuse the company from stepping forward and taking steps to rectify a situation that never should have happened in the first place.
Last week I attended the Reputation Institute‘s 15th annual conference on corporate reputation, brand, identity and competitiveness.
This is the century of reputation.
“Trust capital” can’t be bought. It can only be built.
Goodwill can’t be duplicated or replaced.
If you can’t measure reputation, you can’t manage it.
In the absence of information you provide (about yourself, your company or your product), someone else will.
“Navigating the Reputation Economy” attracted a few hundred participants from around the globe. Forbes was the media partner. Allstate, BBVA Compass, Pfizer and Vestas sponsored. Highlights: Dan Hesse, CEO, Sprint. His candid comments about how he maintains an authentic voice in internal and external communications were inspiring. Mike Perlis, CEO of Forbes Media, on motivating all stakeholders.
Ginger Hardage, who heads Southwest Airlines’ Culture & Communications division. Christa Carone, Chief Marketing Officer of Xerox, who joined Honeywell’s Tom Buckmaster (VP of Corporate Communications) and Eastman Kodak’s Gerard Meuchner (Director, Communications & Public Affairs), in how they overcame reputation and other issues to successfully turn around those companies. Pfizer’s Sally Susman, Executive Vice President, Policy, External Affairs and Communications and Blair Christie, Chief Marketing & Communications Officer at Cisco, discussing the relationship between reputation and financial performance. (Key takeaway: telling the story in good times and bad). Most compelling: James M. Wiseman’s frank talk about managing image crises in a time of 24/7 news. Wiseman is Toyota’s longtime Chief Communications Officer.
Philosopher and business ethics expert R. Edward Freeman said, “Reputation is an outcome of how you create value.”