How a renewable energy approach can help countries improve their reputation While the importance of a good reputation in the private sector has long been recognised as a key enabler to be success, countries and governments often still lag behind the depth and understanding of reputational value. It is changing slowly, however. A good reputation has an impact on virtually every stakeholder in a country. There is the inside-perspective: For citizens being associated with a positive country offers emotional value (self-esteem). And then there is the external perspective: there is a lot of money at stake for the export industry (including tourism), attracting foreign direct investment (FDI) and much more. Especially in an increasingly transparent and intertwined world, governments can hardly look away when their good reputation is at stake - or, conversely, not acting when their reputation is already suffering. Reputation - as opposed to self-perception - is the perception that other people have of you. This can lead to quite big gaps between the perceived ‘self’ and reputation, e.g., the awareness and understanding by others. Russia, the USA, and since BREXIT also the UK are all experiencing pretty wide gaps between their very high self-perception and their not so great perception abroad. So, what drives the reputation of a nation? In recent years, the Reputation Institute has measured the reputation of the 55 largest economic powers in the G8 countries. The top positions were usually held by all Scandinavian countries, Canada, Switzerland, Australia and New Zealand. The Reputation Institute identified three factors that promote or reduce a nation’s reputation: Environmental perception (openness of the inhabitants, national beauty, lifestyle and also environmental protection measures) Government affairs (security, ethics, international responsibility, social and economic policies) Economy (education and reliability of the workforce, contribution to global culture, and the quality of products and services) These three factors combined provide for increased esteem, more trust, as well as better feelings and more admiration towards a country. To play in the top league of nations, all three factors need to be considered. What does renewable energy have to do with this? "Australia ranked worst of 57 countries on climate change policy" (The Guardian), “Australian government continues to put coal production ahead of climate protection” (NZZ). These are definitely not the headlines that promote a country's reputation, and yet, Australia has to accept such articles over and over again. And rightly so, because Australia's government continues to promote its coal industry (Australia is the world's largest exporter of coal, which is the worst energy source for our climate). While other First World countries are setting themselves (ambitious) climate targets and trying to rely on more renewable and clean energy sources, Australia is sticking to the old status quo. The same article in The Guardian, on the other hand, praises Portugal's ambitions for its efforts to achieve a net-zero emission economy by 2050. For Australia, this has several negative consequences: firstly, the country is portrayed as backward and ruthless - in other words, it loses its impeccable reputation, and secondly, it is about to lose its allies on the global stage (especially its closest ally, the USA, as the Biden government is determined to take decisive action against climate change). Thirdly, it misses a great opportunity to get a piece of the renewable energy cake and fourthly, future Australian governments will be faced with a huge problem: The moment China stops buying coal from Australia, the entire coal industry in Australia – employing some 50,000 people - is at threat. Who gains reputational value through a renewable energy approach? "Solar power reflects Morocco's energy ambitions"(Financial Times). The Kingdom of Morocco is an impressive example of how things can get much better. The country has understood that renewable energy sources (especially solar power plants in the Sahara) increase Morocco's energy security (reducing dependence on foreign energy) and can be exported and commercialised in the future. Positive side effect: according to the Climate Action Tracker, Morocco (and The Gambia) are the only countries that will meet the climate targets of the Paris Agreement. This, in turn, is causing much applause in the international arena and results in countless positive media articles applauding Morocco, as the above example from the FT shows. Morocco has understood the signs of times and knows how to play its cards: Marrakech organised the COP22 - the UN World Climate Change Conference in 2016 - where Morocco, once again, proved to be an African leader for a greener world. In fact, Morocco is playing its environmental card so well that political unrest around the Western Sahara conflict, a severe imbalance between men's and women's education and other internal challenges are being pushed out of the public eye. Anyone who thinks that Morocco is an exception is mistaken. Plenty of other countries are investing in renewable energy for their own future and their reputation. Costa Rica, the small Central American country with about 5 million inhabitants has been causing sensational headlines for years with its climate efforts: "Costa Rica is moving towards carbon neutrality faster than any other country in the world", wrote Vox. This makes the country shine in the public spotlight. But the prime example par excellence is probably Norway. "Why is Norway so far ahead of the rest when it comes to renewable energy?" is the question asked by National Geographic. And indeed, Norway's internal greenhouse gas balance is excellent thanks to almost 100% green electricity and an exemplary electrification model on roads and even in shipping traffic. The question why Norway has progressed so far is in fact easy to answer: the country's entire prosperity is based on the export of its (climate-damaging) oil and gas deposits. Norway thus shows that also the reputation of a fossil fuel exporting country can be perceived as a leader for a more climate-friendly world if the country visibly invests in renewable, clean energy sources. And, again, Norway is by no means the only net-exporter of fossil fuel investing into its green future and “green-reputation”. Saudi Arabia recently launched a $28 billion renewable energy funding initiative, and the United Arab Emirates are hosting the International Renewable Energy Agency (IRENA). Looking at these findings makes it actually pretty easy to advise Australia: If they want to uphold its great reputation it might be wise to do a bit more in terms of renewable energy investment and a bit less in terms of coal subsidies. For its reputation – and for the climate. Learn more about how we can help you, your company or your country when it comes to reputation.
According to a survey by Deloitte 87% of executives rate reputational risk as more important than other strategic risks.1 Despite this fact, both awareness and active reputation management are still vastly misrepresented in corporate environments, especially in medium-size enterprises. Reputational realities, hence, are not yet there where they actually belong to. Manners Make the Brand Rep? The internal culture, value systems and specific organizational and of course historic context up the perceived and actual comportment of a company. A positive or a negative reputation strongly depends on the behaviour of an organization. It is, therefore, reasonable to assume that good behaviour equals good reputation. Manners make the brand rep. However, as in the words of Prof. Einstein: “Everything should be made as simple as possible, but not simpler.” Especially when it comes to such complex systems as corporate reputation. “So as much as reputation management by today can be called a science, it, unfortunately, still is not an exact one.” There are plenty of precedents in economic history that have taught us that reputation is indeed made up of non-linear, highly complex corporate fabric. The conundrum here is despite a company doing its best to behave well, reputational crisis can hit even those corporations that deserve it the least. A Living Organism Given that a corporation is, in many ways, a living organism it is very analogical to the human body with its complex structure. Even those of us who take care of their body, eat well, exercise regularly and live a healthy lifestyle can still get severely ill. How is it that some people who had lived a very healthy way of life actually die younger than those who had smoked, drunk and eaten carelessly so often? The medical explanation for the suffering of those who don’t deserve to suffer lies at least partially in their predisposition towards certain diseases. The same explanation applies to today’s corporations and indeed entire industries. Some have a particular reputational predisposition that others don’t have. If a corporation has a predisposition to reputational crisis, does it mean that whatever move it makes its investments in reputation building will fall short? Not quite. There are tried and tested ways of overcoming difficult situations. What are the measures to take before and after a crisis? How can communications professionals reduce reputational complexities to a minimum? “No matter how complex an issue appears to be at first sight, there is always a solution.” Reputational realities In some cases, the predisposition is not even inherent in the corporation itself but in the industry the company is in. Take the banking industry as an example. How many industries do you know which are described with such terms as ‘cartel’, ‘led to the global economic recession’ or ‘shadow system’ in legitimate academic textbooks? Despite the banks’ efforts to manage their reputation during the post-recession period, the ‘banking image’ began falling again in 2018 - after years of rebuilding and recovering from the 2008 financial crisis.2 The priority should be in being pro-active rather than reactive. Bad reputation management tends to react in turbulent times and overreact to almost every other thing good reputational management start in good times, prepares and when needed, responds adequately. The returns on investment will increase if all communication that affects reputation is crafted in a way that it appeals not only to customers but also to the other stakeholders (i.e. employees, shareholders, partners etc.). It is important to remember that corporate reputation gains and retains strength only when it is applied holistically. In other words, along with the corporate communications department, all other departments such as HR, IT, board of directors, and C-Suite need to be held responsible for possible reputational realities. Culture drives integrity – especially present within long-term, often family and value-oriented companies. Almost half of the top ten brands with high reputation are from the luxury industry.3 Return On Integrity Overcoming reputational crisis might require taking a risk to build trust. Leader and decision-makers in charge to prevent or solve problems related to reputational risk need to adopt lateral thinking. If it is not a common reputational reality then it requires uncommon sense. Integrity in this context is about making the right decision to take the right step. ROI here stands for Return On Integrity. If you are interested in learning more about reputational realities and how your company can prepare better, get in touch with us. References “[email protected] | Deloitte | Survey, Global, Reputation, Risk.” Deloitte, 30 Oct. 2018, www2.deloitte.com/global/en/pages/governance-risk-and-compliance/articles/reputation-at-risk.html. Garver, Rob. “Bank Reputations Fall for First Time in Five Years: 2018 Survey.” American Banker, 28 June 2018, www.americanbanker.com/news/bank-reputation-survey. “3 Surveys Summarised: Reputation Institute, Watson Helsby and Vuelio.” PR Measured, 18 Apr. 2016, prmeasured.com/3-surveys-summarised-reputation-institute/.
Turning a Reputational Crisis Into a Movement Most leaders in the business world know both what reputational crisis’s and movements are. A crisis on its own doesn’t lead to a movement, though, and only few know how to turn a reputational crisis into a movement. Recent political and social dynamics have once again shown, how a crisis turns into a movement: Black Lives Matter. While this might be one of the most important movements ever, history teaches us that there are three ways on how such reactions can be triggered. The protagonist from Wag the Dog who knows a thing or two about movements tried to explain emphatically saying: “We remember the slogans; we can't even remember the wars. (…) Naked girl covered in Napalm. 'V for Victory'. Five Marines raising the flag, Mt. Suribachi. You remember the picture 50 years from now, you'll have forgotten the war.”1 In many ways the protagonist of the film was right. The historical course of events, reasons or details of those wars are almost forgotten by the majority, whereas the impact of the movement triggered by these symbols is eternal. When we analyze history, we find that all those crisis-to-movement developments can be assigned to either of three typologies: Type A: turning an own reputational crisis into a movement Type B: turning a general reputational crisis into a movement Type C: the reverse effect (turning a movement into a crisis) Type A: turning an own reputational crisis into a movement Throughout history, there are examples of how not just a general crisis but also an organization’s own crisis can be turned into a movement. Movements need not necessarily be global. They can be local, too. Case in point: Globe Air in Basel, Switzerland, one of the world’s art capitals. In April 1967, a disaster befell on Switzerland’s biggest charter airline at the time, Globe Air. One of their airplanes crashed in a thunderstorm close to Nicosia, Cyprus. As a result, 126, mostly Swiss, passengers died. One of the pilots had insufficient training on the aircraft and both of the pilots had violated the limits on operating hours. The owners of the airline – who were connected to Basel – were sued severely but they didn’t have enough insurance to pay the victims. The only way to pay was through selling their art. When word got out about the art being sold urgently to new owners outside of Basel in order to fund the claims, the people of Basel became deeply proprietary about it. The city took the decision to let the people vote about the rising tension over letting go of many valued pieces of art. As Simon de Pury, the Swiss auctioneer, wrote: “What followed was one of the most colorful campaigns in history. Politicians dressed as harlequins to get out the vote. There were huge street fairs. (…) bands played “All You Need is Picasso,” to the Beatles’ “All You Need is Love.” People wore “I Like Pablo” badges, evoking the “I Like Ike” buttons of the Eisenhower presidential campaigns in America. (…) It was the first time in democratic history that a city had voted for art in this way. This was Basel’s finest hour.”4 The movement resonated strongly. Even Picasso himself was so touched by the spirit of the locals that he donated four more paintings to the Kunstmuseum. It then inspired avid patrons of the art to make donations, too. As a result of all of this, the Globe Air tragedy was turned into a triumphant movement for the history of Basel. It wasn’t a general crisis but an organization’s own financial and reputational crisis that was transformed into a movement. This is a typical example of Type A. Type B: turning a general reputational crisis into a movement Black Lives Matter, for example, may be the largest movement in US history. Recent polls suggest that about 15 million to 26 million people in the U.S. have participated in recent protests.2 Black Lives Matter was founded back in 2013 and yet the majority of the world didn’t know about it until very recently - when it became a global movement. The moment of crisis was triggered by the lethal police brutality against African American George Floyd. However, the moment when the movement began was after those black screens were posted all over social media and even more so by the image of the huge graffiti art that went viral all over the world. Songs, video clips, documentaries, articles, posters were spread... “I can’t breathe!” were his last words that will never be forgotten. This is a typical example of Type B. The Reverse Effect: Type C (turning a movement into a crisis) We all witnessed how Black Lives Matter turned the on-going crisis in the US into a global movement beyond the US. The reverse effect (Type C) demonstrates how the very movement turned into a potential crisis for brands. Today, brands such as Adidas, Nike, YouTube, Amazon and Netflix have been expressing solidarity with the Black Lives Matter movement. Johnson & Johnson has announced it is to stop selling its skin-whitening Clean & Clear Fairness line of products, which are marketed in India, Reuters reports. Quaker Oats says it will change the branding and name of its Aunt Jemima pancake. Colgate-Palmolive is the latest brand to announce change, saying it will review the name of its toothpaste Darlie – labelled “Darkie” up until 1989 – which in Chinese means “Black People Toothpaste”.3 Cass Business School, a university in London, is changing its name because of its associations with Sir John Cass, a 17th Century merchant and proponent of slavery. These are typical examples of Type C. Key Takeaways A crisis usually doesn’t turn into a movement by itself. The missing link is the collective, perhaps even creative, response to a crisis – this is what turns or spins it into a movement. Monitoring and Observation Any organization (business, state or government) should have adequate monitoring systems in place in order to rapidly grasp dynamics. These generally include a combination of active media monitoring, social media listening tools and semantic tools to analyze tonality and direction of an evolving crisis Agility and Scenario Preparation No reality is ever as planned. But having a plan, a structure and the capability in place that allows an organization to deal with an evolving situation rapidly and in the most efficient manner possible. Developing an awareness of how reputational strategies are pro-actively built over time is an important steppingstone. Leadership Development Not every crisis is avoidable, and not for every crisis is there a positive net effect for an organization. However, the outcome and resilience (i.e. the ability to ‘bounce back’) are very closely correlated to how a crisis is managed in the first place and this, in turn, is something that should feature in every leader's curriculum. If you would like to learn more about what chances and threats your company may have in the current situation please get in touch with our team, we are happy to help you. References: “Wag the Dog.” IMDb, IMDb.com, 9 Jan. 1998, www.imdb.com/title/tt0120885/. Buchanan, Larry, et al. “Black Lives Matter May Be the Largest Movement in U.S. History.” The New York Times, The New York Times, 3 July 2020, www.nytimes.com/interactive/2020/07/03/us/george-floyd-protests-crowd-size.html. “Black Lives Matter Movement Forces Brands' Marketing Review.” WARC, www.warc.com/newsandopinion/news/black-lives-matter-movement-forces-brands-marketing-review/43762. “Artopolis.” The Auctioneer Adventures in the Art Trade, by Simon De Pury and William Stadiem, St. Martin's Press, 2016.
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