“From CSR to Corporate Responsibility” – An Interview with Stephen Hahn-Griffiths
Stephen Hahn-Griffiths is the Chief Reputation Officer at Reputation Institute. He is a driving force in reputation thought-leadership, reputation risk management, corporate responsibility, integrated marketing communications, and brand purpose. As a champion of reputation intelligence and vanguard of RepTrak — Ri’s proprietary reputation mining, measurement, and management framework — Stephen plays a pivotal role in spearheading best practices. In prior roles, he was as Chief Strategy Officer at leading multi-national agencies, including Leo Burnett, Mullen, and Saatchi & Saatchi. His academic credentials include an MBA from Stern, NYU. Stephen is an active public speaker on reputation and is often cited in leading media outlets, including Forbes, WSJ, USA Today, Financial Times, Associated Press, NPR, Bloomberg, and Lexis Nexis.
You’ve said that “reputation is less about Corporate Social Responsibility and more about a holistic approach to overall Corporate Responsibility (CR)” – can you explain what you mean?
Society is demanding that companies serve a greater purpose beyond their products and services. To earn and maintain a strong to excellent reputation, organizations must deliver in the areas of social, fiscal, environmental, and employer responsibility. With these growing demands, we find that reputation is less about Corporate Social Responsibility and more about a holistic approach to overall Corporate Responsibility (CR). The social part, by itself, is restrictive. Yes, organizations are pressed to do the right thing across the social realm, but increasingly in other key areas as well.
Companies that lead in CR have earned greater levels of trust from stakeholders. CR helps companies establish foundations for mitigating, amplifying, and repairing trust. But the connection between trust and CR is yet to be established in the eyes of the general public and presents a unique opportunity for companies to impact their overall reputation while being genuine, responsible and trustworthy.
An example of a company that has significantly improved in corporate responsibilityin recent years is Adidas AG. A top-20 performer in the 2019 CR RepTrak 100, Adidas has established itself as a leader in sustainability and an industry disruptor.
The concept of corporate responsibility (CR) has experienced an evolutionary process. What started as a focus on the environment — carbon footprint, recycling — and philanthropy is now a balancing act of business and society, thus intrinsically tied to profitability.
In other words, corporate responsibility is no longer just a measure of goodwill, it’s a measure of being a good business. Investors and credit rating agencies increasingly rely on ESG (Environmental, Social, Governance) metrics, making corporate responsibility measures indispensable for the long-term success of organizations. For companies, that means delivering on CR is not optional, but a perquisite to profitability.
We know from our RepTrak studies that a lift in corporate responsibility directly impacts a company’s revenue and other business KPIs.
For example, a 5-point increase in CR…
- increases purchase intent by 8.0%
- increases advocacy by 7.4%
- makes your company 4.7% more crisis-proof
- increases trust by 6.0%
- helps attract better talent with a 5.1% increase
We define reputation as an emotional connection between organizations and their key stakeholders. Leaders in CR maintain a stronger emotional connection compared to performance in the 7 dimensions of reputation (what companies do, rather than the emotion that they evoke).
Today more than ever, employer reputation is a key business driver. For example, a company with a poor reputation spends at least 10% more per hire to be competitive vs its highly reputed rivals. That increases operating expenses and negatively impacts the company as being viewed as an “employer of choice.”
Purpose and reputation are critical today to attract talent, it accounts for over 70% of the reason why talent choses a company over another!
CEOs are increasingly concerned about talent availability and core skills needed. But talent today seems to be looking elsewhere. Global employers are concerned of losing out to high-growth enterprises, but there’s still a wide gap between beliefs and intentions and action. For example, 79% of business leaders think that purpose is central to business success, but only 34% say that purpose is a guidepost for decision-making.
That gap is telling.
How are the top companies getting it right?
Two key points:
- Their messaging is aligned to corporate purpose. The top 10 companies in CR, have higher levels of brand expressiveness, with 41% of respondents who perceive the companies to be genuine in what they do and say, and with 32% who agree that the companies communicate in a relevant manner. Yet, there is a lot more opportunity to communicate corporate purpose with key stakeholders. Over 60% of the public are not sure or ambivalent to companies’ corporate expressiveness and communication.
- They lead with responsibility and ethics. Among respondents familiar with CEOs, companies see a very significant 9.3-point lift in CR. Companies within the CR top 10 have CEOs who are seen to be responsible, behave ethically, and care about social causes. These CEOs have responsibility scores that are 5-points higher than companies that did not make the top 100.
How do you measure reputation? What are the 7 dimensions of reputation you’ve developed?
We built a research-based data driven means-end model by which to calibrate reputation. It’s a Reputation Intelligence System that yields quantifiable and actionable insights along seven dimensions:
- Products/Services
Do you deliver on a world-class experience? High-quality Products and Services can profoundly shape reputation. - Innovation
Is your company static or dynamic? Forward-thinking and creatively-inspired companies have a reputational advantage. - Workplace
Corporate culture directly impacts recruitment, retention, and talent acquisition. Positive perceptions of a workplace can help you achieve employer of choice status. - Governance
Can your company be trusted to do the right things when no one is looking? Practicing good governance is key in earning trust in times of crisis. - Citizenship
How does your company align with social values? Being a good corporate citizen has a positive impact that helps to make the world a little better. - Leadership
Companies with executives who align brand purpose with daily business activities outperform those focused solely on financials. - Performance
Financials matter, but it is important to link your financial success with positive social impact to maintain a license to operate.
RepTrak, as we call it, identifies which dimension is the most important to any given market, industry, or company in driving reputation and business results. We examine reputation by industry – Airline, Consumer, Energy, Financial Services, Pharma, Retail, and Technology etc.
What role does the CEO play? How does the CEO represent the brand?
CEOs are being judged by the merits of ethics and not just EBITDA, or share price. First and foremost, a CEO needs to be responsible and behave ethically.
Data shows that in driving CEO reputation, the perceptions of a CEO’s ability to act responsibly, exhibit human empathy, and care about social causes matters most. Although it seems obvious, we should state it anyway: CEOs with strong reputations can elevate the reputations of their companies, while CEOs with weak reputations could pose a risk for their company.
The reputation of CEOs is shaped by four key dimensions:
- Leadership
The CEO has a strong leadership image, clear strategic vision, and anticipates change. - Responsibility
The CEO acts responsibly, behaves ethically, and cares about social causes. - Influence
The CEO has good communications skills, a global perspective, and is viewed as highly influential. - Management
The CEO is an effective manager who understands the business and creates stakeholder value.
Fulfilling expectations in terms of Leadership, Management, and Influence are just table stakes. To be highly reputable today, a CEO needs to lead the way by doing what’s right when no one is looking:
- Act responsibly, and demonstrate a focus on social issues.
- Deliver on what matters and simply do the right thing.
- Meet elevated expectations for ethical behavior.
- Be empathetic and human while creating an emotional connection with stakeholders.
- Deliver assurance to those that matter most during a time of instant public judgment.
Can you name some of the leading CEOs in your 2019 rankings?
The CEOs who led the way in 2019 ranked highly based of the perceptions of taking responsible actions. These ten individuals took a stand on the things that matter to the stakeholders they serve:
Fabrizio Freda, The Estée Lauder Companies; Carsten Spohr, Deutsche Lufthansa; Ben van Beurden, Royal Dutch Shell; Michael Dell, Dell; Niels B. Christiansen, The LEGO Group; Ralph Hamers, ING; Chris Nassetta, Hilton Worldwide; Shuntaro Furukawa, Nintendo; Emmanuel Faber, Danone; David Holl, Mary Kay.
More and more CEOs are coming to us for an objective view of where they stand. We help leaders at the world’s largest companies build credibility with the people that matter most — by delivering data-driven insights about how they are truly perceived.
What happens when things go wrong? Can you give us an example?
I don’t think it’s appropriate for me to publicly disparage any given company.
But in general, when things go wrong, the data tells us that reputation recovery is especially driven by increases in perceptions of Corporate Responsibility – Workplace, Governance and Citizenship; but these are also some of the dimensions in which companies have the lowest scores, indicating a significant upside opportunity for all businesses.
Thanks so much for your time.
INTERVIEW by Christian Sarkar