As companies wrestle with how to approach a divided U.S. political climate, new research from The Harris Poll shows that Americans view the reputations of some companies as aligned with their individual values. Republicans hold the reputations of Chick-fil-A and Hobby Lobby–companies that have vocally shared their conservative beliefs–significantly more favorably than Democrats do. Democrats perceive Target’s reputation more positively.
“In such divided times, as companies scurry to figure out if and how to respond to the issues and commentary of the new administration, we find that corporate reputation perceptions can be just as polarizing,” said Wendy Salomon, vice president of reputation management and public affairs at The Harris Poll, in a statement. “Companies that have taken very public stands for their beliefs are rewarded by consumers of similar conservative or liberal views, but there is also clear risk among those who feel otherwise.”
According to Harris Poll’s research, Chick-fil-A earns a higher reputation score among Republicans than any other company, scoring 17.4 points higher among Republicans (“excellent”) than among Democrats (“good”). Hobby Lobby also scores 17 points higher among Republicans (excellent” compared to “fair” among Democrats). Democrats score Target 11.8 points higher (“very good”) compared to Republicans (“fair”).
“Values play a bigger role than ever before in corporate reputation, and the business significance of a company’s reputation has never been higher,” said Mark J. Penn, managing partner and president of The Stagwell Group LLC, which owns The Harris Poll, in a statement. “Consumers are keenly interested in how companies engage with the world, and that includes corporate ideals. As the red versus blue duel of politics impacts corporate reputation, we expect to see more alignment along party beliefs.”
The Harris Poll Reputation Quotient, which identifies movement, trends and insights in a changing corporate reputation landscape, reveals reputation ratings for the 100 most visible companies in the U.S., as perceived by the general public. A trusted baseline for understanding and managing corporate reputation and identifying new market risks and opportunities, the RQ measures companies’ reputation strength based on the perceptions of more than 23,000 Americans across six corporate reputation dimensions: Social Responsibility, Emotional Appeal, Products and Services, Vision and Leadership, Financial Performance, and Workplace Environment. In this year’s study, 17 of the 100 most visible U.S. companies earned “excellent” reputation scores and 34 companies received “very good” scores. The Harris Poll 2017 Reputation Quotient Summary Report can be found at www.theharrispoll.com/reputation-quotient/.
Vision and Leadership More Important Than Ever, Yet CEOs’ Reputations Failing
Harris Poll’s analysis shows that while Vision and Leadership attributes are increasingly important to reputation equity, an astounding half of Americans rate the reputations of today’s corporate leaders and CEOs as “bad.” Only one-quarter of the public rates CEOs with “good” reputations; 26 percent are neutral. Americans cite trusted, ethical and accountable as the most important traits for CEOs, while it is less important for business leaders to be curious, visible, bold and risk takers.
“Vision and Leadership impact a company’s reputational equity now more than it did ten years ago, meaning today’s CEOs and business leaders have a major reputation issue,” said Salomon. “It’s important that companies continue to find ways to demonstrate the value their vision for the future delivers, and how their team of leaders can make that vision a reality.”
Tesla Unobtainable for Many Yet Reputation High
Tesla Motors makes its RQ and top ten (#9) debuts with an “excellent” reputation rating, despite the fact that many Americans may never purchase one of its products – or even ride in one.
“Many companies with high reputations are fairly ubiquitous; you interact with them in your home, you shop at these stores and you use their services,” said Salomon. “What’s interesting about Tesla is that while Elon Musk undoubtedly brings a ‘celebrity CEO’ factor, it’s a company that isn’t accessible to most consumers. Given this strong reputational backdrop, and that Musk has the ear of the Trump administration, Tesla will be a fascinating company to watch moving forward.”
Highly Visible for the Wrong Reasons
The RQ study shows that Americans have a deeper knowledge of how companies behave with companies like Takata (massive airbag scandal) and Mylan (EpiPen pricing scandal) more visible due to reputational crises. This year marks the first time Takata and Mylan have appeared on the Most Visible Companies list, with “fair” (Mylan) and “critical” (Takata) ratings.
“Takata and Mylan are not household names, yet due to recent events, they are well known,” said Salomon. “It’s a clear indication of the level of understanding and engagement the public has in the granular details of crisis situations. Corporate behavior has become common dinner table conversation.”
Most Damaging Scenarios to Corporate Reputation
According to the RQ study, the biggest risks to corporate reputation are intentional wrongdoing or illegal actions by corporate leaders (cited by 85 percent of Americans), lying or misinterpreting the facts about a product or service (83%) and intentional misuse of financial information for financial gain (82%). Other risks to reputation damage include security or data breaches (74%), unfair workplace conditions and culture (67%), workplace discrimination (65%), product recall due to contamination (65%) and poor leadership conduct (64%).
When asked which company damaged their reputation the most this past year, most consumers cited Wells Fargo (23%), followed by Volkswagen (9%) and Samsung (5%).
“Incidents that introduce reputational risk are not created equal,” said Salomon. “Some crises that we’ve seen play out in the past few years cut at the core of what the public sees as most damaging, while other situations aren’t such a big deal. Reputation managers often face great internal and external pressures to respond, so the more they can understand the scale of response that makes sense the better.”
Amazon, Wells Fargo Make RQ History
Wells Fargo & Company, tainted by a fake accounts scandal, fell 20.6 points, surpassing Volkswagen’s 2016 decline (-20.5) as the largest drop in RQ’s 18-year history.
Amazon.com – claiming the top spot for the second consecutive year and marking the ninth consecutive year the online retailer has ranked in the top ten – recorded the highest rating (86.27) by any company during nearly two decades of RQ corporate reputation insights.
Driven by its product offerings and an emotional connection with consumers, Amazon.com is unsurpassed in four areas important to reputation – Emotional Appeal (includes elements of trust, admiration and respect), Products and Services (includes elements of quality, innovation and good value for money), Vision and Leadership and Financial Performance.
Notable Improvements, Prominent Declines
Volkswagen Group, plagued by an emissions scandal in 2016, is starting to show signs of reputational recovery, rebounding 8.7 points to an RQ score of 63.46 (poor). The company tied with Toyota Motor Corporation (80.21, excellent) for the largest RQ increase in 2017. JCPenney (+6.4) also shows notable improvement, earning the highest RQ score the company has had in the past decade. UPS (2012) and 3M (2011) return to the top ten after multi-year absences.
Wells Fargo and Takata are the only companies to score at ‘critical’ levels. Wells Fargo fell 20.6 points, from a “fair” (69.73) score in 2016 to 49.11. Takata debuted at the bottom (#100) of the RQ list with a score of 48.70.
Other companies showing marked declines are Procter & Gamble Co. (-5.3), Samsung (-5.3), Chipotle (-4.6) and Bank of America (-4.6). Procter & Gamble’s decline is evident across all reputation dimensions, but particularly pronounced with Workplace Environment.
The 2017 Harris Poll Reputation Quotient was conducted online in English, among 23,633 U.S. respondents from November 29 – December 16, 2016, with preliminary nominating waves of research conducted among 4,092 respondents from September 13 -15 and October 4 – 6, 2016. The Annual RQ study begins with a Nomination Phase, which is used to identify the companies with the most “visible” reputations. All respondents are asked, unaided, to name companies that stand out as having the best and worst reputations. Online nominations are summed to create a total number of nominations for each company. The final list of the 100 most visible companies in the U.S. is measured in the RQ Ratings Phase. In the ratings phase, respondents are randomly assigned to rate two of the companies with which they are “very” or “somewhat” familiar. After the first company rating is completed, the respondent is given the option to rate the second company. Companies are rated on their reputation on 20 different attributes that comprise the Reputation Quotient instrument. The attributes are grouped into six different reputation dimensions: Emotional Appeal, Financial Performance, Products and Services, Social Responsibility, Vision and Leadership, and Workplace Environment.
Respondents for this survey were selected from among those who have agreed to participate in Harris Poll and sample partner surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in an online panel, no estimates of theoretical sampling error can be calculated.
Source: The Harris Poll
MacDailyNews Take: Choosing a side on virtually any issue, whether it be corporate taxes, App Store approvals, gun emojis, or H1-B visas risks alienating +/-50% of your potential customer base.
Companies, especially those with excellent scores currently, should be wary of the risk. CEOs themselves should be cognizant that not every one of their employees shares their views on every single topic and that, by presuming to speak for the company instead of merely for themselves, they risk tainting their company’s brand with +/-50% of the company’s potential customer base.
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