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The 18 Immutable Laws of Corporate Reputation

Written by: Andy Marken

Article Overview: Book Review -- Creating, Protecting and Repairing Your Most Valuable Asset

The 18 Immutable Laws of Corporate Reputation

The 18 Immutable Laws of Corporate Reputation: Creating, Protecting and Repairing Your Most Valuable Asset – Ronald J. Alsop; Free Press; ISBN 074323670X, March, 2004; 288 p; $26


Reviewed by G.A. “Andy” Marken, president, Marken Communications,
Andy@markencom.com


After reading about a dozen crisis management planning and execution books, we’ve become somewhat of an expert on the art and craft. Most of these books have a few basic premises – at some point in your professional life no matter how good you are bad things are going to happen to you so be prepared and here’s what you need to do.

That’s looking through the wrong end of the telescope.

Alsop, a seasoned Wall Street Journal columnist, turns this thinking upside down. He starts with the obvious fact that a corporation’s reputation is one of its most valuable assets. Other factors on the balance sheet can be measured, tracked, managed.

Even in the very best of companies you can’t do this with a company’s reputation no matter how many dollars you add to the financial report as “good will.”

Or as Bill Margaritas of FedEx says in the book, "A strong corporate reputation is a life preserver in a crisis and a tailwind when you have an opportunity."

In his usually strong journalistic style, Alsop gives the reader – CEO, CFO, CMO and public relations professional a very up-to-date roadmap he or she can use for establishing a good corporate reputation, maintaining that reputation and repairing a damaged reputation. For the most part, The 18 Immutable Laws of Corporate Reputation follows its own roadmap sticking to the main highways of strategy development. He avoids the backroads of tactics so you focus on what he has seen over his years of investigative reporting as being the key principles and strategies for building, maintaining and fixing your company's reputation.

What sets Alsop’s book apart from the ton of other reputation and crisis management books we have read is that the author supports the 18 Laws with detailed case examples. These corporate examples are more valuable than the 18 principles. His corporate examples include Federal Express, American Express, Johnson & Johnson, Philip Morris (Altria), the Roman Catholic Church, DuPont, Biney & Smith (maker of Crayola crayons), Worldcom/MCI, Starbucks, Merrill Lynch, Disney, Calvin Klein, Wawa, Timberland, and Tommy Hilfinger. He also chronicles a few international companies such as British Petroleum, BMW and Nestlé.

Got a good reputation? The 18 Immutable Laws of Corporate Reputation can be used as a constant reminder as to why you need to be vigilant in your efforts to protect that reputation.

Got a bad reputation? Go out and buy The 18 Immutable Laws of Corporate Reputation right now! Alsop will clearly show you – by example – how to fix that reputation. One of the points you will come away with is that taking a defensive position is usually offensive.

This is no book on theory.

While spelling out The 18 Immutable Laws of Corporate Reputation are important, the most value are his corporate illustrations. Alsop draws his examples from a lifetime of reporting on business. He gives the readers a multitude of tangible corporate examples to clearly illustrate how you – CEO or PR professional – can implement his ideas and recommendations.

Alsop uses both positive and negative examples. Such as doing the right thing, no matter how painful. Johnson & Johnson did the right thing - the trustworthy thing — in recalling Tylenol in response to poisonings in 1982. Catholic bishops did not do the right thing in covering up incidents of sexual abuse by priests. They put the church's reputation above the interests of its parishioners. The result was to diminish the Church’s reputation.

Every company stands for something. A compelling and authentic vision lifts the company's reputation with all stakeholders. Ideally, employees feel passion for the vision, refer to it often and strive to implement it on a daily basis.

Cover-ups almost never work. Today almost anyone can disseminate information quickly and widely on the Internet. There it can be seen by millions of people. In addition, the Internet is a key source of story ideas for many mainstream news reporters and editors.

Poor customer service is one of the chief shortcomings that undermine corporate reputation. Listening to customers is vital in identifying service problems. Sure, written surveys help. However, personal contact especially if it also involves senior management is crucial. Fixing the service problem is the direct – and least expensive -- route to solving the firm’s reputation problem.

Alsop points out that it is possible to acknowledge problems without making a confession. Home Depot acknowledged its customer service issues by proclaiming that customers could once again receive expert advice in its stores. Sales recovered. McDonald's acknowledged the 'unhealthy food' issues by adding fresh salads (and Newman's Own dressings) to its menu. Sales accelerated.

On the other hand, GM failed to own up to its shortcomings of automotive quality and stiff-armed customers who complained. Market share plummeted.

To benefit from the benefits of its corporate do-goodism, a company needs to focus its social responsibility activities, channel its money, and take a leadership position in a concentrated set of community activities that it can champion and "own". Ideally, the social cause should be related to the company's core constituencies. Andrew Carnegie did this with his contributions to building libraries and literacy. Levi Straus does it with AIDS prevention and education. Avon does it with breast cancer; Paul Newman does it by donating all company profits to recreation programs for sick children.
Passionate employees create emotional appeal and shape a corporation’s reputation. It produces a special halo around a company radiating a glow of good feeling, admiration, respect and trust. Advertising can help create an emotional bond with customers, it is strong employee and public relations that create that internal need and personal touch/feel. Harley Davidson has that emotional bond with its customers. AT&T had it and lost it.

Ethical behavior, corporate social responsibility, and CEO reputation are the major determinants of a firm’s reputation. But it is the day-to-day customer interactions that produce the company’s continuing reputation. Alsop advises that management need to develop a corporate culture that "sweats the small stuff” with a special focus on product and service quality.

The stories and examples are the best part of Alsop’s book. He makes it extremely easy to take each example and quickly modify it to use in your organization. It is an excellent recourse for company presidents, marketing and product managers, company lawyers, service/support managers and especially public relations professionals.

Despite what you might think when first seeing that Ron Alsop wrote the book, The 18 Immutable Laws of Corporate Reputation isn’t a damnation of corporate executives run amuck. Instead, he provides hundreds of helpful hints, road markers and examples of what your firm needs to do to ensure it avoids the negative scrutiny of Alsop and other professional journalists.

Very simply stated Alsop gives clear, concise advice…do the right thing for your key constituencies - especially customers. After that all of the other laws of corporate reputation management will fall into place.

You can forgo reading The 18 Immutable Laws of Corporate Reputation. The big question is – Why?

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