Reputation Institute at Davos: Insights and What's Next in Building Corporate Credibility
by Nicolas Georges Trad, Chief Operating Officer and Co-founder, Reputation Institute
Davos is a small village in the Swiss Alps, popular to many as a ski destination but even better known as the conference site of the World Economic Forum, a global foundation that convenes some 2,500 world leaders every January since 1988 for four days of discussions about the most pressing issues facing our planet.
In November 2018, Reputation Institute (Ri) was invited by the British consultancy Brand Finance to participate on a panel that their Founder and CEO David Haigh was organizing at Davos. The session would be sponsored by Tata Consultancy Services and address "The Evolving Role of CEOs in Shaping Brands and Reputation." We saw this as an opportunity to showcase some of Ri’s RepTrak® intelligence technology and gain first-hand insights from encounters with the world’s foremost political, business, and cultural elites. So, Ri CEO Kylie Wright-Ford and I decided to go—and Ri was represented for the first time at the World Economic Forum in Davos.
During our sponsored session, Haigh presented Brand Finance's ranking of the world’s most valuable brands, one that incorporated CEO RepTrak® 2018 data. Kylie represented Ri, and three other panelists participated: Cathy Bessant, Chief Operations and Technology Officer at Bank of America, Natarajan Chandrasekaran, Chairman of TATA Sons, and Jonas Prising, CEO of ManpowerGroup. The session was well-framed and well-attended.
Although we had very little time to prepare for the Davos meeting, we took advantage of the setting to meet and greet as many people as we could. We eavesdropped and participated in many casual conversations that took place in the corridors of the main Congress Hall, where large audiences went to see and hear world leaders and celebrities discuss pet projects.
More enjoyable, however, were the intimate forums of 50-200 people that were organized around topical concerns, where we had the opportunity to listen to fascinating debates about emerging issues. There was plenty of informal chatter also as we mingled with attendees over coffee, snacks, lunch, and drinks at the bar.
Because of our late registration, we ended up staying in a last-minute booking of Airbnb rooms some 20 minutes away from Davos, in the village of Klosters. (Pro Tip: Advance planning is recommended for a trip to Davos, especially for access to the more convenient accommodations of the posh resort or to avoid the snowy drive by staying closer to the conference center!)
What I Learned at Davos
Here are two key takeaways from conversations we joined or overheard. They confirmed a number of macrotrends Ri has already described in our own published research. They also suggest some key opportunities for us to explore further for ourselves and with our clients.
1. Companies should act as agents of global change.
Many plenary discussions over the four days stressed the important role that corporate leaders play, not only within their own communities but on the global stage. To me, the message came across loud and clear: Governments are failing us, and now is the time for companies to step up to the plate and become change agents, tackling key global issues like climate, poverty, and equality.
The world is increasingly looking to big companies and their executives to address global problems. It’s consistent with the results reported by the global PR firm Edelman on the eve of Davos. In their 2019 Trust Barometer, they indicated that people have shifted their trust from countries and governments to “relationships within their control.” Specifically, only 25% of people believe in their economic, political, or social systems. But some 75% trust their employers to do the right thing, followed by NGOs (57%), businesses (56%), and the media (47%).
This shift in trust is nothing new. In fact, Ri pointed to this in our recent Global Reputation Macro-Trend insights. It has also been a hallmark of millennials since they came of age. Millennials expect major companies now more than ever to practice social responsibility, sustainability, and transparency. They want companies that actively invest in the betterment of society and the solution of social problems, prioritize “making an impact” on the world around them, are open and honest about their efforts, and are public about their social initiatives.
2. Companies can build reputation by addressing key social themes.
In session after session, we heard a clear message: Governments are not moving fast enough and politicians are too focused on their own home-market problems. This leaves it up to companies to pick up the slack—to take responsibility to do what’s right rather than just focus narrowly on their products and services.
By implication, given the disappointing lack of performance by governments of all stripes and flavors, businesses have the opportunity to distinguish themselves and build reputation through actions that demonstrate that they are good global citizens by addressing three initiatives: the environment, diversity, and societal influence. In other words, the Citizenship, Workplace, and Leadership pillars of our RepTrak® scorecard.
Even before Davos began, the scene was set for environmental issues to take center stage. The Global Risks Report 2019 declared that humanity was "sleepwalking its way to catastrophe" as extreme weather, failure to act on climate change, and natural disasters topped the list. On the topic of the environment, organizations are expected to take action and do what they know is right. Younger generations expect it. They don’t stop and think about whether to take action, "it just comes naturally, like breathing."
Sixteen-year-old climate activist Greta Thunberg joined Davos with a heartfelt, urgent, and candid message: “I don't want your hope. I don't want you to be hopeful. I want you to panic and act as if the house was on fire.”
An example of an Ri client that has taken the environmental topic to heart is toy company LEGO. CEO John Goodwin attended the 2018 Davos forum and used the opportunity to announce that LEGO would begin using sustainably sourced sugar cane to create their plastic bricks.
Gender Equality and Diversity
Many conference sessions and participants indicated that improving gender equality and diversity are responsibilities that companies must own. Global companies like JP Morgan Chase—also a client of ours—indicated that they are leading the way in gender equality in the workplace. In a panel interview at the Female Quotient booth, CEO Jamie Dimon claimed that more than 50% of his direct reports are women.
“I think the most important thing when you run a company is to have trust and respect for everybody. Otherwise, no one thrives and people hate their company. To me, the exemplar is you walk in the door and you know you’re going to be treated like everyone else, whether you’re a man, woman, gay, black, white, Jewish, Muslim….and there’s equality to that.”
As Kylie pointed out in a forum session on "Influencing Culture: The Role Leaders Play as Change Agents," which addressed both workplace diversity and the need for work flexibility, “Demographics and technology have changed the workplace forever. The idea that millennials and the rising generations are not going to have an overpowering influence when they’re already almost 50% of the workforce is just folly.”
Microsoft, another Ri client, discussed its efforts to advance economic equity across the world as the next phase of globalization begins. Just a week before the Davos summit, Microsoft CEO Satya Nadella announced a $500 million project to build affordable housing in Seattle, where the company is headquartered.
At “Shaping Globalization 4.0," Nadella spoke about the challenge the world faces to ensure both equity and global economic growth. “Markets work, but there are limits, and the question is, in order to drive economic growth in an equitable way, how to deal with the decoupling that’s happening, the decoupling between economic growth and productivity growth and jobs and wages.”
Nadella also stressed the importance of looking internally as a company to take care of its own people, and to drive economic growth and fairness in the local communities in which the company operates. He said, “At Microsoft, one of the things I recognized is, instead of just talking about all the things that we do outside, we have to start with our own employees, their own benefits. Are we doing the right thing with parental leave, with sick leave?”
My Personal Takeaways
In the end, I came away with two more personal topics I think companies like ours and those of our clients will have to focus on in the coming years—empathy and flexibility.
In a digital world where everyone is ever more closely connected, everything moves faster. People who grew up as digital natives expect change to come quickly and expect to be treated as more than economic contributors to their employer’s bottom line. They want closer relationships with the companies they work for. And that requires more empathy from the C-suite—empathy for employees and their families, for their work-life balance, for fulfilling their income requirements, yes, but also their ambitions and dreams.
And that implies flexibility. Now is the time for businesses to fully grasp and integrate expectations of customers, employees, and the broader stakeholder universe into the way in which they do business. Companies have to be flexible to respond to local expectations if they are to make a difference to their key stakeholders and the world around them.
Corporate reputations, like that of Reputation Institute, must be built not only on the quality of the work we do but on the quality of the relationships we build with our clients and employees and the actions we take in the communities around us.
Nicolas Georges Trad
Chief Operating Officer and Co-Founder