US Technology Industry: A Sector Under Pressure
This post summarizes RI's recent US Technology RepTrak, revealing 2018's US technology companies with the strongest reputations.
Technology Company Spotlights
NVIDIA: The technology company with an excellent reputation
Although it's only known by 16.4% of the General Public, those familiar NVIDIA rank it with an excellent reputation. In fact, it is the only technology company in Q1 2018 to have an excellent score, placing it in the number one spot as the most reputable technology company in the US. NVIDIA’s excellent reputation is driven by high scores in Innovation, Products, and Financial Performance. With a strong commitment to social responsibility, NVIDIA uses its AI technology to drive positive improvements in society. It is an example of a technology company going beyond products and profit and focusing on societal impact.
NVIDIA believes the world wants and needs innovative products that improve lives through technology, and we're fully engaged in bringing them to market, with an intense focus on energy efficiency. - The NVIDIA Commitment
Samsung: Going against the reputation tide
While average corporate reputation in the US declined in 2018, Samsung managed to retain and grow its reputation by 0.7-points and comes in 2nd behind NVIDIA with a strong score of 78.5. Samsung’s transparent communication and quick actions following the Galaxy Note 7 battery crisis in 2017 has allowed the company to repair its reputation.
Apple: Signs of a reputational comeback
At the beginning of 2018, Apple was one of the companies that experienced the biggest reputation drops with a reputation score of 11.4-points, placing it in 38th spot in the technology industry. This decline was especially driven by its decline in Leadership (-9.6-points) and Governance (-16.0-points) following controversies about tax sheltering and battery tampering.
Figure 1: Apple Reputation in the US (2015-September 2018)
Apple’s recent commitment to data privacy and transparency — led by the very outspoken CEO Tim Cook — as well as the absence of any significant scandals have helped turn around public perception. In September 2018 Apple’s reputation moves back to the strong range with a 4.5-point increase and this recovery is mainly driven by an increased positive perception in Governance (+9.4-points).
Facebook: Losing face and reputation
Facebook has seen dramatic reputational loss in the past year, dropping into the weak range in November 2017 with no signs of recovery. Facebook’s reputation dropped 8.1-points in October 2017 after a year of fake news allegations and Russian interference with the 2016 presidential election. In March 2018, Mark Zuckerberg stated: “We a responsibility to protect your information. If we can’t, we don’t deserve it.” In September 2018, that promise was broken with another security breach exposing the data of 50-million users. As a result, Facebook’s reputation declined even further with the steepest decrease in its Leadership dimension (-10.4 points).
What we learned from our 2018 data
Between election meddling, data breaches, Congressional hearings, and stock declines, it’s safe to say that 2018 has been a challenging year for the technology industry. In 2017, the technology industry was one of the most reputable; however, over the past 12 months there has been a drastic decline and the industry currently sits in the average range. Although faced with many challenges and a decline in reputation at the earlier part of the year, the most current data signals a chance for recovery.
Figure 2: Technology Industry Monthly RepTrak® Score Trend (June 2017-September 2018)
What can technology companies do to improve their reputation?
- Practice corporate responsibility in Products and Services. Products and Services continue to be a key driver for technology companies, but the companies’ fairness, transparency and positive influence on society are becoming more important in driving corporate reputation. To be reputable, technology companies need to go beyond Products and focus on areas of Governance and Citizenship.
- Leverage your leadership. Historically, technology companies have had high profile celebrity CEOs who mainly focused on products and profits. From our recent CEO RepTrak data, we know that CEOs who focus on responsibility are the ones that lead in reputation. These responsibility-focused leaders, from Microsoft’s Satya Nadella to Google’s Sundar Pichai, for example, have been very active in and outspoken on the topic of immigration in the US.
- Beware of data breaches. Against the backdrop of numerous data breaches and the launch of GDPR, data privacy issues are more relevant than ever. That specific risk in the technology industry has devastating consequences as companies attempt to forge emotional bonds with the General Public.
- Earn back trust through communication. Amidst the decline in reputation, levels of doubt increase. Tech companies can still regain the trust of over 50% of the General Public through clear communication, open dialogues, and transparency. As it stands in 2018, one in three respondents are unsure whether technology companies communicate openly.
- Reputation requires action. It is important to know and track reputation, so it can be properly managed. Reputation is a KPI and an insurance policy. The most reputable technology companies use Reputation Intelligence to focus resources, make secure bets, and mitigate risk.
About the Study:
US Technology RepTrak is a survey based on more than 23,000 ratings from the informed General Public in the US collected in January-September, 2018. It evaluates technology companies based on their performance in reputation and focuses on reputation movement between the first and third quarter of 2018. Companies ranked are those whose businesses focus on the development, production, and services that incorporate technology – pure tech companies, information platforms, and telecommunication companies.