Large technology companies will experience the same collapse in reputation as banks have endured in recent years unless they rapidly change their policy approach, business leaders have cautioned.
Their warning was directed at the influential heads of technology companies, such as the Silicon Valley giants, who were told they needed to recognise that self-regulation will not be sufficient to stave off mounting public alarm about issues such as privacy.
“Self-regulation, no matter what you do, is just not going to be good enough [for tech companies],” said Paul Achleitner, chairman of the supervisory board of Deutsche Bank. Addressing the Davos economic forum, he pointed out that a self-regulatory approach had been previously employed by banks — but notably failed to quell a political backlash against their over-reach.
When I started working in a business school, mid 1990s, Goldman had a great name and its reputation stood for excellence. Today, post IPO, it appears they actually have to sell the company to smart and talented people. I guess this is the ebb of flow of a firm’s “good name.”
“A panel of Goldman Sachs employees spent a recent Tuesday night at the Columbia University faculty club trying to convince a packed room of potential recruits that Wall Street, not Silicon Valley, was the place to be for computer scientists.
The Goldman employees knew they had an uphill battle. They were fighting against perceptions of Wall Street as boring and regulation-bound and Silicon Valley as the promised land of flip-flops, beanbag chairs and million-dollar stock options.”
The latest video from Deutsche Bank is getting quite a bit earned media coverage. The bank’s traders receive what the FT called a “severe warning” about their online behaviors. This reputation risk exposure comes from the context of regulatory scrutiny interacting with personal use of digital media.
In an FT blog post, Andrew Hill describes this video as an effort to address the bank’s cultural failings. I think there can be little doubt that banks, broadly speaking, have lost the plot and hopefully videos like this are accompanied by meaningful follow-through and policies with teeth.
S+B has shared a new PwC survey, The Trust Agenda, reporting that more CEOs believe trust in their industry is on the rise than the number of CEOs who believe trust is falling. The reasons reported are several.
Greater emphasis on good growth
Good growth has a longer term orientation
Good growth is sustainable
Good growth is socially responsible (making up, somewhat, for the lapses of the past 3 or 4 decades)
The report is worth a read and is based on a survey of more than 1300 CEOs in 68 different countries.
Relatively hot off the press, academics from Stanford an Emory business schools argue that “fence-mending” for a damaged corporate reputation, following a serious accounting restatement, should also specifically target “softer” constituents such as customers, employees and local communities.
I was fascinated to see that leading business strategy thinkers are beginning to think of reputation as a driver of strategy and and just a consequent.A talk on Monday morning by Nicolaj Smiggelkow, the Don M. Knott Professor at the Wharton School… More…