Tuesday, May 3, 2011

Things Can Change So Fast

Within weeks after Harris Interactive completed the field work on their 12th annual U.S. Reputational Quotient Survey, some of the companies they praised so highly, took it on the chin.

In a news release, Harris Interactive said, “After falling to unforeseen lows amidst scandals, recalls and self-inflicted demonization economic crises, the American public’s perception of the reputation of corporate America appears to be on the rise.”

Harris reported, “Overall corporate reputation is experiencing rehabilitation as the American public gives high marks overall to corporate America…”

Google took over the top spot in the Harris survey, pushing Berkshire Hathaway to 4th.

Johnson and Johnson ranked 2nd, 3M Company was 3rd, Apple moved into 5th followed by Intel Corporation at 6th, Kraft Foods at 7th, Amazon.com to 8th, General Mills at 9th and Walt Disney Company 10th.

Now, here’s the problem. Google, the search engine giant, is trying to cope with a series of anti-trust investigations, some privacy issues and regulatory challenges

Johnson and Johnson has been making headlines for months because of massive product recalls. Defective replacement hips is one of more than 50 voluntary product recalls that J&J has issued just since the start of 2010, covering brand names that read like an inventory of the family medicine cabinet. Tylenol and St. Joseph Aspirin were recalled for foul odors people said made them sick. Benadryl and Zyrtec were recalled for botched amounts of ingredients. Rolaids were recalled for containing bits of wood and metal.

Warren Buffett and Berkshire Hathaway made negative news after revelations that one of his top lieutenants, David L. Sokol, bought $10 million of shares of Lubrizol while negotiating an acquisition of the company.

Apple was accused of tracking their phone users’ locations and storing the data for up to a year. The company never admitted it tracked individuals, but did concede their phones were storing some location data up to a year because of a software bug. It promised a fix to reduce the duration of the storage.

Amazon’s EC2 “Cloud” Web-hosting service crashed and took down scores of on-line operations that depend on Amazon to host their services.

Sony was not in the top 10, but Harris said the electronics company had scores indicating it had an excellent reputation. That was before April 20 when Sony shut down access to its PlayStation Network and waited seven days to tell its 77-million customers some of their personal information had been stolen then two weeks later Sony Online Entertainment announced another 25-million customers’ on-line data may have been high jacked.

Microsoft, the number seven ranked company the year before, fell to 16th in the results from the January-February 2011 survey.

There is a mixed message in the survey report.

1. Your reputation and public perception can plunge almost overnight, while it takes a lot more time to recover.
2. A big hit to your reputation and public perception may not automatically mean your company is toast!

To make that second point, consider BP is ranked 59th out of 60. And in spite of the mounting lawsuits and continued negative publicity, the company’s profits soared in the year since the explosion that killed eleven workers and polluted the Gulf of Mexico.