Unraveling one slender thread around reputation

Sometimes you get some interesting pieces to a puzzle; and only months later as more pieces arrive do you start to see how they may be fitting together.

Let’s try putting a couple of pieces together on the topic of business reputation in the United States, thanks in large measure to data generated from the often insightful Pew Research Center.

First, let’s start with the sobering finding that public regard for business corporations has been in a downright plummet… from 73% of Americans favorable in 2000 to 45% favorable in late 2005. How low is 45%? Well, in 20 years of data collection, it’s never before dropped even as low as 50/50. Here’s a link to the Pew Research Center report.

Now, let’s mix in a broader finding from reputation research. This finding is that a large portion of the public regard for a company can be traced to the public perception of how that company treats its own employees. Although I’ve seen this regularly confirmed in proprietary research over the years, I don’t have a ready link to a publicly-available study. (I’d be happy for any comments that might remedy that.)

Now for the linkage. Pew has new research about workers in America that shows a profound shift in the levels of loyalty between employers and employees. According to Pew, “By a margin of 56% to 6%, Americans say employers are less, rather than more, loyal to workers now than they were a generation ago… By a similar margin of 51% to 8%, the public says workers show less, rather than more loyalty, to their employers now than they did a generation ago.” Here’s the link to that research.

So, to summarize:

Unprecedented drop in the underlying loyalty between employees and employers.

Unprecedented drop in public favorability towards business corporations.

Coincidence?

I think not.

Causality is tougher to prove. But this potential link does raise a couple important questions, given the pressures of today’s business environment:

1) can the sense of loyalty ever be restored between companies and their employees, generally recognized as one of their most valued assets?

2) if the answer to 1) is “no”, is there anything in the relationship between employer and employees that is powerful enough to substitute for loyalty – purpose, personal challenge, intellectual growth, etc?

(Posted by Ray Jordan)

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10 Comments

Filed under Communications / PR, Reputation

10 responses to “Unraveling one slender thread around reputation

  1. I’d say 2) is correct. Loyalty for the sake of it is a fragile thing as the numbers demonstrate.

  2. I think that you must overtly consider power here. When people feel powerless over their lives, careers, or pensions in the face of so much (often negative) change, it is not surprising that their trust and loyalty disappear. The old contract of giving up some of your own power of self-direction in exchange for stability, income, progress etc. has been breaking down for decades now.

    In our current business environment, companies can no longer offer lifelong employment, generous pension plans, and maybe not even a living wage or health insurance. Yet they still somehow expect employees will offer the same level of service, loyalty etc. in order to keep the little that is left. All this at the same time CEO pay has skyrocketed and scandals abound (at least it seems so if you keep up with the major news channels). Management by fear too often seems to be the name of the game.

    So, if you are searching for what might replace loyalty, you first need to figure out what the new power contract might look like. For example, is there a way an organization can acknowledge future uncertainty in its promises to employees? Are there different kinds of employment contracts, compensation etc. that can take this new environment into account?

  3. I agree with Elizabeth – we are in a period of transition away from the old “contract” to a new set of relationships. I can only speak from my own experience in white collar businesses. “Loyalty” is never that deep between employee and employer these days. That’s just the way it works now.

    I do think that loyalty manifests itself two ways – to the individual and to the company. I have always had a tremendous loyalty to the people who hired me and gave me opportunities. (Yes, I am old-school that way). The next generation doesn’t have that in the same way. There is respect but there is also a unabashed lack of loyalty. But it’s open and honest – they wear their self-interest on their sleeve as perhaps they should.

    There is also loyalty to the organization. That seems to be what we are talking about. What can increase loyalty?

    Openness and transparency. Yes, I know those words have become buzzwords losing some of their significance along the way. They still have power (as practice not just words). If a company can talk about the business issues they are wrestling with employees they will win respect from some. The more employees understand the business, the more they will respect solid management.

    Depending on the business type, of course, it also helps if businesses think about star players (and all employees, if possible) in terms of talent management. How can they nurture and grow talent increasing their value to themsleves and to the company. Do companies risk raising talent for competitors? Possibly, but if we own up to the fact that this generation is the free agent work force we might implement new ways to keep them fulfilled. After all it’s not all about money. “Fulfillment” factors in huge in employee satisfaction and is a gate towards loyalty.

  4. Byron Reimus

    Would a wonderful exchange of postings on a topic near and dear to me. Count me among those in the #1 camp. How many of us have been disappointed in an invidual or felt alienated from a group because they somehow let us down–only to rekindle that loyalty based on one experience that changed our views? I think we have all been taught that loyalty–not unlike reputation or much of anything else of lasting value in life–is something that we must earn every single day and be reciprocated. In my experience, there is nothing that can replace loyalty and that’s at least in part I think because it appears to be more rare than ever in the “every man for himself” world we seem to live in. I am reminded of this every day in a host of ways as the parent of a teenager growing up in a hyper-competitive “be a winner or you will be a loser” world. Very scary stuff indeed but scarier even more when they look around them and see few examples of people doing what they said they would do and then taking the responsibility when they fell short or worse. I do not agree that the next generation or two of folks entering the workplace somehow value loyalty less than we did in the past. In fact, I see examples of quite the opposite: a determination to once again prize the loyalty that many believe the last two or three generations of leaders have largely forsaken. We are not seen by many of them as really practicing what we preach.

    I agree that far too many people in the workplace feel powerless, isolated and even hopeless. But to me, alot of this comes down less to openness, transparency and even communication, and more to accountability. The old checks and balances seem out of whack. One poll after another in recent years has shown that people no longer believe the buck stops anywhere. If we continue to see daily examples of people who are not held to account for their actions or lack thereof, loyalty evaporates. All the communication in the world can’t change that–only behavior can.

    I think that’s what we’re just beginning to see at H-P, for instance, where loyalty was a cornerstone for years. Conventional wisdom has it that they lost a lot of employee loyalty due to layoffs, pay freezes, etc. But talk to enough current/former workers and what you hear over and over again is that many would have taken a pay cut for “the old H-P” because everyone carried their fair share of the weight back then, from management on down. When that stopped being the case, loyalty went out the door.

    I believe that just about any organization that connects these dots and walks the talk can reclaim employee loyalty in relatively short order. Naive? Maybe. But I think (hope) we’re going to see more companies and senior managers over the next few years onmce again go with their gut instincts, ignore the conventional wisdom and research, and practice what they preach.

  5. Ray Jordan

    Thank you for the robust, deeply thoughtful discussion on this topic. I don’t know that we’ve ever had such a publicly-accessible communications environment before — where follow-on dialogue so significantly exceeds insights from original work. “The people formerly known as the audience.” Remarkable.

    My one, small, added notion at this point is that “responsibility” plays some part in all this too. I see responsibility not just in terms of personal accountability for actions, but more broadly as a true sense of positive obligation for those beyond oneself. That deeply felt responsibility, from leaders of any organization to customers, employees and the like, is a fundamental prerequisite to loyalty, it would seem. In time, I’ll try to pull my thoughts together a bit more coherently on this.

  6. Bill Price

    John Bell’s discussion of “individual loyalty” may provide a glimmer of hope for this conundrum.

    The old adage is that people don’t leave companies, they leave bosses — and the inverse also proves true. People will often remain loyal to managers who have treated them well despite a company’s issues and misfortunes. If managers treat their people fairly in terms of compensation, development, recognition, challenging work and work/life balance, then they can forge a very strong bond and team that will benefit the organization.

    The best companies develop and reward those types of leaders in their organizations and weed out the other ones. That is how companies can replace the corporate loyalty and social contract that has been undermined over the last twenty years. They must develop a network of these individual leaders and personal loyalties based on deeds and actions because the era of blanket loyalty to a “benevolent” company has been irreparably damaged.

    A very interesting challenge, indeed.

    One avenue that might be considered is that of

  7. Ray Jordan

    Gently coaxing Bill P to finish the thought: “One avenue that might be considered is that of…”

  8. Bill Price

    It was actually an “orphan” edit left at the bottom of my posting…

    But with your coaxing I would add … “One avenue that might be considered” is that business leaders have to make a commitment — real time, real thought, real effort — to building those relationships and loyalties with their teams in the absence of corporate loyalty and bonds that are strained.

    I enjoyed a “cork” moment (to reference your most current posting) when a business leader in my former company reminded a group of executives that it was our JOB to develop talent (both ours and our team’s); spend real time on the “soft stuff,” which is often very hard; and block time out of our offices, out of our meetings, off our conference calls, and work “with” and “on” our people. She was a terrific leader and left me thinking very differently about my responsibilities. And she followed up to make sure we were all doing it, too.

  9. Hello.

    Nice site design. Okay, I need your advice.
    So, I wanna make personal site, and I am looking for site template.
    Can you suggest some online place or other resource where I can find many site templates?

    It would be better if it will be free:)
    I think many of us have personal sites, do you design it yourself?

    Thanks, Bill.

  10. Ray Jordan

    Hi.
    I’ve used templates from two locations:
    wordpress.com and blogger.com
    Each has upsides and downsides. Try a test blog on each.

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