During a recent web chat, a journalist asked a Fortune 500 CEO whether the company cared about public sentiment. I was startled. How could there be any doubt that the CEO's company, or any responsible company for that matter, cares deeply about public sentiment and what is now commonly referred to as "Main Street?"
The CEO's response was swift: public sentiment is "very important...maybe it's number one."
Soon after, I read an article in The New York Times about Goldman Sachs facing criticism over executive bonus payouts. "[M]any outsiders might think," noted the Times, "[that] the bank pays little attention to its public image."
Yet according to the Times, "Current and former executives say, Goldman is acutely aware of its diminished public standing."
It would seem then that many Fortune 500 companies are being accused of insensitivity to public opinion, notwithstanding an acute awareness by these companies' executives of its importance. There is a disconnect here that seems to reflect an inability of some companies to successfully communicate in the public domain about what matters to them.
Part of the reason for this disconnect may have to do with the changing nature of corporate reputation. As a reputation expert, I'm often asked to speak to companies, CEOs and at conferences about how reputation management has changed over the decade. I stress to them what any savvy observer already knows, which is that the media is now ever-present, rendering companies completely open to criticism and praise online and offline 24/7.
Perhaps less obvious, however, is a corollary of this explosion in media coverage - an increasingly complex stakeholder landscape. When companies first started worrying about their "images," corporate leaders initially focused predominantly on one stakeholder - Wall Street - and how it viewed their companies. With the advance of technological change and a widening media presence, an ever expanding portfolio of stakeholders in addition to Wall Street arose - employees, customers, media, government, and labor unions. In recent years this portfolio expanded even more. Now leaders have to worry about a new stakeholder breed that include disgruntled employees, bloggers, Twitterers, NGOs, academics, social investors, leakers, retirees, trial lawyers, board members, competitors, and perhaps most significant, Main Street (nee public opinion).
Early on, I used to remind companies not to overlook the "general public," regardless of whether they were a B2B or B2C company. My favorite example was Boeing, the manufacturer of commercial jetliners and military aircraft. I noted that although it was an industrial company making products not likely to be purchased by members of the general public, Boeing could not ignore Main Street. Boeing had to worry, for instance, about its image in Seattle where at the time they were headquartered and where generations of its employees resided. Boeing also needed the public to think favorably of them if they wanted to attract the best engineers, retain top talent, and be given the benefit of the doubt in the event of a strike, public relations flare up or other unfavorable turn of events.
Although the opinion of Main Street was hardly irrelevant in the past, it surely matters a whole lot more today than it ever did before. The Internet provides everyone with access to once closely held information. It affords opportunities, available to anyone, to stir up sentiment over layoffs, executive compensation, employee treatment, poor customer service and unethical executive behavior. Any member of the public may easily root out details about the company behind the brand and decide whether it is a responsible corporate citizen worth supporting.
At one time Wall Street may have been the prime stakeholder, whose opinion carried most weight. Without diminishing the continued importance of Wall Street, a new stakeholder is now on the scene which is as important if not more important. It is Main Street. For this reason, corporate executives must become more attuned to how they are perceived and how they communicate to ordinary people. The disconnect that allows anyone to question whether or not a corporation cares or should care about pubic sentiment, must become a thing of the past.