While Cameron Diaz fairly called the hacking a “major violation” and Emma Watson noted that the reaction to the leaked photos has been even more disturbing, Kim Kardashian zeroed in on another important point. “I think it’s a big wake up call for people to make sure they have every privacy setting,” she told the BBC.
Steps to safety
Navigating the online world is part of our everyday lives, but the terrain can still be treacherous.
Despite the unwelcome attention, hacking victim Jennifer Lawrence has managed set a great example. By confronting the issue head-on, “she turned what could have been a minor embarrassment into marketing gold, reinforcing her own celebrity-brand values and differentiation,” writes Wall Street Journal columnist Gregory J. Millman.
Many tech companies have been reluctant to restrict questionable content such as the recently leaked photos (because of both free speech concerns and the valuable traffic they can bring), but there are signs of potential change. “Twitter, YouTube and others may ultimately decide to take a more active approach to policing user-generated content,” observes the New York Times’ Mike Isaac, and Facebook just introduced a new “Privacy Checkup” feature to help users manage what they share and with whom. Such steps might help, but for now the forecast for online privacy remains the same: cloudy with a chance of embarrassment.
Whole Foods’ distinct—and even radical—approach to reputation management has been key to its success. Will that approach continue to work? We revisited our original case study about Whole Foods and analyzed the company’s online presence.
In January 2013, the Harvard Business Review Press published “Conscious Capitalism: Liberating the Heroic Spirit of Business,” a book examining Whole Foods founder John Mackey’s philosophy and the central role it has played in the grocery chain’s distinct reputation and success. Business management expert Steve Denning also explores the implications of that philosophy in an in-depth Forbes article, but in practice it has involved a very active and innovative approach to reputation management.
While the organic food market continues to grow, Whole Foods has faced reduced earnings and threats from new competition. But the company has succeeded in creating a powerful reputation, and a strong online presence that reflects a large and loyal customer base. The foundations it has laid through effective reputation management, both online and off-, should see it through this difficult period.
Building a unique brand
The central component of Whole Foods’ reputation has been its professed commitment to a “higher purpose.” That is reflected in factors ranging from the company’s longstanding “Declaration of Interdependence” to its ban on unsustainable seafood. One early and important way the company established its reputation was by providing customers with “information and narrative, along with the food.” “It told stories about where the food came from, putting up displays by the seafood counter with photographs and descriptions of the real fishermen who had caught it all,” Nick Paumgarten wrote in his 2010 New Yorker profile of Mackey. Paumgarten also cited the company’s decentralized management structure as a “key contributor to Whole Foods’ success, and to its reputation and self-image as a progressive business,” pointing out that the “high degree of autonomy” of regional divisions and individual stores has fostered “creativity and a sense of ownership.”
The manner in which Whole Foods maintains its core ideals throughout its operations helps explain its strong reputation.
In the New Yorker profile, CEO of dairy company Stonyfield Gary Hirshberg described Mackey as Whole Food’s “greatest asset but also, at times, its greatest challenge.” Mackey’s perspective, principles and personality have been the source of the Whole Foods’ guiding philosophy. But a core challenge for the company—and for Mackey—has been adapting and maintaining its reputation. In 2007 an FTC investigation revealed that Mackey had anonymously attacked a competitor in online financial forums prior to Whole Foods’ offer to buy the company. That led to a realization, Mackey told Nick Paumgarten: “If I wanted to continue to do Whole Foods, there couldn’t be any part of my life that was secretive or hidden or that I’d be embarrassed [about] if people found out about it.”
Radical transparency has served whole foods well
Such radical transparency has generally served Whole Foods well, though there are exceptions, such as Mackey’s 2009 Wall Street Journal op-ed criticizing health care reform, which triggered a social media-fueled boycott. The response to that op-ed may have inspired Mackey to more closely examine the expectations that accompany his business’ progressive reputation. According to a Wall Street Journal article from last February, Whole Foods “doesn’t want to be known as the pricey grocery store for well-heeled, organic-food sophisticates.” So it implemented a “price perception” strategy to counter that reputation.
The outcry didn’t, however, move Mackey to recant his opinion on health care. “So many politicians and CEOs get to be sort of boring, because they end up suppressing any individuality to conform to some phony, inauthentic way of being,” he observed in Paumgarten’s profile. “I’d rather be myself.” Whole Foods posted a response statement on Facebook two days after the publication of the Op-Ed. The response qualified Mackey’s opinions in certain ways, but more importantly, it invited readers to post their opinions on the issue—an excellent example of Whole Foods’ effective use of online reputation management. With it, the company provided the forum for the discussion, while moving its focus from Mackey to the basic issue.
Surviving the storm
How will Whole Foods—and its reputation—weather this period of increased competition?
The financial community, for one, is not sure: CNNMoney assistant managing editor Paul R. La Monica recently described Whole Foods’ stock valuation as “rotting away.” Other analysts do not see increased competition from established brands like Walmart as a major threat: “Though increased competition could force Whole Foods to lower its prices … it is probably a stretch to assume that the upscale clientele normally found at an average Whole Foods store is suddenly going to flock to what is widely recognized as one of the sketchiest big-box retail stores in the country,” writes states Ethan A. Huff in Natural News.
Customer’s commitment to the brand reflected on social media
But what about Whole Foods’ customers? You can sense their commitment to the brand by visiting Whole Foods’ pages on Facebook (1.5 million likes); Twitter (3.72 million followers), Instagram (200,000 followers), Pinterest (191,564 followers) and Google + (60,000+ followers). As with any company’s social media platforms, you can glean insight its business from the nature of customer complaints as well as how they are handled. Nonetheless, one should assume that the most aggressive rants have probably been moved to some digital planet far away, however justified they may be.
Much is reported about the reputations of companies, but to get a balanced sense of consumer sentiment, clear your browser’s history, Google “Whole Foods” and skim the first five pages of results. Then run a comparison check of its competitors – and check out the quality and content of their social media platforms. This is an excellent way to gauge management style and how consumers regard a company.
It is clear that Whole Foods has succeeded in managing its reputation with its consumers, and that its image as a leader in the organic food market remains on firm foundations. As long as it has that strong reputation — its most valuable asset — the company will survive.
“Twitter is an opportunity. Facebook is an opportunity. To say what you feel. To try to pick people up. To try to be positive. To try to add something to society. To let people see you transparently. You cannot be defined if you’re on social media by someone else. You will define who you are, and if you’re negative, that’s your fault. But here is who you are. If you are negative, it will come through. Five years of being on twitter and facebook, are you gonna lie for five years? You are who you are. But we’re trying to tell those kids, you build your brand or you break your brand down. You are who you are through social media.”
A Master at Online Reputation Management
With NCAA violations blemishing his past success at UMass and Memphis, and critics accusing him of exploiting the NBA’s “one-and-done” rule to win his first national title in 2012 and lead the Wildcats to this year’s final, Calipari has certainly had his share of controversy. Through that, it’s been clear that he is shrewd and effective at managing his online reputation.
Since joining Twitter in 2009 (right around when he took over at Kentucky), Calipari has averaged 4.6 tweets per day, according to his account’s statistics on Socialbakers. “I give out information, I’m transparent to our fans,” he explained on ESPN Radio’s Mike and Mike. “I tell them how I’m feeling.” He gets help from CoachCal.com editor Eric Lindsey, who “oversees Coach Calipari’s social media platforms.”
Adept at Using Social Media to Build His Brand
Such candor has helped earn Calipari praise as “NCAA’s last honest man,” but it’s not the only aspect of online reputation management that he’s been adept at harnessing. He also recognizes how celebrity can bolster his brand and recruiting power, as he demonstrated while attending his friend Jay-Z’s concert at Barclay’s Center in 2012. “Calipari didn’t hesitate when it came to letting his 1.2 million Twitter followers know about his backstage pass to the concert, tweeting out this picture of himself in front of the stage,” Rob Dauster observed in a Sports Illustrated piece.
Even Calipari’s comments about social media above seem to be part of “selling his program,” as Dauster points out in a recent NBC Sports article. Calipari understands that the premier young players that are key to Kentucky’s success view social media not as a “waste of time,” as Pitino argued, but as a normal part of everyday life—and something they’ll need to know when they make it to the NBA.
General Motors is using social media to manage customer complaints and its reputation — and using it well. How they are applying social media management is a good case study for other companies in crisis. (The Detroit auto manufacturer has recalled 1.6 million cars and faces roiling legal issues after top management hid defects that caused deaths for 10 years or longer.)
– GM’s Facebook page. In addition to hosting GM-produced content, it is also an open forum where customers can post comments and complaints. GM staffers are engaging them in real time with assistance and responses.
– @GM on Twitter. Frustrated customers who have spent an hour or more on the phone with GM customer service representatives have turned to Twitter to seek help – and found it in minutes.
“G.M. has a team of about 20 people based in Detroit that manages its social media presence — including monitoring about 100 independent auto forums — and responds to inquiries and complaints seven days a week,” reports Goel.
In addition to managing the crisis using traditional methods – including letters to car owners – GM created a video with CEO Mary Barra to keep customers and employees abreast of how the company is managing the situation.
As more companies use social media to better manage customer relations, they can learn from GM’s example.
Mark Zuckerberg’s recent entry onto the national political stage, which culminated earlier this month with his first public speech on immigration reform, highlights how many of the key tools in online reputation management can be part of a strategic approach to political involvement and activism. (Strategic political involvement is also often an essential aspect of reputation management.)
Silicon Valley’s elite includes political donors from across the political spectrum. Top tech companies like Twitter are forming PACs and hiring lobbyists. But with his leading role in FWD.us, an immigration reform lobbying group that he launched earlier this year with longtime friend Joe Green, Zuckerberg has taken a step further into the political realm. He “is building a new social network, and this time it’s political,” Jennifer Martinez declared in a recent article for The Hill. Zuckerberg “is using his clout as a top business executive and American success story to advocate for comprehensive immigration reform.” With the right approach, Zuckerberg has the opportunity to repeat the success of Facebook with FWD.us, and build a network that will harness significant political influence. After all, the majority of the public now conducts their research online – and makes significant types of political donations online.
Difficult terrain
Unlike building a friend-based social network, however, that task requires navigating a perilous and intensely divided political landscape. FWD.us didn’t make it far before stumbling. Just a few weeks after its formation, the group faced backlash for ads supporting politicians such as Lindsay Graham and Mark Begich and lost a couple of high-profile members, including influential entrepreneur Elon Musk. In the future, FWD.us might be able to avoid such problems by hewing closer to Zuckerberg’s other political activities. By donating to both New Jersey Governor Chris Christie and Newark Mayor and Senate candidate Cory Booker, he was recently able to prevent himself from being pigeonholed or harshly criticized for a more partisan stance.
In his New Yorker essay, Robert Packard skewers Silicon Valley for “solving all the problems of being twenty years old,” rather than looking at bigger-picture solutions. IN that vein, FWD.us has been criticized for wanting to do “little more than securing more coveted H1-B visas, essentially granting an influx of foreign, skilled technology workers to fill the Valley’s talent shortage.” Zuckerberg wisely addressed that point in his speech. “We talk about high-skilled H1-Bs and full comprehensive immigration reform as if they are two separate issues,” he said. “But anyone who knows immigration knows that they’re not.” He described the goals of FWD.us in more detail in a Washington Post piece back in April, and being more vocal about those issues in the future could help the group rise above the political fray. While Zuckerberg and FWD.us can undoubtedly cultivate a powerful political network in support of immigration reform, Elon Musk offered some valuable advice when he left the group: “I have spent a lot of time fighting far larger lobbying organizations in D.C. and believe that the right way to win on a cause is to argue the merits of that cause.”
Parker’s history as a Silicon Valley pioneer makes his perspective on Internet privacy particularly notable. The Internet and social media have “helped foment revolutions, overturn governments, and give otherwise invisible people a voice,” he says, but they have also been “used to extend the impact of real-world bullying” and “form massive digital lynch mobs.” In such a climate, Parker asserts, “we are all at risk of becoming ‘public figures’ in a world where the media has expanded to include nearly everyone.”
New problems, new solutions
It’s clear that a truly sufficient solution will require our lawmakers to step up and take action. And Parker has some suggestions:
“In particular, we need to consider stronger privacy laws here in the U.S., a basic right to privacy along the lines of the laws enjoyed by the citizens of most Western European nations … In such a world, our defamation laws need to be updated to provide individuals with the protection from public persecution that they deserve. We also need to reinforce our personal privacy by beefing up the intellectual property laws that govern the personal content that we generate and share via services like Facebook.”
Legal frameworks for dealing with digital media are outdated
“It’s increasingly clear that our legal frameworks for dealing with these new mediums are outmoded at best,” Parker says. Recent revelations about the NSA’s surveillance and data collection programs have underscored the inadequacy of current laws. The gap continues to grow. “Every looming technological breakthrough, from Google Glass to driverless cars promises to make our every move and download a little easier to track,” New York Times columnist Ross Douthat wrote last month. This trend applies not only to government surveillance, but also the kind of every-citizen and “blogging for dollars” journalism that Parker is troubled by.
Significant legislative changes needed
While it may seem futile to try to keep our privacy from being swept away by such powerful currents, The Atlantic’s Conor Friedersdorf argues that there is hope. “Americans facing even longer odds have succeeded before in bringing about social or legal change, and even in amending our founding document,” he writes. “At some point in time everyone, whether they engage actively with these new mediums or not, will experience a violation of their privacy, will find their reputation besmirched publicly, and may even find their sanity challenged,” Parker predicts in his TechCrunch post. He will likely be right—unless we find the will to enact significant legislative changes.
This week the Securities and Exchange Commission ruled that “postings on sites such as Facebook and Twitter are just as good as news releases and company websites.” Some companies, like Dell and eBay, already use Twitter in conjunction with more traditional methods to deliver news and updates to investors, but the SEC’s decision could be a game changer for corporate communications and the ways in which shareholders get investment information.
Driving a Potential Surge in Business Communication
“With this news companies are likely to communicate more via social media and encourage investors to follow them on these new platforms,” says CNBC’s Julia Boorstin. “This could drive a surge in business communication and activity.” Jeff Corbin, author of Investor Relations: The Art of Communicating Value, told Boorstin that the SEC’s decision highlights “the importance of channels such as Facebook and Twitter to the way average individuals now communicate,” and Howard Lindzon, founder of Stocktwits, echoed that sentiment. “A press release on Yahoo finance—who reads that anymore?” he told Reuters’ Emily Stephenson. “You’re going to read news on your Facebook stream, your Twitter stream. The industry is changing, and it was a matter of time before it was going to be regulated.”
Implications of the Ruling
Content strategist Ryan Northover explored the impact it could have on the social media landscape for Social Media Today: “It means platforms like Twitter and Facebook will become networks where literally trillions of dollars in investment decisions will be made, beyond the trading desks and Bloomberg terminals of millions of money players across the world.” It’s impossible to predict the exact effects that the ruling will have, but companies would be wise to follow the SEC’s lead. With the right resources, strategies and content, social media may very quickly become the key way companies connect with shareholders. Many shareholders will become late adapters to social media; more companies will need social media managers; and more mainstream communication platforms will become less dominant.
