When the reputation consultant says “by the time I’m through with you, you’re going to be admired like Warren Buffett,” you better grab your wallet. In reality, a chief executive has control over very few of the variables of corporate reputation.
Arizona State University’s Thunderbird School of Global Management has released its “Most Admired Companies” survey, revealing that most of the things companies do to improve reputation are mere ‘entries’ in a giant log called the reputation database. As new entries come on stream, old ones are forgotten, and because the audience is wired into so many data streams, there is limited bandwidth for changing perception. That explains why companies fall into a corporate version of Newton’s Law, which says companies that get in trouble tend to stay in trouble.
But is there a magic elixir that can improve or change corporate reputation, I asked? In the course of my fieldwork, as it turned out, the primary reason people admired companies (80%) became apparent. The quality of leadership trumped all other factors combined.
In addition to my role as Editor-at-Large for Chief Executive magazine, I spend most of my hours as a professor of business for ASU’s Thunderbird School of Global Management. When I was looking around for a way to demonstrate the challenges of business volatility, I decided corporate reputation was an excellent place to start and launched Thunderbird Opinions, which could help reveal the importance of leadership in business. And what better platform to talk about it than Chief Executive magazine.
• Our goal was to measure admiration across the Global 500 by global business executives. (See our methodology )
• Our rating system is called GlobalRank™ and rates companies according to the percentage of admires vs. non-admire votes. A company that is admired by everyone gets a 100% rating, and one with a mix of half and half gets 50%.
• Admiration is a leading indicator of customer outcomes: high admiration predicts customer growth, whereas a low rating suggests a potential for customer defection.
Key Highlights (for complete findings click here)
• Apple is the #1 most admired company in America with 92% GlobalRank™ rating.
• American Express, Boeing, and 3M (89%) are second most admired in America.
• The highest level of admiration (100%) for a company in its own country is for Huawei and Alibaba in China.
• Kaspersky Labs (Russia) at 93%, Lego of Denmark at (92%), and Toyota of Japan (92%) are the next most admired.
• The most admired company in France is L’Oréal at 80%.
• In India, Wipro (89%) is rated the most admired company.
• Ferrari (86%) is the most admired Italian company.
• In Germany, SAP is rated the most admired company at 81%.
• Zara is rated the most admired company in Spain at 80% and is the most admired retailer in the world.
• LG (71%) is rated the most admired company in South Korea.
• In Canada, RBC (56%) is rated the most admired company.
QUALITIES: what people admire about a company.
OUTCOMES: how people respond to a company they admire.