How Work Culture Impacts Brand Reputation

Work culture has been defined as “the interactions of all employees which in the aggregate creates a picture of how things get done and what matters inside the organization” (Gebler 2017). Culture, at a point, intersects with brand reputation in that it can be considered two sides of the same coin. Reputation comes from the external belief of your company behavior, while culture is how people inside your company behave and reaffirm those beliefs.

Earlier this month, we held a thought-provoking session that explored how work culture and impacts brand reputation, specifically exploring the conversation from the perspective of academics and business leaders.

Session presenters included:

  • David Gebler, of Indiggo, Washington, DC has over twenty years’ experience working with global organizations on how to reduce people based risks while improving productivity and corporate reputation. Named as one of America’s top Thought Leaders in Trustworthy Business Behavior.
  • Dennis Hirsch, Professor of Law and Director of the Program on Data and Governance at The Ohio State University. In 2010, he served as a Fulbright Senior Professor at the University of Amsterdam where he produced a leading study on Collaborative Dutch data protection regulation.
  • Bob Bowman, Director Risk Management, The Wendy’s Corporation. Bob has a diverse risk management background with Macy’s for many years and since 2014 with Wendy’s. Bob’s background and responsibility include enterprise risk, business continuity, data and privacy risk management.
  • Lowell (Chip) Howard, Jr., Honda North America, Inc. Chip is General Counsel- Manufacturing at Honda North America and has responsibility for HNA Law Division’s offices in Ohio, Alabama, Indiana and South Carolina.

At its core, culture and brand reputation have effective leaders and leadership as an underlying foundational element.  From that core, effective leaders develop engaged employees who develop loyal customers.

The impact of Big Data on culture and brand reputation begins with what Professor Hirsch refers to as the Three V’s: volume, velocity and variety.  The fourth attribute is correlation.  The use of big data can bring great benefit, but also significant risk to a brand. A now classic example is when Target figured out that a teen girl was pregnant before her father did.

The Target Example

Target assigns every customer a Guest ID number, tied to their credit card, name, or email address that becomes a bucket that stores a history of everything they’ve bought and any demographic information Target has collected from them or bought from other sources. (Forbes) Target then uses this data to create highly personalized marketing materials.

In the case with the pregnant teen, she received a mailer containing only advertisements for baby products. Her father saw the mailer and become enraged, as he thought that Target was encouraging her to become a teen mother. After some back and forth with his local Target’s management, where Target apologized for the error, the father returned to the store and informed management that his daughter was indeed expecting.

Target and many other companies continue to utilize big data in order to generate a customized consumer experience. But now, in order to mitigate the risk of revealing consumer secrets and just generally spooking people, Target incorporates those customized advertisements in with the regular circulars.

Big data certainly has massive benefits for companies and the consumer when applied thoughtfully and strategically, but can create headaches for brands when used too liberally.

Thinking Practically

Bob Bowman and Chip Howard engaged the audience in discussion about how their respective companies leverage positive company culture towards a positive brand image.

At Wendy’s, culture and values are everything, going all the way back to Dave Thomas, the company’s founder. Bowman expounded on some of the trials Wendy’s have been through over the years — from fingers in chili to viral Frosty videos — and how Wendy’s leveraged its brand equity and relied on culture to see them through varying crises.

Values inform culture at Honda too, in the form of the three joys — the joy of buying, the joy of selling, and the joy of creating — and respect for the individual. Howard explained to participants that every Honda employee are encouraged to “find their Honda joy” because Honda believes that when associates work towards their own happiness first, the company will grow as a result.

Takeaways

  • Brand reputation and company culture are two sides of the same coin.
  • Effective leaders develop engaged employees which ultimately lead to loyal customers. At the core is effective leadership.
  • In managing big data and big data analytics risk, we must be careful to consider the potential impacts of the data, the correlation of the data, how that data could profile and what predictions can be made using the data.
  • Significant benefit can exist from the big data analytics. Risks, however, are present to include privacy violation, legal and regulatory, as well as the consequential brand and values impact.
  • Wendy’s core belief is that their success is based on the relationship with the customer. The foundation is food, which relationship is enhanced or eroded by behavior and trust is earned when both are delivered in a predictable consistent manner.
  • The Honda philosophy is built on a foundation of respect for the individual. From that fundamental belief, they believe that;
    • Initiative — Associates should not be bound by preconceived ideas.
    • Equality — Recognize and respect individual differences in one another and treat each other fairly.
    • Trust — The associate relationship should be based on mutual trust.

The Risk Institute at The Ohio State University’s Fisher College of Business exists to bridge the gap between academia and corporate America. By combining the latest research with the real-world expertise of America’s most forward-thinking companies, the Risk Institute isn’t just reporting risk management’s current trends — it’s creating tomorrow’s best practices.

Governance and culture take center stage at The Risk Institute’s Annual Conference

Conversation surrounding governance and culture recently took center stage at The Ohio State University Fisher College of Business, as The Risk Institute explored the impacts of the two key aspects of business at its Annual Conference. The two-day conference brought together Risk Institute members, business leaders, experts and faculty thought leaders from Fisher for an in-depth examination of the risk management and strategic implications of governance and culture.

Phil Renaud and Jeni Britton Bauer of Jeni's Splendid Ice Creams discuss maintaining culture through crisis.

Phil Renaud and Jeni Britton Bauer of Jeni’s Splendid Ice Creams discuss maintaining culture through crisis.

Considering the various sides of governance and culture is critical to understanding how to leverage risk management to create value for an organization. The conference featured four keynote speakers, Gordon Bethune, former CEO of Continental Airlines; Cameron Mitchell, founder and CEO of Cameron Mitchell Restaurants; Randall Kroszner, former Governor of the Federal Reserve System; and David Gebler, author of best-selling book The 3 Power Values.

Bethune opened the conference and focused on his experience turning around Continental Airlines over a decade, which is detailed in his book, From Worst to First. He emphasized the importance of building accountability between employees and the organization saying, “What gets measured and rewarded, gets done.”

Mitchell is a self-described serial entrepreneur who understands that taking risks is necessary to be successful in business saying, “I may shoot myself in the foot and walk with a limp, but I’ll never shoot myself in the head and make a fatal mistake.”

Academic Director Isil Erel speaking at Annual Conference 2016.

Academic Director Isil Erel speaking at Annual Conference 2016.

During his time with the Federal Reserve System and as a professor of economics at the University of Chicago, Kroszner never imagined he would be helping guide America’s economy through the worst financial crisis since the Great Depression. He discussed the potential ramifications of the Fed keeping interests rates at historic lows since 2008 saying, “When your short-run policy becomes a long-run policy, you will always run into unintended consequences.”

Named one of America’s top Thought Leaders in Trustworthy Business Behavior, Gebler is an innovator of new approaches that integrate culture, ethics, values and performance. His talk detailed how to know if your organization’s culture is a risk factor utilizing the three power values— integrity, transparency and commitment.

In addition to the keynotes, the third-annual conference brought together business leaders and experts for a series of RISKx presentations and panel discussions on women in risk, governance and culture related to business. The culture discussion explored  employees’ attitudes toward risk, mergers and acquisitions, maintaining culture through crisis, and emerging risks in the energy industry.

The Risk Institute’s Executive Education Series will resume November 15 with a discussion on Political Risk.

 

Risk Modeling: The Past and the Future

Risk Institute Portraits Fisher Hall - Third Floor Feb-02-2016 Photo by Jay LaPrete ©2016 Jay LaPrete

By  Philip S. Renaud II, MS, CPCU
Executive Director, The Risk Institute
The Ohio State University Fisher College of Business

 


No one can foresee the future, but risk managers are tasked with anticipating and using all resources at their disposal to predict what lies ahead. Risk modeling, based on data analytics, is one of the critical tools any risk practitioner can employ. However, like all things, modeling has undergone a transformation in recent years as more data is available upon which to base the models.

With risk modeling playing an increasingly crucial role in risk management, The Risk Institute at The Ohio State University focused its March Executive Education Session on Risk Modeling: The Past and the Future. Over 70 attendees were at the program from 27 companies and universities that gathered for the presentations and insightful Q&A on the topic.IMG_4839 Crop

The half-day session included a three-person panel of experts moderated by The Risk Institute Academic Director, Dr. Isil Erel. The panel was comprised of:

  • Rongsheng Gong, Vice President, Head of Risk Modeling and Analytics, Huntington National Bank
  • Al Schulman, Vice President (retired), Enterprise Risk and Capital Management, Nationwide

The session focused on the essential nature of risk modeling as a risk management tool and its role for both financial and nonfinancial firms. The speaker presentations centered on how risk models have changed as business, regulatory and economic environments have evolved over time. The impact of the recent financial crises was cited numerous times during the discussion as the speakers highlighted how previous risk models created by industry, banking and government failed to identify the magnitude of the risk impact to multiple business sectors.

The trio of presenters went in-depth for session attendees to understand the evolving, complex and at times volatile economic conditions impacting a firm’s markets and operations.IMG_4971 Crop

According to our speakers, five key lessons on effective risk modeling include:

  1. The financial crisis has led to both an increased knowledge of risk models and a decreased confidence in those same models.
  1. Since the crisis, new model considerations include counterparty risk, funding liquidity, regime-switching and government guarantees.
  1. The current system of banks, insurance companies and nations is highly and dynamically connected.
  1. Managing model risk includes multiple levels of validation for every step of its development.
  1. No matter how sophisticated the risk model, the human element is still the most important.

The session emphasized how financial firms since the recession have adapted their risk models to the changing business, economic and regulatory environments. Additionally the speakers focused on the interconnectedness of institutions (banks, insurers and government) and how that plays a vital role in managing how risk is modeled.

The session proved thought-provoking and demonstrated The Risk Institute’s unique role in uniting industry thought leaders, academics and highly respected practitioners in an ongoing dialog to advance the understanding and evolution of risk management. The Risk Institute’s conversation about risk management is open and collaborative with its relevance across all industries and its potential as a tool for competitiveness and growth.


For more information about upcoming events, our students, partners or research, visit our website: fisher.osu.edu/centers/risk.

The Risk You Can’t Avoid – Weather Disruption

minton bernadette 130x195By Professor Bernadette A. Minton
Academic Director and Interim Executive Director, The Risk Institute
Arthur E. Shepard Endowed Professor in Insurance
Professor of Finance
The Ohio State University Fisher College of Business


Weather plays a big role in our economy – from retail to agriculture to transportation, all industries are affected by it in some way or another.

A summer drought in the Midwest can negatively impact the agriculture sector while simultaneously creating a boom in new housing construction. Consumer behavior is also influenced by the weather. Consumers in Phoenix in light rain and 75° react differently than those in Portland, Oregon in similar conditions.

NOAA_Wavewatch_III_Sample_Forecast

Over the recent years, climate variability has been increasing with extreme weather occurrences becoming more normal. Thus, understanding your organization’s vulnerabilities to weather disruptions is important to achieving corporate objectives and creating value.

In the upcoming Risk Institute Executive Education Risk Series, we will explore the risk management and strategic implications of weather disruptions. Our session leaders from The Bryd Polar and Climate Research Center at The Ohio State University and from Analytics and Impact Forecasting Services at Aon Benfield (Aon is a founding member of The Risk Institute) will collaborate to provide executives with insights into how:

  • It is less about the averages and evolving weather trends and more about the increasing extremes in our global and regional weather patterns. The use of recent advances in technology, data collection and data quality has led to new predictive analytics tools to more reliably project the weather risks.
  • These new analytical tools can improve managers’ abilities to better understand their business’ exposures to weather and more effectively manage these risks.

No one can control the weather, but planning for weather disruptions and its impact on your business is vital. If you wish to join us for this timely and thought provoking discussion, there are still seats available for the session.


The Risk Institute Executive Education Series will continue on Nov 12, 2015 with Weather Disruption and Risk Management, a half-day course for executives. For more information, or to sign up for the session, visit FISHER.OSU.EDU/RISK


Data Analytics and Managing the Risk of Demand Uncertainty

by Gregory Sabin – Visiting Lecturer, The Ohio State University Fisher College of Business

A 2012 Supply Chain Insights survey asked supply chain managers to name their top 10 pain points. Three out of four respondents listed demand volatility, which made it one of the most painful aspects of supply chain management, second only tosabin Greg supply chain visibility.  Firms can reduce demand volatility and the associated risks by incorporating economic and demographic data to create simple and more accurate business models.

Risks associated with demand volatility include both risks of overestimating and underestimating demand.  Overestimation of demand will cause declines in the firm’s return on assets (ROA) because of the overcommitment of assets and unnecessary expenditures that will be incurred in anticipation of surplus demand that does not materialize.  Underestimating demand is associated with increased production costs, lower quality levels and decreased customer satisfaction.

These risks affect every part of the business, including customer service, financial planning and analysis, supplier development, new product development, human resource management, product/process engineering and investor relations.  As such, firms need to approach forecasting and planning from a cross-functional perspective.

Why are most businesses not already doing this? As recently as five or six years ago, businesses lacked not only easy access to the detailed information needed to add analytical models to their forecasting process, but also the ability to process that information in a cost-effective manner. Traditionally, this meant firms focused primarily on internal marketing and supply chain information such as distributor estimates, sales projections, product lead times, inventory levels, production capacity and workforce head counts.

Now we are seeing the amount of readily available information exploding in the public domain.  As “big data” and tools to access the information has grown to a point of critical mass, firms cannot only access customer, product and competitor information, but also macroeconomic data that is more detailed and forward-looking than what has been available in the past. Combining this economic data with proprietary firm specific information is creating a new proactive approach to balancing the risk associated with forecasting and demand management.

Early adopters of this new approach are utilizing data-driven analytical tools to enhance the planning and forecasting processes and to give significantly more accurate information to all business units involved in their company’s planning process. The pain associated with demand volatility can be reduced because a firm has armed itself not only with better information, but also with an integrated cross-functional perspective.


The Risk Institute Executive Education Series will continue on April 30, 2015 when Professor Sabin will co-lead a half-day session on Demand Uncertainty, Data Analytics and Risk Management. For more information or to sign up for the session, visit FISHER.OSU.EDU/RISK