While no country was spared, the United States was hit particularly hard, and companies have yet to regain the trust of the American people.
“In the U.S., it’s Judgment Day for all companies in the court of public opinion, and there’s no place to hide,” says Stephen Hahn-Griffiths, chief reputation officer of the Reputation Institute, a reputation measurement and management services firm. Since 2007, RI has published the US RepTrak 100, an annual study of corporate reputation in America. This year’s ranking reveals an average 0.8-point increase in the reputation of USRT100 companies, an uptick that barely begins to compensate for the average 3-point decline seen in 2018.
“For the first time in a long time, less than half of the U.S. population trusts corporations—that is core to why reputation didn’t recover much,” says Brad Hecht, senior managing director of the Americas at RI. “Companies haven’t done enough to build trust, that benefit of the doubt that even when no one is looking, they will do the right thing. That is the difference between the U.S. and other countries.”
What isn’t all that different from country to country, however, is what it takes to build reputation, and that all boils down to a balance of corporate responsibility and product innovation. “You have to have a holistic, 360-degree strategy,” Hecht says. “Only companies that do that will continue to build reputation.” By which he means companies like Whirlpool, which climbed 30 spots to claim the No. 3 position on the list—thanks, in part, to the way it’s invested in both American jobs and customer-centric smart appliances—or Barnes & Noble, which despite slipping from No. 4 to No. 6, has established an emotional connection with consumers, capitalizing on bookstore nostalgia to the extent that it recently recorded its best quarterly sales in years—at a time when the obituary of brick-and-mortar has been all but written.
But no business has fared quite as well as Netflix, rising 22 ranks to achieve the No. 1 spot for the first time. While the company hasn’t been without the occasional controversy, a report in the Wall Street Journal going so far as to describe its corporate culture as being “transparent to the point of dysfunctional,” Netflix has positioned itself on the right side of scandal more often than not. Perhaps the best example of this can be seen in the way Netflix navigated its #MeToo moment. After allegations of sexual assault were made against Kevin Spacey, the company found itself at a crossroads: It could carry on, continuing to spotlight one of its biggest stars on one of its biggest series, or it could do the right thing. Netflix chose the latter, and that made all the difference. “Perception of product increased, and emotional attachment with a company that made the right moral decision went up,” Hecht says. “It’s the perfect example of balancing corporate responsibility with product innovation.”
Speaking of product innovation, Netflix hasn’t shied away from reinventing itself. Evolving from DVD deliverer to streaming service to content creator, Netflix produced more than 800 original films and series in 2018 alone, giving subscribers plenty of motivation to choose it over its main competitors, Amazon Prime and Hulu. “It has always been unique, differentiating itself on product,” Hecht says. “Netflix is a perfect foil to companies like Facebook, Google and Amazon.”
While Netflix has soared, most other companies in the technology sector have struggled, even those once regarded as industry darlings. Amazon, after five consecutive years in the top 10, dropped to No. 54, due at least in part to its inability to convince consumers of the fact that it’s a good corporate citizen. “We measure rational drivers and emotional connections,” Hecht says. “Amazon dropped because of its perception as a company: its workplace, governance and leadership, especially Jeff Bezos.” The Amazon CEO has made quite a few headlines as of late, but for tabloid drama, not the sort of thing that might elevate the standing of his company. Also in the news for all the wrong reasons has been Google. In the wake of employee protestsover the company’s handling of sexual misconduct allegations and Google+ data breaches so massive the tech titan discontinued the platform, as well as antitrust fines levied by the EU, the most recent in March 2019 to the tune of $1.7 billion, Google, once regarded as one of the country’s most reputable corporations, has dropped more than 60 spots and out of the top 100 altogether. “Google, the company that once said, ‘Do no evil,’ is having a negative impact on the way the world operates,” Hecht says. “This is reflective of what is happening in the technology industry as a whole.”
And then there’s Facebook. Having begun its fall from grace years ago—accelerated as of late by revelations around password security practices that may have put hundreds of millions of users at risk, data-mining tactics that have led the Department of Housing & Urban Development to sue Facebook for alleged discrimination and, of course, the Cambridge Analytica scandal that isn’t going away—the fact that the social network is nowhere near placing in the top 100 isn’t all that unusual. What is surprising, however, is just how far it’s fallen. Of the 390 businesses eligible for this year’s ranking, just one had a worse reputation: The Trump Organization. “If you can you imagine any company that would have a worse reputation,” Hecht says. “It’s not a great story for Facebook.”
In fact, a great story of corporate responsibility and product innovation might be exactly what these tarnished brands need to successfully recover their reputations. “If you don’t do that, take control of your own narrative, you’re at the mercy of others,” Hecht says. “The most reputable companies are those that have done a good job managing the conversation.”
To determine the list, RI surveyed more than 167,000 individuals from January to February 2019. Companies considered typically have revenue in excess of $1 billion and brand familiarity with at least 30% of the U.S. general population.