Lego is an ‘all-star’ when it comes to reputation: The RepTrak Company CEO
Kylie Wright-Ford, The RepTrak Company CEO, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss the global ranking of companies with the best reputation.
ALEXIS CHRISTOFOROUS: Welcome back. Throughout the pandemic, a number of large companies have risen to the occasion, holding true to the mantra never let a good crisis go to waste. The RepTrak company is out with its 2021 reputation ranking of the top 100 global companies. And joining us now is Kylie Wright-Ford, CEO of the RepTrak company. So Kylie, before we get to the top 10-- and there may be some surprises in there for some folks-- tell us, what were the primary drivers of the company's reputation in the eyes of the public?
KYLIE WRIGHT-FORD: Thank you for having me today. So I'm Kylie. Thank you for acknowledging this study that we have just released for the 11th year in a row around reputation. And what we do is we look at the universe of companies that are doing very well across many countries. And what we've found is, actually, that citizenship and governance are the key drivers of the improvements in reputation this year. It was harder than ever to get in the top 100, as reputations soared as trust and positive feeling about companies improved.
KRISTIN MYERS: So Kylie, I'm looking at the list right now. I'm seeing that The Lego Group is in that top spot, number one. What did The Lego Group do to clinch that position?
KYLIE WRIGHT-FORD: They certainly are, and they're no stranger to being in the top 100, let alone the top 10. Lego does a really nice job on all seven drivers of reputation. Let me back up for a moment and define reputation in our parlance, and it's been our life's work to define and quantify reputation. So we have a scale from zero to 100, and we rate companies.
There are seven drivers. They include factors like citizenship and governance, that I just mentioned. Those two are really important this year, and Lego does a nice job on those. Products and services is, of course, a driver of reputation, but it's often less than 20% in most industries. So the other 80% of your reputation, which is how much people trust, admire, and respect you as a company, is driven by these other factors. They include leadership and innovation, also.
So Lego does a nice job on all of them. It also does a really nice job of being able to perform well across more than 15 geographies that we measure. That is unusual. Many companies have a weak spot, in terms of a geography or a driver, which drags them down, whereas Lego does a nice job across all. It's an all-star when it comes to reputation.
ALEXIS CHRISTOFOROUS: So we saw that graphic just a moment ago showing some of the top companies when it comes to reputation. Rolex was number two, Ferrari three, Bosch, Harley Davidson. You've also got Disney and Microsoft on that list. But I want to talk about companies that perhaps fell a few notches during the pandemic in the eyes of the public. Can you tell us, were there any companies that were in the top 10 in prior years and were kicked out this past year?
KYLIE WRIGHT-FORD: Sure. And before I do, I will say that it was harder than ever to actually get into the top 10. So there's that. We have seen a major rise since 2015 in the difficulty of getting into the top scores. But the companies that did fall back in ratings still rated very highly. One I will point out is Barilla, Italian company, and they do a really nice job. And they just fell outside and came in at number 11, I believe. But that means they still rose in reputation.
And one of the things they did really well is they're really good at telling their story in a relevant way, and especially with their media. So they talk a lot about diversity and inclusion. They talk a lot about what they do well for their communities, as well as their products and services. The mistake many companies make is to focus on financial performance or products and services in too much volume instead of focusing on the things that matter to the public, and the public here was a big stakeholder. They also do really nicely on ESG. And the public, in this study, gave a resounding message of while we're making progress on ESG, we still have a lot of work to do.
KRISTIN MYERS: Kylie, are there generational differences, in terms of, perhaps, how important corporate reputation might be, or perhaps even the criteria that make up that reputable company?
KYLIE WRIGHT-FORD: There is certainly a difference. There's a difference across industry, geography, time, and generation. And one of the things that we tell the companies that we speak to about reputation is it's a means to an end. So let's back up and talk about the difference between brand and reputation, which is the most common question I get asked. So your brand is the promise you make to the world, and your reputation is the ultimate consequence of whether you kept that promise on the seven drivers that I referenced before. And citizenship and governance have proven to be increasingly important to your reputation.
And so when it comes to generational differences, take millennials, for example. One of the things you want millennials to do is say good things about you so that you're more able to get people to buy from you, work for you, and invest in you. They are more likely-- 1.8 times more likely-- to say something good about a company if you have a good ESG track record. So the way you conduct yourself on positive impact on society and environment is very important.
One more finding just on ESG is that companies are doing quite a nice job on the S, on this social piece. They really need to pick up the pace on being open and transparent, ethical in business, fair, and also in the idea that they protect the climate. That is not slowing down anytime soon.
ALEXIS CHRISTOFOROUS: And Kylie, I saw that, once again, banks and financial institutions had the dubious distinction of being dead last when it came to an industry that people felt really good about. Could you talk to us more about that, and what might they be able to do to change that in the eyes of the public?
KYLIE WRIGHT-FORD: Yes, you point out the industry differences. And while that is true about banks, we have studied their reputation for more than 16 years now. And I can say that overall, the category is doing much better than they have historically. They really had a tough time post financial meltdown in getting trust and benefit of the doubt. The reason that trust and benefit of the doubt, as the outcomes of your good or bad reputation, matter is because it gives you a buffer in a crisis.
So while banks are still struggling, their governance is the place they need to win. They need to prove, they need to do, they need to say when it comes to open and transparent behavior, when it comes to ethics and being fair in business. There was some great stories in there. ING does really nicely on this dimension across the 15 countries, and there are some rising stars in banking. So I'm very hopeful that we'll continue to see that rise.
On other sectors, obviously, pharma benefited greatly from being in the spotlight on the S in the ESG. And just generally, their reputation rose to eighth overall. And it was really nice to see pharma companies getting some of the benefit of the doubt. The places they did really well were on citizenship and governance, and so that was great to see.
There are also regional differences for pharma. North America gets less high ratings than EMEA does, and so that's another place where they can work. But there's some wonderful stories in there-- Sanofi and Novo Nordisk and many to draw great case studies from.
ALEXIS CHRISTOFOROUS: All right, definitely something to bounce off of and hopefully continue to grow. Kylie Wright-Ford, CEO of the RepTrak company, thanks for being with us.