Reasons and Emotions that Guide Stakeholder s Decisions and Have an Impact on Corporate Reputation

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1 Book Summaries Strategy Documents L16/2015 Reasons and Decisions and Why is it easier to trust certain companies and people rather than others? How can trust be built through our beliefs? How are emotions and logical thinking connected? What areas of the brain are affected at the same time in both hemispheres? In the 21st century, neuroscience agrees with most of the findings of social psychology in the second half of the past century: to be able to trust, first it is necessary to emotionally believe and to have faith and hope in those beliefs, that is to say, we can only trust what we believe. Understanding the link between neural networks and behavioural patterns allow us to see how brand psychology works. As we learn more about something and gain broader experience, our feeling and need of purpose and meaning also increases. According to Jonathan Gabay, British lecturer, expert in Reputation and Communication and author of Psychology, brands make us internalise those beliefs and purpose and enable us to identify with something and feel motivated and united. New relation models s cannot longer depend on traditional marketing and branding strategies. Nowadays, people don t look what a brand does, its benefits, how it makes them feel or how it identifies with them... Today the spotlight is on what brands share with their stakeholders. Things such as design, logos, packaging, contact points, promises, experiences or purposes still are and will be important, but at this time conversations, content, relationships, stories and reputations carry more weight. Gabay says that today, authenticity is the more powerful link between emotional and rational aspects and moves further away from the false and untrustworthy promises we have experienced until now. This document was developed by Corporate Excellence Centre for Reputation Leadership and among other sources contains references to the book Psychology written by Jonathan Gabay, British lecturer and expert in, Reputation and Communication and published by Kogan Page in 2015.

2 Figure 1: From brand features to brand inclusion Features WHAT IT HAS 1900s Benefits WHAT IT DOES 1930s Experience HOW YOU FEEL 1960s ID WHO YOU ARE 2000s Inclusion WHAT WE SHAPE NOW Source: Psychology «Today, neuroscience agrees with social psychology: to be able to rationally trust in something, first you need to emotionally believe in it, have faith and hope» People no longer feel addicted and attached to celebrities, movie stars, athletes and important business people, instead of that, they now feel closer both physical and emotionally to other people like them: employees, friends, colleagues and acquaintances. Gabay claims that this is not only happening in the business or commercial field, actually it also occurs in the personal, professional, cultural or institutional spheres. Jonathan Gabay defends that transparency is another basic element that links emotional and rational aspects by reporting falsehood and dishonest messages, which are not coherent with the behaviours stated. The left hemisphere of the brain The left-brain is in charge of carrying out logic thinking, numbers, writing, and language, this is, the rational elements. Thus, values, rational trust, mission, promises and personal interests (ego) are located in this hemisphere. However, thanks to neuroscience, we know that deductive or rational thinking begins with an idea an emotional belief that has been assumed true. From this idea, that principle that socially has a moral character (we see what we believe), we interpret and judge different situations. The theory of reasoned action, proposed by Azjen and Fishbein within the social psychology field in the 70s and 80s explained something similar. Consequently, abductive reasoning (from a fact to an hypothesis) justifies our actions and ponders commonly accepted behaviours before issuing a specific judgement; while inductive reasoning passes general judgements from particular examples. On the other hand, new behaviours are easily acquired through continuous exposure to new routines and the interpretation of messages depends more on the context where those messages are issued than on what they literally say. Again, context and emotions give meaning to reasons. The right hemisphere of the brain The right side of the brain controls feelings, senses, images or space, this is, it is dominant for emotion. Beliefs, faith, purpose, expectations or public interest (altruism) can be found in this hemisphere. Beliefs are based on a logic premise developed by stories and conversations (that s why storytelling has become so common). Contents show the brand narrative to stakeholders and lead the way to share beliefs and faith by telling stories that are captivating and sustainable over time. But those beliefs need to be supported or opposed by the brand values. There are five values that a brand can give to its consumers or customers, but also employees, shareholders and the rest of stakeholders: 1. Functional: what it does for me or to me. 2. Social: what it does for the rest. 3. Emotional: what feelings it makes me arise. 4. Epistemic: anticipated reward for trying another brand. 5. Conditional: the fulfilment given by living an authentic experience. Individual subconscious and general unconscious mind also play an important role in the right side of the brain, specially, when it comes to evaluations. Both rational elements or judgements (related to introverted functions such as thinking or feeling) and emotional elements or perceptions (related to extroverted functions such as intuition) are highly significant in this regard. Jonathan Gabay uses the theories by psychologist Karl Gustav Jung to explain how we link both sides of the brain when taking decisions and how Book Summaries 2

3 Figure 2: Jung s map of the psyche OUTER WORLD PERSONAL EGO «Emotions control decisions and search the logic reason in the left side of the brain (a logos) that fits with the emotional reason found in the right side (a pathos)» Consciousness Personal Collective our personal subconscious mind is the result of the connection between general unconscious mind and personal ego or personality. It is true that everyone uses introverted and extroverted elements when taking decisions, but the archetypes described by Jung (acquired through the general unconscious mind and expressed in personality) define how we identify ourselves with one specific brand and which elements (thoughts and sensations or feelings and intuitions) are more important in our decisions and in previous perceptions. SELF SHADOW Anima-Animus INNER WORLD Consciousness Personal Collective Source: Psychology motivations). Hence, this is a subjective way to measure self-confidence when achieving the results expected that, at the same time, depend also on other people s actions. For this reason, surpass standard expectations of the competitors and the whole market improves reputation. However, the risk of not being able to reach those expectations or doing it when that level is already assumed as a new standard is high and can be very damaging. Thus, it is important to promote a constant and disruptive innovation in reputation management. After years of experience treating his patients, Jung collected enough empiric information to claim that individual perceptions are essentially irrational and are based on universal or general archetypes that are shared socially and for which there is a prior opinion or default position. Expectation management is particularly important in brand reputation management. Expectations represent how strong a person believes in his or her ability to get emotional rewards (intrinsic motivation) as material rewards (extrinsic The reason can be found at the cingulate cortex Why people do what they do? What guides and establishes our behaviour? By knowing the reason for human mind means, we know the reasons and feelings and understand that the link between both sides guides our expectations, perceptions, attitudes and behaviours. However, the amount of information that brands are storing thanks to the digital world the Big Data or the different algorithms used to analyse Book Summaries 3

4 Figure 3: The cingulate gyrus enables the brain s left and right lobes to perform a wide variety of tasks cingulate gyrus Source: Psychology that information are almost useless if brands ignore their stakeholders expectations or are unable to gain their trust. According to Gabay, human search of common sense goes beyond all the usual questions in political and corporate field that until now insisted on asking what, where, when, how or who. But today, brand reputation and the fact that people believe in and trust a brand depend on the decisions where emotional and rational memories crash. The cingulate cortex, which surrounds and connects both sides of the brain, is responsible of shaping the emotions that process the data related to learning, behaviour or memory and that anticipate perceptions, attitudes and subsequent behaviours. That s why emotions control our decisions and look for a logical reason in the left hemisphere (a logos or argumentation) that is coherent with the emotional reason that they have found previously in the left side (a pathos or emotion). On top of that, everything is supported by an ethos or moral conviction. These three elements are necessary to gain a good reputation as a brand. It is with good reason that Aristotle considered logos, pathos and ethos the essential conditions for a good speech that is, at the same time, a project in itself, a reality. Book Summaries 4

5 Leading by reputation 2015, Corporate Excellence Centre for Reputation Leadership A foundation established by major companies aiming to excel in the management of intangible assets and facilitate promotion of strong brands with a good reputation and a capacity to compete on the global markets. Our objective is to become the driving force, which would lead and consolidate professional reputation management as a strategic asset, fundamental for building value of companies around the world. Disclaimer This document is a property of Corporate Excellence Centre for Reputation Leadership developed with an objective to share business knowledge about management of reputation, brand, communication, public affairs and non-financial metrics. Corporate Excellence Centre for Reputation Leadership is the owner of all rights to the intellectual property related to images, texts, drawings or any other content or elements of this product. Corporate Excellence - Centre for Reputation Leadership is the holder of all necessary permissions for the use of the document and therefore any reproduction, distribution, publishing or modification of the document without its express permission is prohibited.