In "Why RIM Lost Its Crew, Its Groove" (6 April), Richard S. Levick explains that the failure over at Research in Motion was due, in part, to their failure to engage their customers and understand their needs. Richard, who will be participating Friday 13 April in the Society's Mission Intangible Monthly Briefing on protecting reputation, knows his stuff. He contrasts RIM with Apple and Google, who may be no better at technology than RIM, but who are very good at understanding how their customers want to experience technology. Social media get a nod as being powerful enablers of engagement. We concur.

There's more to the story. Nokia, the European contender, doesn't even get an honorable mention.  Huygens is not expert at social media, but Huygens can measure reputation, and reputation in the technology sector is very sensitive to how stakeholder's perceive a firm for its innovation prowess. Having a big tent and ample data, we thought we would revisit Nokia after 14 months and see how they have evolved from a quantitative perspective. The trend is not promising if you are an equity investor.



Notwithstanding a few spikes above the median over the past year, and cutting to the chase, the bottom color chart shows in blue that Nokia's reputation ranking has sunk to a new low - the 13th percentile - among the 76 firms in the Telecommunications Equipment peer group. Its return on equity has followed a similarly dismal curve, in yellow, under performing the median of its peer group by 20%.

The upper charts provide more detail. Relative to its peer group, as reported in the chart labeled Vital Signs, Nokia's reputation has been all year long  -- up to last week -- exceptionally volatile ranking in the high 90th percentiles. The parity of current vs. historical volatility, and how that looks relative to Nokia's peers, is shown at top right.

While the trending is negative, it is not a stable trend. The Vital Signs report that reputational stability is in the 11th percentile while the middle charts show that the return on equity at the 26th percentile. This is high for the reputation ranking, all other things being equal. This could be viewed as either very good news, or bad news, depending on whether Nokia's price is felt to be ahead or behind its reputational metrics. So either a surprise rise, or another disappointing fall are just around the corner.

Hint: The RepuStars Variety Composite Equity Index calculated by Dow Jones Indexes is based on the thesis that although reputational value is usually fairly embedded in stock price, there are are arbitrage opportunities that can be exposed with reputational metrics. If we had to bet based on the above, we'd short NOK and predict the prices will drop from the 26th percentile to one closer to the rank's 13th percentile.