The past 18 months have seen organisations’ reputations put through the
ringer. From financial mismanagement to unsustainable, short-term
approaches to strategy, the recession highlighted many companies'
weaknesses and left them open to bad press and plummeting consumer
confidence. In 2010, leaders will need to focus on rebuilding and
repairing the status of their companies with customers, stakeholders,
investors and government. The need to regain trust and confidence in
your organisation with the wider world has never been greater.
Historically, corporate reputation has been the domain of risk managers
and PRs, but it's clear that it is now being put firmly in the hands of
leaders. “Creating and maintaining the reputation and values of a
business is an increasingly key component of the business leader’s job
description. Visibly listening to, as well as educating and informing a
variety of stakeholders shapes reputation. The recent crisis in the
financial services industry highlighted those who paid more importance
to this and the consequence of not doing so,” says
Steve Cooper, Managing Director, Barclays Local Business.
Corporate reputation has traditionally been difficult to define and measure.
Niel Golightly, Vice President, Downstream Communications and Sustainable Development, Shell
offers this explanation: "Corporate reputation is simply the product of
hard work and integrity. It's a result of business leaders getting up
every morning and doing what they say they will do, living up to their
values, respecting the expectations of stakeholders, delivering results
and refusing to hide behind spin and excuses when things go wrong.
Elaborate PR strategies and communications technologies can get the
message to the right people, but the credibility of the message itself
depends on the character of the leaders."
Indeed, despite the seeming ambiguity surrounding reputation management,
Ian Ryder, Deputy Chief Executive, BCS,
believes that building and maintaining reputation is extremely simple.
He says: "Tell the truth (honesty), be open (communicate) and do what
you say (deliver). There are, of course, many so-called 'experts' who
make fortunes out of complicating these simple truths, and
organisations that refuse to believe that they will make or break
reputations!"
It might seem simple but the recession delivered a heavy blow to many
organisations' reputations. For leaders, the key question is how to
regain your standing with customers, and mitigate some of the damage
caused. This is going to be a major challenge, as
Kevin Murray, Chairman, Bell Pottinger
explains: "The recession and events of these past two years have had a
serious and wide-ranging impact on every facet of business life,
especially reputation. Trust is now in very short supply and the bank
of goodwill is heavily overdrawn.
“Companies need to be trustworthy if they are to regain the confidence
of consumers and stakeholders. That means much more authentic
communication and much wiser business decisions. It needs to be led by
CEOs who recognise the need to have an ongoing dialogue with
stakeholders to develop new and different relationships. For CEOs this
is mission critical. They need to invest in more and better
communications and make sure they have reputation in mind with every
decision they make," Kevin continues.
Corporate reputation expert,
Aneysha Pearce, Associate Partner, Prophet,
explains the steps companies should go through if they find themselves
with a damaged reputation. She says: “Rebuilding reputation is a
journey that takes time, leadership commitment and support. Companies
that have been able effectively to repair, build, and/or fortify their
reputations have taken an approach that often follows three key steps:
1) assessing the current state of a reputation across stakeholders to
reveal strengths and weaknesses, 2) developing a reputation strategy to
address prioritised stakeholder gaps and 3) monitoring and measuring
reputation performance among stakeholders on a consistent and on-going
basis.”
As Kevin pointed out, the importance of leadership in such matters
should not be underestimated. The CEO is the personification of the
company and their proactive involvement in building reputation is
paramount.
Julie Clarke, Head of Employee Brand Engagement, Fujitsu Services,
expands on this: “As businesses start to look at how they are going to
manage their way out of the economic downturn, many are starting to pay
more attention to their corporate reputation, and particularly the role
of leadership in this area. Leaders are recognising that they have an
important role to play in managing the organisation’s reputation –
internally and externally. They have a responsibility to ensure that
employees understand the organisation and its customers. Effective
engagement in this area can result in employees becoming great, natural
ambassadors for the organisation.”
If reputation is so strongly tied to leadership, perhaps one of the key facets of reparation is a new, fresh face at the helm.
Clive Ansell, Senior Advisor to the Board, Royal Mail,
believes that changing top management could help rebuild damaged
reputations. He says: "Trust is given to and renewed much more easily
for organisations than individuals - so sadly, whatever the system and
cultural failures leading to breakdowns in corporate reputation, it is
much easier for leaders to rebuild reputation if they are new. Beyond
that, those leaders must be determined to know how to respond to the
next crisis - acting decisively and consciously on behalf of their main
stakeholders - with a single clear 'voice' from the organisation on
situation and response."
In a global and digital world, reputations can form, grow and change quickly, the consequences of which can be far reaching.
Emma Villiers believes
the pervasion of the internet, blogs and social networking has made
managing reputation extremely difficult. She says: "This is new and
rapidly evolving territory. Leaders should not under-estimate how this
impacts, and will continue to impact, reputation management. After all
our reputation is only a measure of what people say about us as a
brand. All organisations - and not just consumer brands - will need to
address the risk that this presents and leaders will need to be
prepared to take a more active role in managing their organisations'
reputation - in the same way as they manage an organisation's financial
well-being."
We have a number of articles and papers available in the issue of
reputation in our 'Insights' section. The summary notes of a recent
Criticaleye Discussion Group entitled
The Corporate Reputation Imperative: How to measure reputation that includes Prophet's six pillars of corporate reputation. Also see,
Getting reputation management into the heart of business,
an article by Regester Larkin's Andrew Griffin and HSBC's Ivor
Godfrey-Davies on how to make investment on reputation management pay
off and align it with your company management and strategy.
Please get in touch if you have any comments about the issues in today's update. I hope to see you soon,
Matthew
