Is corporate reputation manageable?
This week I had the pleasure of moderating a panel discussion on reputation management, organised by the Graduate Institute of International and Development Studies in Geneva. The panellists and I, experts from across sectors, agreed that effectively shaping the reputation of an organisation or company is increasingly challenging – yet more important than ever. Several global trends contribute to this:
Growing stakeholder expectations. Organisations today are under increased societal pressure to act ethically, and in line with their declared values.
Confirmation bias.People believe what they want to believe, and are more receptive to information that re-confirms their existing beliefs. This makes it more difficult to shift the opinions of individuals and groups.
Narratives are driving the discourse. For decades, academics in electoral studies have recognised that those who win elections are not necessarily those who dominate the argument. Instead, the winners are those who shapethe topics that are being discussed. This is now being shown to be equally true outside of politics – so the main role of an organisational or company narrative is not to convince, but to shape the topics that are being discussed.
The above trends are not new. However, social and digital media have increased connectivity, changed expectations, and forced companies and organisations to build solid reputation management strategies. All of this means cutting through complexity, and getting closer to stakeholders and customers.
Why reputation matters
Reputation is one of the key intangible assets for any company or organisation. Multiple studies have proved a positive correlation between a good reputation, and overall organisational performance. In addition, reputation directly impacts “license to operate” – whether in terms of regulation, finance, or customer belief. And loss of this “license” can threaten the existence of an organisation or company.
How to manage reputation?
Communications and public affairs professionals often talk about “reputation management”. However, I would question whether one can directly manage a reputation. Reputation is what stakeholders and customers think and feel about a company or organisation. As such it can’t be managed directly – it must be earned. A reputation can however be influenced through communications, advocacy and brand strategies, as well as through organisational actions.
What tactics work to maintain reputation?
Stakeholder perception of a company or organization should be a top concern at executive level. Perceptions are driven by conduct, and leaders make decisions which shape conduct. And even the most sophisticated communications or advocacy strategy will fail in the long run if it is not sustained by ethical and honest operations.
There are several actions companies and organisations can take to help manage stakeholder perceptions, and contribute to building and maintaining an organisation’s reputation:
- Make the organisational essence (North Star) a key part of the wider strategy. Vision, mission and values need to be at the centre of the organisational or corporate strategy. They are not just words – they are the key drivers and raison d’être of an organisation.
- Define a strategic narrative that positions the work of the company or organisation in a broader societal context. A really strong narrative can have a transformational effect on an organization.
- View communications as a key corporate function. Communications is no longer a support function for business – indeed it is a key driver of business in this highly interconnected world.
- Manage change in an inclusive way. Any discrepancies between what can be seen from the outside vs. what is felt inside will harm reputation over the long term.
- Align internally and externally. Internal stakeholders and employees have to believe in a corporate essence and narrative in order for it to be credible externally. The expectations of key stakeholders also have to be aligned with the business.