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Reputation is king
June 26, 2018
The main 5 pillars to influence corporate reputation are: CEO reputation, product innovation, employer brand, financial stability and corporate responsibility. So, if you look at your reputation, analyse what you do to strengthen these pillars.
I do not believe that we need to talk more about “why corporate reputation is important”, but I would like to underline a reality: if your brand benefits of a powerful reputation and a crisis comes your way, you will most probably find people defending you…just because they trust in you.
Dennis Larsen works with reputation every day on all sorts of brands. Dennis is Managing Partner at ReputationInc and he accepted to share some thoughts with us.
Is reputation today more fragile than 5 years ago? Why?
I think the attention to reputation has certainly increased due to both the big issues and scandals we’ve seen that have catastrophic consequences for company reputation, trustworthiness and ultimately financial value. Some corporate reputations are certainly more fragile than before, but others are more resilient due to leaders’ increasing understanding of the importance in investing time and energy in strategic reputation management. What has increased its stakeholder scrutiny and we still see trust deficiencies, but savvy firms are focusing on how to engage with stakeholders in better ways to build long term value.
What makes a reputation to be strong and bullet proof?
Companies where senior management recognises its role in building and maintaining a strong reputation is a deciding factor. Also building reputation capability throughout the organisation is essential. Corporate relations departments may be the stewards of reputation intelligence, bringing the external insights about stakeholder perceptions and expectations into the business, but ultimately the work needs to be done by the entire organisation.
Top 3 brands you consider having strong reputation and why?
I see reputation as a multidimensional construct, so it’s hard to single out companies that have a purely strong reputation across all stakeholder groups and on all topics that matter to stakeholders. HEINEKEN, for instance, has a strong reputation among certain stakeholders for the work it is doing to address environmental issues, local sourcing and investing in Africa. Other stakeholders return less favourable perceptions surrounding other issues. In balance, though, many leading consumer brand companies are building up increasingly strong reputations as they better realise what stakeholders expect and how to connect on societal issues. As reputation sits in the minds of stakeholders, iIt always depends who you ask and what you ask them to comment on. Which is why companies that invest in understanding how they are perceived along their own tailored reputation topics tend to be better at building the right kind of reputation that leads to better relationships across multiple groups and regions. This is far more valuable than simply looking at rankings of ‘best reputation’ firms based on general public studies.
It is said that the reputation of the CEO makes 50% of the entire reputation of the company he/she represent. What do you say about this?
Senior leaders, including the CEO, clearly have a significant impact both in informing certain stakeholders’ perceptions but also in leading strategic reputation value creation and risk mitigation. So yes, if the CEO takes corporate reputation seriously, it will be easier for the company to build the right kind of reputation. But it is a stretch to say that the CEO ‘makes up’ half of the reputation in the eyes of stakeholders. Certain stakeholders certainly care more about effective leadership than others. And there are companies where a charismatic visible and outspoken top leader has a substantial impact on shaping the views of stakeholders. overall, though, I’d say that stakeholders base their opinions of companies around things they care about. These ‘reputation drivers’ differ by stakeholder, by market, by industry and from company to company.