What's in a name – a company name that is? Well, it could be a lot, or it could be rot. It is dependent on your company's reputation. If managed honestly and with integrity, your reputation can help position your company as being trustworthy and reputable. This provides a competitive edge and attracts new business. Without this we won't make money; and isn't that why we're in business? On the other hand, a poor reputation may spell disaster for your business.
Every organisation has a reputation derived from the way its stakeholders perceive it. To be clear, stakeholders consist of a myriad of third parties, from customers and employees to shareholders and suppliers to media (digital and traditional) and to the industry in which you operate. Reputation is built on the beliefs and opinions of others – you simply cannot not have a reputation. It is possible to manage your reputation though.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about it, you'll do things differently.” – Warren Buffet.
Perceptions are ultimately derived via dialogue which, Regina Le Roux1, author of Reputation Matters, states is the glue that binds the building blocks of reputation together. These building blocks comprise:
As it is dialogue (the 5th building block), or communication, that is core to reputation perception, I'd like to begin with it because: “When you know better, you do better.” – Maya Angelou. And this is the ideal quote with which to begin. For the first time, 3 generations occupy the same work space. So what? Well, in addition to having generally different beliefs and values, consistent technological progress has ushered in a new era of communication.
The thing is, it is not only communication types that have changed, but distinct personality types that can be seen across the 3 generations. It is for these reasons that it is important to take cognizance of the fact that each generation must understand your message content – the way you want them understood. Baby Boomers (born early 1940s to mid-1960s) prefer face-to-face, telephonic or meeting interactions. They were the first to have a high priority for work over personal life and they want details. Generation X (born 1965 – 1977) is skeptical and independent, and is the first generation to have electronic communication. They are responsible for the work/life balance and are willing to take on challenges. Their preference is email communication rather than telephone calls, for example. Generation Y (born 1980 – 2000 [Millennials]) consists of technological whiz kids. Their primary concern is quite literally “Why?” They are more socially conscious and will do most things as long as they understand the reason 'Why'. They are global-centric, preferring to engage with people on social media rather than face-to-face and appear to be good multi-taskers. But if they don't get constant stimulation they are likely to leave. They are considered the most team-centric generation and their preferred communication method is instant messaging, similarly to Generation X's use of emails, but concise and to the point.
One can easily see the inherent differences between their work ethics and communication preferences. Keep this in mind as you read further. Also remember, the common thread between all elements pertaining to corporate reputation is proper and properly defined communication.
This incorporates strategic intent, leadership, quality management, operational governance and business ethics.
Strategic intent is about values – people want to do business with and work for companies that resonate with their values. It is proposed that a value-centred, mission-driven organisation allows for innovation and provides superior client service. This boils down to managing resources so that product development and client service lead to client satisfaction.
It is wise to remember that not all managers are leaders and it is important that they should be. Credibility, integrity and high quality internal communication skills are key elements for a quality manager's reputation. As a corporate brand is often infused with its leaders personal attributes, s/he should have a reputation of good repute.
This is old news right? Yes, you are right. What is not repetitive though is that these elements have to be governed more closely than ever before. And this is because of technological advancements in the way we communicate. An executive who is politically verbose in his/her private life, for example, may accrue all sorts of undesirable attention if s/he posts personal political views on social media and someone reconciles him/her with their place of employment (e.g. Penny Sparrow in the real estate industry. Her career in the realty industry is over and her former employer Jawitz Properties also took action against her to protect its own reputation.). Because of electronic communication, beware even the limited privacy you have in your personal capacity.
You may, unintentionally, affect your and your businesses reputation. If so, you'd better hope that the damage done does not affect your company's bottom line and that your bosses understand.
It is interesting to note that 81% of CEOs external engagement is a mandate for building company reputation and that 70+% of executives believe that a CEO with a positive reputation attracts and retains employees2. One can see how they go hand in hand. The bottom line is that, as brand ambassadors, leaders' reputations must be invested in, managed and leveraged from.
“A reputation is like fine china, expensive to acquire and easily broken.” Peter Kiewit – Kiewit Corporation.
Under the quality management and operational governance umbrella, brand managers (leaders) must be able to increase product launch effectiveness, maintain client loyalty and run efficient supply chains. This can be done only via effective message content utilising the appropriate communication mediums. Although this means nought if a company's ethics are in question!
Perceived questionable ethics equals a questionable reputation! As business ethics are accepted behavioural standards they can become a moral perspective from which companies should judge its conduct. Sometimes it is not that easy, as just being associated with a company of bad repute may have a negative spin on your reputation. Think of the Steinhoff debacle and former chief executive Mark Jooste. His reputation is tarnished for good. Steinhoff is fighting for its reputation (and share price), but it could well be too late. Companies that were associated with Steinhoff stand the risk of their reputation suffering unless they take some drastic action – and ensure they communicate it to the appropriate stakeholders through the correct mediums with suitable messaging for different audiences.
Corporate capital combines human and operational capital. Operational capital transforms labour, materials and information into products and services via investments, marketing and managerial processes. Human capital comprises employees and managers; quality; skills; training; and the cultural mix in an organisation. It is having the correct personnel armed with the proper tools to do their jobs effectively. This makes for good corporate capital and contributes to innovation and intellectual property, which also play roles in reputation perception (see Corporate Performance below).
“If you think it's expensive to hire a professional to do the job, wait until you hire an amateur.” American oil well fireman.
So, as your output affects your reputation – and a favourable reputation leads to business advantages – investing in your workforce is an investment in the quality of your output. This is an investment in reputation.
Strategic alliances, partnerships, clients and your company's CSI activities also position your company.
Beware strategic alliances because if relationships are misaligned to your company's ethics your integrity and reputation will suffer. A great example of this was early 2017 when South Africa's big four banks, who had a 'relationship' with the Gupta family as their business account holders', cut ties with them and closed their accounts. The banks were not strategically aligned with the Gupta's or their misdealings, but the fact that they accepted and managed the family's business bank accounts may have deemed them to be in association with the family. They could not afford to have their reputation tarnished. It is possible that these banks not only retained loyal stakeholders, but also improved the publics' general perception of them.
Remember the adage – “familiarity breeds contempt”? When entering a partnership it is advisable to steer clear of friends and family, including spouses. Partnerships need to be entered into carefully as, if they are not, it may result in a poor reputation. Infighting and different perspectives are easily picked up by stakeholders, including clients, as they are reflected in your dealings with them. Once there is a perception of misalignment in company direction, it is your reputation that will take the flack, and ultimately your bottom line.
A good client relationship can develop into a long-term relationship (client retention) and Le Roux cites Reichheld and Sasser in Newman, who say that “a 5% increase in client retention can increase profitability by between 25% and 85%”. Client satisfaction leads to client loyalty, client loyalty increases client retention and the good news is that, according to Le Roux, “client satisfaction is an exercise in psychology rather than a series of marketing tactics”. Clients can be subtly reminded of your exceptional service by using newsletters, blogs, social media or other periodical forms of communication.
In this context corporate performance considers the perceptions and expectations that clients have of your value offering.
“Price is what you pay; value is what you get.” – Warren Buffet
Customers must recognise the value in your offering. An ideal example to illustrate this is South African founded company Liquid Chefs, which has also taken the UK by storm. The UK arm of the company has been used for delegates attending the World Economic Forum in Davos for several years. Davos 2018 had just less than 3 000 visitors and Liquid Chefs provided up to 30 catering stations on busy days, serving diverse cultures from around the world. It is not the products that earned them a significant reputation, but rather the behind the scenes organisation and logistics handling that enabled superior service. I learned this listening to a radio interview with Liquid Chef's UK chief executive – a good way of communicating to various audiences (if you have done your homework on messaging). This example covers another two areas important to reputation – innovation and quality. The company's innovation is obvious and if their products were not of high quality, the concept wouldn't work. Innovation and ability are stated clearly on the company's website: “We've poured cocktails on top of Table Mountain. Created smoothies in Antarctica. Flung bottles on beaches. And worked our liquid magic on boats and planes.”
A strong brand's reputation allows for increased success with innovative products because of the implied endorsement which lends credibility to a new product4. Bringing this home to the industrial sector, we can see how strong reputational brands allow for innovation in, for example, Hytec Group with the Bosch Rexroth brand, and Rockwell Automation with the Allen Bradley brand. Both of these companies are highly innovative and are world-renowned for their quality products and aftersales service.
WHAT ABOUT REPUTATION IN THE DIGITAL ERA
All of the above is still relevant in working towards a good reputation. However, in this day and age companies have to be extra careful. Your website, your digital advertising, landing pages, blogs – essentially the face of your company in the digital era – can be easily managed. What is dangerous is employees' and managers' use of social media in their personal capacities, when they can be easily linked back to your organisation.
It boils down to two things, in my opinion. Trust and effective internal communication. There is no way any company can police each individual's social media posts, and management therefore needs to trust that its workforce will adhere to policy and also refrain from sharing their personal opinions on work related matters. If your internal communication methods are effective, you can easily communicate any corporate rules about sharing company content or personal opinions on the company, and what any consequences may be. That said, if you have been working on your reputation and corporate capital, then neither of these should be any reason for concern.
Andrew Smith is a copywriter at CubicICE. He has over 20 years of writing experience across public relations, journalism and marketing, covering the business-to-business and industrial sectors.
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