Way back in 1980 American rocker Joan Jett launched her career singing: “I don’t give a damn ‘bout my reputation. You’re living in the past, it’s a new generation.” It helped her become the ‘Godmother of Punk,’ but it surely would be terrible advice for any company today.
Reputation may in fact be your greatest uninsured asset. And nothing destroys reputation faster or deeper than a crisis or an issue mismanaged.
Consider the study by Aon, which surveyed over 1,400 risk management professionals in 60 countries. It identified damage to reputation as the single biggest risk which companies face. Or the earlier ground-breaking Economist Intelligence Unit study which found that reputation risk is nearly three times greater than the risk of terrorism or natural disasters, and far surpasses regulator, human capital, IT network and market risks.
Yet despite this reality, a more recent Deloitte report revealed the worrying fact that only 19% of executives were confident in their own organisation’s ability to protect against and respond to reputation risk.
While the exact value of reputation is not easy to measure, we know that it reflects the cumulative perception of stakeholders – including customers, suppliers, employees, regulators and the media – based on their experience and contact with you. It may even be based on a perception which is untrue or unfair.
Furthermore, we know that reputation is built up over time by consistent performance and behaviour, not by short term initiatives or feel-good corporate advertising. Look no further than last year’s TV and print reputation campaign by the Australian Bankers Association around the time that damning evidence was being admitted before the Royal Commission into misdeeds in the financial sector. The message of the mercifully short-lived campaign was: “Profits don’t belong to the banks, they belong to everyday Australians like you,” which was little comfort to the “everyday Australians” financially ruined by newly-revealed policies which gravely disadvantaged customers.
Remember, branding is what you say about yourself, while reputation is what others say about you. It’s determined in the minds of customers and other stakeholders, not in brainstorming sessions at your advertising agency.
So, apart from running your organisation well and providing great products and service, how can you control some of the factors which influence how your reputation evolves?
- Develop an effective mechanism for listening to customer feedback.
- Implement an agreed protocol for promptly responding to complaints or critical comments.
- Build and keep updated an appropriate social media presence.
- Monitor traditional media and social media for what people are saying about you.
- Make sure your employees know who to tell when they see or hear something negative.
- Survey customers to find out what they think about you.
- Foster relationships with respected third-party experts who can help if needed.
- Actively support social responsibility beyond just day-to-day business.
- Designate and train spokespersons to intervene when things go wrong.
When budget time comes around and they’re looking trim costs, ignore the advice of Rock Queen Joan Jett that reputation doesn’t matter. Instead listen to American self-improvement guru Brian Koslow: “There is no advertisement as powerful as a positive reputation travelling fast.”
These basic steps won’t guarantee you a positive reputation. But they are a good place to start.