Reputation - your core asset
Everybody and everything in the human world has a reputation - like it or not. Not every company has a brand - but all companies have a reputation, good or bad.
However, not every company manages or worries about their reputation consciously - even though most corporate actions take at least some account of reputation. Whilst large companies have brand architectures (and many other brand models), very few have sophisticated tools for managing their reputations.
This is strange as the reputation of a company is its most important asset. Nothing is more fleeting or more priceless than a good reputation.
When companies plan to develop a reputation management programme they must move from talking the talk to talking in a conversation. Brand management and public relations is very much about the Talk. Reputation management is about being in conversation - that means listening and talking. For it to be effective you need to shape the conversation, but you also have to realise that these conversations can go awry ( think crisis for example).
As Alan Greenspan commented in 1999, "in today's world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward. Manufactured goods often can be evaluated before the completion of a transaction. Service providers, on the other hand, usually can offer only their reputations."
Although many factors influence reputation, the most important and intangible of factors is that strange emotional bond between customer and its stakeholders. Second comes the behaviour and standing of the CEO. Burston-Marsteller's 2003 survey suggested more than 50% of a company's reputation was attributable to the CEO; as they pointed out, the CEO is the brand's chief storyteller "who knits together the company's past, present and future."
Before Enron, the accountancy profession considered how reputation might be factored into the balance sheet and in some ways the term "goodwill" is an expression for reputation. However, goodwill is just an explanation of the gap between assets and capital - the intangibles. The credit crunch has shown just how truly intangible this goodwill is or can be. Accountants recognised that reputation needed to be recognised and valued, but their tools do not provide the accuracy to truly measure and assess "goodwill". There have been numerous other examples of companies with strong reputations falling from grace - and their reputation being revealed for being a mirage. Ahold, the Dutch supermarket chain was ranked number 1 in Europe for reputation by Harris Interactive before news of an accounting investigation for fraud surfaced.
It is clear the reputation is not always true - but it is also fragile.
Posted in Reputation Management Essentials