Every day we hear of crises where organizations struggle to manage their corporate reputations. Nearly 7 in 10 communication professionals have experienced reputational crises at work in the last few years – resulting from government oversight, inability to attract talent and loss of customer trust.
It isn’t that leaders are unaware of the implications, but there is limited understanding of the components of this construct and how these issues unfold in the context of the economic, social, financial and environmental landscapes.
Corporate reputation is an amalgamation of perceptions or ‘the way stakeholders judge your organization’. This, in turn, means how employees, customers, suppliers and the public assess, evaluate and estimate the value and contribution of organization against promises made. Corporate reputation, despite being a critical aspect of the brand, take precedence for organizations only at the time of crisis. Unfortunately, by then, it is often late to do much apart from manage the crisis and hope for the situation to tide over, without much damage to the brand.
Often, custodians of the brand and corporate communicators responsible for managing reputation are confused about corporate identity, corporate image and corporate reputation. While the three are related, they aren’t inter-changeable.
Identity is about the essence of what the organization stands for and how it portrays itself. It is also about the way employees relate to the organization, what makes it unique and whether it stands the test of time. Image, on the other hand is about what people see, touch, feel or hear about the organization – from the logo to the jingle, the leaders who drive the agenda and the employees who live the values of the community interventions the organization takes.
While corporate communicators and brand leaders can shape the company’s image, they cannot control it. This is mainly because image is also influenced by stakeholders such as media, peers, competitors or the industry engagements that the organization does. Having a clear narrative about the organization and what it means for stakeholders is a starting point. Having all staff and leaders align their actions with this narrative creates the building blocks of corporate reputation.
Consider this. When measuring the most reputable companies in the world, Reputation Institute’s Global RepTrak® 100, looks at financial soundness, degree of innovativeness, product quality, ability to develop and keep key people, management quality, asset use, community and environmental friendliness, and investment value. However, what emerged strongly in the 2018 report is that the ethical behavior, fairness, product value and transparency are among the most important factors in determining a company’s reputation. Strangely, when a corporate reputation crisis occurs, often organizations blame it on a person, situation or a phenomenon rather than introspecting on the root cause of the issue. Deflecting the blame only compounds the matter.
Getting your staff on your side is essential for enhancing reputation because having advocates within is far easier than garnering support from outside. When your staff believes that the workplace is fair, transparent and witness ethical practices, there are greater chances of them championing the organization’s purpose.  Most firms miss this important stakeholder in their scheme of engagement, resulting in misplaced expectations and diminished reputations. A study among CEOs indicates that what employees say or think (42%) and marketing and communication efforts (49%) affects the reputation of the organization. These factors are among the top ten aspects influencing reputation. Employees are engaged when organizations help them appreciate the business context and what they stands for and how their products or services connect to the purpose. Staff will choose to stay when they work for a socially conscious organization – one that does authentic work for the communities around. Likewise, if organizations communicate consistently and with a wide range of stakeholders, they are considered more genuine than others are.
As the pace of communication quickens, especially with the explosion of social media, there will be increased calls for organizations to be more transparent, open with how they engage stakeholders, and operate businesses. Trust building measures such as social actions will be scrutinized even more closely. Overall, organizations that take proactive measures to improve their reputation will gain in the end. Those which attempt to fake their way to success by increasing advertising spends and create inauthentic narratives will fall by the wayside.
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