The importance of a good corporate reputation is at an all-time high, yet 2018 is the first year of significant reputation decline since the end of the Great Recession according to the Reputation Institute. Surveys like Edelman’s Trust Barometer showcase consumers have significantly lost trust in media and governments.
Though stakeholders trust corporations less than they did a year ago, they are still more trusted than media and governments. This environment gives corporations an opportunity to build trust through leadership and direct communication.
Many CEOs claim that reputation is a focus area for them, yet a crisis can still set some of the most reputable companies back for as much as two years according to a study conducted by the William Allen White School of Journalism & Mass Communications at the University of Kansas.
Today, stakeholders are expecting never-before-seen levels of transparency. Online reputation management companies are sprouting out of thin air to help companies clean up their online reputations. Millennials have said for years that a company needs to be corporately responsible to earn their business. But just wait, Gen Z is going to place even higher demands on the lip service of Millennials and require proof that companies are, indeed, ‘good.’
No matter the size of the company you lead, whether a young growing company or a global conglomerate, you will be faced at some point with solving the problem that is known as your reputation. As a CEO, how do you lead a company to architect and protect its reputation?
The first step is to understand who owns reputation in your organization. In a smaller company, it may be your executive team or marketing. In a larger organization, you may have a Chief Reputation Officer. If so, is this role filled by a communicator, a lawyer, someone with an HR background, or maybe a marketer? To whom does the Chief Reputation Officer report? Is it the CEO?
If you don’t have a Chief Reputation Officer, then who is tasked with protecting your organization’s reputation?
Communicators own reputation management and crisis; so, perhaps it’s them? But wait, ethics and compliance are the protectors of the reputation, so maybe they own reputation in your organization. Marketers own the brand; does that put them on point for reputation, as well? What about corporate social responsibility — isn’t that role ensuring the organization is doing good work? And, don’t forget HR leaders, they own your culture, and lead employees who deliver on the brand promise; so, do they own reputation?
In some ways, everyone owns a piece of the reputation pie. But who do stakeholders, the public, and your board hold responsible for the reputation of the company? Yep, that’s you – the CEO.
Now, do you see why there’s a corporate reputation problem? Everyone has a role in reputation, yet no one is really making a difference. Departments are siloed, have different agendas, and often have no organization-wide focus or strategy with regard to reputation. At times, they are actually working against each other. Frankly, the corporate world is stuck in the mud when it comes to reputation.
Perhaps it’s time to change things up and consider architecting reputation versus managing it. How about a team approach?
Reputation has key drivers that can be addressed in many departments within your organization, so it is impossible to think that one person (other than the CEO) can own reputation. The Chief Reputation Officer is a great idea but will struggle to be successful without the power to lead change across an entire organization.
The alternative of selecting a Reputation Team for your organization does require careful consideration. It’s not the NFL Draft, but your future as the coach (CEO) may depend on who you put on the team. First, let’s start by analyzing who within your organization owns the reputation drivers.
- Products and Services
The most important driver of a reputation comes from products and services, with more than 1/5 of your reputation laying at the feet of why you are in business. In reality, good products and services are table stakes for being in the reputation game, as you must have good products and services to even consider reputation as a priority. However, when you have a crisis with that which is core to your business, recovery will take longer due to trust erosion, and customers will vote through their wallets. This includes delivering on your promises and making good when things go wrong. So, who owns this in your company – the COO, the VP of Products & Services, or perhaps the Chief Innovation Officer? Whoever it is, she must be included on the Reputation Team. - Governance
Governance is the next most important reputation driver behind products and services. If products and services are equal with competitors’, here is where you can begin to use reputation as a differentiator. Does your company, its partners, and your employees do the right thing? Do you have the processes in place to assure you do the right thing? Who owns this area in your company? Is it Ethics & Compliance? Whoever it is, a spot on your Reputation Team is certain, and he or she is a good candidate to lead the team. - Citizenship
This is the third most influential driver of your company’s reputation. The communities where you work, your customers, and your stakeholders want to know you care about the environment, the people who work for you, and your surrounding communities, including, of late, social injustices. Beyond the products and services, your stakeholders now want to know about the company behind those goods. Are you a purpose driven organization? Do you live that brand? Do your CSR programs align with your brand? The head of your corporate social responsibility team needs a place on your Reputation Team. - Leadership
Not only is leadership important to the reputation of a company, hearing the voice of the leader is more critical than ever. The CEO has to have a role within the Reputation Team. Stakeholders are looking to the CEO to have a conscience, and to think beyond profits and align leadership with the greater good both societally and ethically. And stakeholders want to hear from the CEO directly, not filtered through communications channels. For CEOs, building trust with stakeholders and the public may be job one – a position supported by the 2018 Edelman Trust Barometer where 64% of respondents believe that CEOs should take the lead on change rather than waiting for government to impose it. What an opportunity for corporate leadership! - Communication
We say communication runs through everything within your organization. If you don’t control the narrative, at best people won’t know what your company is doing and for what it stands. At worst, others will control the conversation for you. Transparency is important as is frequent communication. Being perceived as a “genuine” company is the personality trait that yields the highest impact, according to the Reputation Institute’s Global RepTrak report. A communicator should undoubtedly be on your Reputation Team, and in the absence of an ethics & compliance officer, is an excellent choice to lead the team.
A five-person reputation team is a good start, but we would also recommend including your chief people officer, particularly in the absence of a corporate social responsibility lead. Another consideration would be to add your chief marketing officer, especially if he or she is the owner of your organizational brand.
All data points to the importance of a corporate reputation to your organization, but recent research shows that organizations aren’t reaping the rewards of their good reputations and are challenged to sustain reputation levels in a transparent environment. So, something has to change, and organizations that are willing to make the change will stand ahead of their competitors. Creating a Reputation Team within your organization is an excellent first step along the path of architecting your corporate reputation. The rewards will be worth the journey.