The business reputation landscape has shifted dramatically over recent years to a place where transparency, authenticity, accountability, and generally doing good for both the world in which a business operates and for those who are invested in it have become vital to success.
The need for a clear brand vision
There has long been consensus that corporate values, purpose and principles matter but there is a new push for them to go beyond buzzwords; they must be lived. Vague statements and half hearted promises are all very well but shareholders and customers are now holding companies to account.
Gone are the days of simply ticking off corporate social responsibility (CSR) checklists or announcing a new ESG strategy to satisfy the nosy journalist. Wokewashing will be put out like dirty laundry, exposed and spread across social media for the world to see. It’s the companies who have genuine purpose and real soul who are racing ahead. Those making more meaningful and measurable differences which impact on broader society have the golden key.
More companies are coming to realise that the mutuality of benefit between stakeholders and an organization is essential for longevity and success! Building, maintaining and protecting reputation should be at the very core of everything a business does.
Why reputation matters
With the competitive environment businesses must operate in today; reputation can give true competitive advantage. It can attract the best talent and build long-term stakeholder loyalty whilst weathering most crises! Respectively, a damaged reputation can cause a whole host of problems and failures. A strong reputation is no longer a nice-to-have; it’s essential for survival in the business world!
Reputation leads to trust, trust drives behaviors, loyalty and actions. It has been estimated that an organization’s reputation is worth 20%-30% of market cap (across FTSE and S&P). As such, like any other valuable business asset, reputation needs proper investment and management both online and offline; yet it is often left to chance.
As human beings, most of us want to be liked, trusted, respected, and invested in. Businesses should be looked upon in the same way. If you want clients, employees, and wider society to look at you favourably you must behave in a decent manner. If a company is branded unethical or untrustworthy it’s hard to claw back from such a demise. A business must respect those closest to it, its employees and those invested in it and be responsible for the world in which it operates.
So, are we all headed for certain obliteration if we don’t get a handle on this? Happy to report that it isn’t all doom and gloom, hope is out there! Let’s explore the true power of reputation and discuss strategies for building and safeguarding it…
The power of reputation
Reputation serves as a company’s intangible currency, influencing stakeholders’ perceptions and decisions. Here are some key reasons why reputation matters:
Customer trust and loyalty: A positive reputation enhances customer trust, leading to increased customer loyalty and advocacy. Customers are more likely to choose a company with a reputable brand, reliable products or services, and a demonstrated commitment to ethical practices.
Investor confidence: Investors prefer to back companies with a solid reputation. A positive reputation signals stability, competence, and long-term value, making it easier to attract funding, partnerships, and opportunities for growth.
Talent attraction and retention: Job seekers consider a company’s reputation as a critical factor in their employment decisions. A strong reputation helps attract top talent, fostering a positive work culture and reducing recruitment costs. Moreover, employees are more likely to stay with a company they believe in, enhancing retention rates and reducing turnover.
Crisis resilience: When a crisis hits, a strong reputation acts as a buffer, helping companies withstand negative impacts. A well-regarded organization has built trust with stakeholders, making it more likely to receive support during challenging times.
Strategies for building and safeguarding reputation
Stakeholder engagement: Companies should proactively engage with their stakeholders, including customers, employees, investors, suppliers, and the wider community. Effective communication, transparency, and responsiveness are key to building trust and fostering positive relationships.
Ethical business practices: Demonstrating ethical behavior and CSR initiatives is crucial for building a reputable brand. Companies that prioritize sustainability, fair labor practices, and community involvement earn respect and goodwill from stakeholders.
Thought leadership: Establishing thought leadership through thought-provoking content, expert opinions, and industry insights positions a company as an authority in its field. This helps build credibility and fosters trust among stakeholders.
Crisis management: Proactive crisis management is vital for protecting reputation during challenging times. Having a well-defined crisis communication plan, promptly addressing issues, and being transparent in communication are key elements of effective crisis management.
Online reputation management: With the rise of social media and online review platforms, monitoring and managing the company’s online reputation is essential. Responding to customer feedback, addressing negative reviews, and maintaining an active online presence help shape public perceptions.
Employee advocacy: Employees are powerful ambassadors for a company’s reputation. Encouraging and empowering employees to be brand advocates can amplify positive messages and create a culture of reputation management throughout the organization.
Always keep in mind:
- Authenticity is key – wokewashing is dead!
- Transparency – honesty about your company’s actions and behaviours builds trust.
- Pulse – keep your fingers on that reputational pulse! Know what’s being said about your business and respond quickly and appropriately.
- Do some good – be ethical, sustainable, and decent, because you actually want to be – not because you think you should.
- Engage, engage, engage – LISTEN to what your customers, employees, and investors have to say and want.
- Prepare for everything – preparing for a crisis can prevent your untimely demise!
In our increasingly interconnected world, it will be action, not spin, that builds strong reputations.
To avoid far-flung reputational threats, organizations must keep their fingers on their pulse, enhancing their listening skills in order to respond quickly and appropriately to potential emerging threats. They must build stronger relationships with stakeholders that go beyond the means of traditional PR, invoking trust and loyalty, and acting on purpose that goes beyond profit and loss.
Reputation is an intangible asset that holds tremendous value for organizations if nurtured and protected well.