Why Care What People Think?

A company’s reputation is one of its most important strategic assets. What people think of you has a great deal to do with how they feel about you, which in turn has a great deal to do with whether or not they’ll do business with you. Reputation is a critical drivers of sales and business success (there’s a widely accepted correlation between reputation and share price) and as such it should be of strategic concern to any business’s top management starting with the Chairman and his Board.

In the past a Chairman could learn pretty well all he ever needed to know about how his company was perceived by those with influence over his share price by talking to a few like-minded chaps at the club. Nowadays, in a world where one guy with a laptop in his bedroom can cause reputational havoc, and impact the company’s financial performance both directly and quickly, life is a tad more complicated.

‘Reputation’ is a much misunderstood word. It certainly isn’t synonymous with ‘like’ or even ‘admire’. Both liking and admiring may form a part of most reputations, but reputation itself is more multi-dimensional, and is influenced by more people than those dimensions suggest.

All of which makes it very peculiar that more attention isn’t paid to an organisation’s reputation by those ultimately charged with its health – the Chairman and his Board of Directors.

Take a shining example of a business that understands what reputation can do – Apple. Certainly Apple makes great products – but so do others. Certainly they have loyal followers – so do others. Certainly they are consistent in every channel, from ads to stores, from packaging to the clothing, behaviour and knowledge of front-line staff. So do…oh hang on, maybe not!

And the architect of Apple’s reputation; and its guardian protector for so many years? The guy at the top, the late Steve Jobs.

Those without Steve Jobs’ intuition need metrics. Of course there are many research companies offering to measure your organisation’s reputation. Most use a tried and tested approach, which in far too many cases hasn’t really been reviewed or fundamentally changed for many years. Yet the manner in which an organisation’s reputation can be impacted by channels like Twitter, or discussion forums has changed fundamentally.

Most organisations would claim to measure reputation. I’m sure most ask customers what they think from time to time. Maybe they ask their staff what they think of the operation they work for. Maybe they question journalists, analysts, and other stakeholder groups who affect reputation. Maybe they subscribe to a social media monitoring service.

But who joins the dots? Consumer research stays with the MR department; analysts’ opinions with corporate communications; staff research with HR; social media monitoring with the PR department.

And top management and the Board? Market research has a poor reputation at the top of so many organisations that I suspect the Board might at best see a dashboard containing metrics that have remained the same for years, presented infrequently and duly ignored. How many times do you see reputation metrics featuring in Company reports – despite the link to share price and financial performance?

The truth is that most companies don’t really measure reputation, as reputation is multi-dimensional and research isn’t organised like that.

We (correctly) hear a lot about the value of integrated communications, and communications planning. The same principles apply to measurement and evaluation, yet few apply them.

As the US consultant Leslie Kossoff put it: “There are three primary currencies that organisations work with all the time, yet only two are actively measured – particularly on a real-time, strategic and operational basis. The currencies are: time, money and reputation.”