In the light of the latest 2017 UK Reputation Dividend Report where corporate reputations in the UK are valued at close to £1trn, a word of warning
We all know that an organisation in possession of a good reputation faces costs when trust collapses.
This holds true for most trust crises or reputational crashes. It’s true for skills failures in people, and in systems or machines, that is, “techno” rep crashes. It’s true for failings in the guiding beliefs of the organisation, that is, “ethos”-based rep crashes. But it’s in the political sphere that the loss of trust is most visible – from Brexit to Trump to Le Pen … and the implications back onto all of us. Not least with a potential exodus from the City, the arithmetic around this kind of trust and its loss is mind-bending.
But I believe that CORPORATE PURPOSE, well-articulated and embedded in teams’ daily operations, is a potential defender against erosion of trust. Corporate purpose is an accelerator of meaning and motivation among stakeholders. Why are we in business? Why are we here every day, beyond profit, bonuses and quarterly results?
Corporate purpose saying how a company will better people’s lives, argues a Bank of England-backed report, could boost the value of British firms by £13bn a year.
And 9 out of 10 global leaders in an EY survey say that reorienting their firms around purpose rather than profits would boost financial returns, customer satisfaction and social benefits.
When you know your WHY, your social raison-d’être, it’s then that your WHAT, the things you actually do as an organisation, and your HOW, suddenly have true impact.
Good business delivers on a Triple Bottom Line: social, environmental, financial.
With an uncomfortable trend we are seeing is scepticism about certain sorts of social generosity, “charity begins at home” populists say, the focus has swung onto MATERIAL well-being, especially post-Brexit
Economic good means jobs for co-workers, suppliers and distributors. It means taxes paid to feed public services. It means pounds shillings and pence, but not into undeserving pockets.
Corporate purpose can reach new highs as it entwines financial, ecological and social capital.
But proclaiming purpose is not without PITFALLS.
Perhaps the most serious is where reputation erodes because of a yawning gulf between declared purpose and behaviour. This is because a company fails to embed deep in its own people’s psyche just what it stands for.
The world’s gaze on United Airlines gave an instant lie to their statement: “we help unite the world by connecting people to the moments that matter most… We respect every voice… We make decisions with empathy… Warm and welcoming is who we are”.
Another challenge in communicating purpose is how to do it MEANINGFULLY to your inside and outside worlds.
Talking the talk without conviction or substance is a form of SELF-HARM.
And the ground-rules of authenticity and freshness go not just for verbal communication but for visual, behavioural, experiential, associative and other modes of communication.
Even more harmful than false communications are their insidious companions: phony facts and fake news, as Wikipedia founder Jimmy Wales raises money for a global news website, Wikitribune, to fight the proliferation of fake news and Facebook is adding to its ranks of editors and watchers …
Through it all, the essence of purpose must be to stay ALIVE TO CHANGE. Companies have to know the direction of travel AND notice off-piste opportunities that argue shifts in direction. Reputation analysis shows where purpose and reputation coincide – good or bad. The two need to be mapped onto each other and gaps and discrepancies managed.
Finally, in my experience, there is no better way of delivering a heads-up internally of the importance of reputation based on corporate purpose than the monetisation of what was once a dreamy intangible. This is what Reputation Value Analysis does. For internal audiences, it sets a price on the head of reputation. It says clearly how much shareholder value flows from what investors believe to be the case about you. It shows how much is in jeopardy if reputation fails.
With solid objective evidence, and messages built around the answers, the needle of perception stands the best chance of being moved.
Taken alongside other reputational soundings from the organisation’s close stakeholder community, Reputation Value Analysis, or the dividend paid by reputation, can help guide greater collective management understanding, attention, investment and effort.