A few weeks ago in New York, I hosted a round-table on the value of reputation with the FT’s Lex columnist Sujeet Indap, and launched the latest Reputation Dividend US Study among the US S&P 500 under the banner of ‘The March of The Intangibles’
We are not alone in seeing the rise and rise of these assets. Recent studies by The Conference Board, We Are All Chief Risk Officers Now; Sustainability Matters 2014: How Sustainability Can Enhance Corporate Reputation; and Conference Board CEO Challenge® 2014: People and Performance – all point to ‘brand recognition and reputation’, as the FT put it recently, being among the most valuable assets of any company, with a heightened focus by CEOs to help drive enterprise growth and achieve better performance.
Which makes an important distinction, namely the one between ‘brand’ and ‘reputation’. The value and so importance of a ‘brand’ i.e. the thoughts, feeling and associations that consumers attach to the things they buy, is generally well understood. But the value of ‘reputation’, the thoughts, feelings and associations attached to the organizations that produce them across a variety of stakehoders is not. A great deal of time and effort has pursued the measurement of brands and branding, but metrics focused on reputation have largely been ignored.
But now, as risk becomes more complex, transparency more radical, and reputation more dear, with trust as the prize, our mission becomes ever more relevant. Through better alignment with stakeholder values and expectations, attention to authentic reputation creates very real value. It allows people and businesses to embrace innovation and protect themselves from risk. And it helps them to become prosperous, resilient and stable, and frees up all those unaccounted-for and wasted costs otherwise spent on fighting fires, fighting for talent, fighting to hold customers, fighting to win over investors, or fighting to shore up blunders.
The role of understanding, measuring and guiding reputation enterprise-wide has significant societal as well as economic value. Organizations’ wider impact and contribution to society does not sit separately in the role of business. It is part of how business should be done as an enabler of business success.
I spend much of my time helping leaders ‘get’ the materiality of reputation by un-picking and re-forming insights and approaches that they may already have and, importantly, making reputation built-in, not bolted-on. I find that even among the best companies whose journey to sound reputation is thoughtful and well managed, they are generally poorly served when it comes to really understanding, measuring and managing reputation.
In my 30 year career in research and insight, I have come to see first-hand that what gets measured gets improved. In the fight for resources, those in charge of helping to steward organizations on reputation need to be more fact-based . And as intangibles become recognized for their value, these assets demand sound representation at board level – as our guest speaker Gary Sheffer, GE’s global head of communications underlined, “something to withstand the withering questioning from Harvard MBAs around the table”.
Coming back to the FT – Andrew Hill’s article in the special report on Global Brands, said “The good news for brand and communication managers is that the discipline is never again likely to be a low priority ‘afterthought’ for their bosses. The bad news is that they will have to work harder to justify their positions.”
And that is where I believe rigorous, actionable insight plays a key part.