For many years, I’ve been meaning to begin this blog on reputation – why it should be measured, monitored (audited), analyzed and managed, like any other asset. Now that the 3rd edition of Reputation Management (Doorley-Garcia, Routledge, Taylor & Francis) is at the printer and I am between academic gigs, I have no more excuses.
I started thinking about the possibility of reputation management when I was head of corporate communications at the health care company Merck, 1988-2000, during which time the company was on just about every Most Admired list, often at the very top. Under then-CEO P.Roy Vagelos, M.D., Merck’s market capitalization was often in the top five of U.S. firms, and top 10 globally. Yet Merck’s revenues were a fraction of the other top firms’, such as General Motors. So what accounted for the substantial difference between the liquidation value of Merck’s (tangible) assets and its market capitalization? Reputation clearly accounted for a significant part of that difference. (The ability to estimate the dollar value of reputation is much greater today and that will be the subject of my future posts and those of my colleagues Sandra Macleod and Simon Cole.)
“Good book, dumb title”
Co-author Helio Fred Garcia and I heard that more than a few times when the first edition of Reputation Management was published in 2007. This despite the fact that the text was peer-reviewed and published by one of the world’s leading academic publishers.
On the surface, the logic of the detractors was irrefutable: reputation is an intangible asset; therefore, it cannot be managed. That logic, more pervasive than not at the time, presupposed that intangible things, for instance interpersonal relationships, cannot be managed. I would argue that if intangible things are not managed their value will go south, just as will always be the case with unmanaged tangible assets. Do we need a case study to prove that if an individual does not care for and cultivate his or her personal relationships, the sum of how that individual is perceived and regarded – something called reputation – will deteriorate?
I believe that one reason so many organizations – from corporations, to governments, religions, universities and non-profits – continue to set records for destroying their own reputations is that they think of reputation as unmanageable. Nonsense! The reputation asset can be managed well, though not perfectly. The fact is, as the Great Recession demonstrated in the sharpest relief, no asset can be managed perfectly.
Some research I contributed to in 2011 indicated that organizations with a formal mechanism in place to manage reputation do better on the Fortune Most Admired Companies survey
If that is not reason enough for communication and other senior executives to put in place a formal process to manage the reputation asset, this should seal the deal: In 2014, more than 1,000 CEOs and other senior executives ranked brand and reputation management among their top five strategic priorities (annual survey by The Conference Board).
Here’s an overview of the emerging field of reputation management and why I predict it will, eventually, become its eponymous self:
- There are thousands of firms that bill themselves as reputation managers yet most by far stop at measurement or analysis.
- Many of the ‘reputation management’ firms monitor on-line mentions of a company or brand, and many do that very well. But they monitor – not manage.
- Over the last eight years the number of public relations firms that list reputation management among their capabilities has increased significantly.
- Some of the large management consulting firms have entered the field.
- The field has been moving from measurement to analysis to management. Most reputation firms and their client companies are stuck at measurement or analysis.
- Since the first edition of Reputation Management, researchers have done great work to validate the benefits of a good reputation. That the reputation asset has significant value is clear; that argument is settled.
- If the parts of reputation (stakeholder relationships, for instance) can be managed, so too can the whole.
This Blogger’s Commitment
If an organization is not going to establish some formal mechanism to manage reputation — that is, an ongoing process and plan — then why spend the organization’s money to measure it? Why analyze it or spend your time worrying about? This blog will take a hard-nosed perspective on reputation, always geared toward optimizing the value of this asset.