This week, Tracey Gordon from Edelman New York’s Corporate Practice, drafted this insightful blog post about corporate reputation. Tracey looks at the companies that top out Fortune Magazine’s “World’s Most Admired Companies” list and provides recommendations for how companies can emulate their success to build and maintain reputation.
The original blog post can be found here. Enjoy!
No CEO can ignore the public reputation of the company they lead.
But, how do you get a great reputation, and when you have it, how do you keep it?
A good reputation is the gold standard of the business world. It speaks to the DNA of an organization, and for the great companies it’s a matter of getting a lot of things right. Sure, a company can have a reputation for a single measure: financial health, management, a successful product line, what various constituencies – employees, investors, other executives, media – think of you. But, it’s getting most, or all of these right, that CEOs strive for.
They also know that bad reputations are hard to unwind, and even getting back to neutral will have high costs, not just in dollars, but also organizational pain, morale and time. Think of some of the companies, Toyota for example, that have had to get back to neutral, so they can rebuild its reputation.
This piece focuses on the positives, but one last reminder of what negatives can do to a business. Think of them as the corporate equivalent of termites. It may start with one, but it rarely remains so. They arrive one day, and next thing you know they’ve chewed away at your supporting walls. It’s hard for any company to stay upright with a full blown attack.
That’s why building a stellar public reputation is worth the effort.
Fortune Magazine does an excellent job compiling its “World’s Most Admired Companies,” list. Anyone interested in building corporate reputation, should take a look at how companies get on the list.
But, it’s the ones that stay there, year after year, that are truly remarkable and set the emulation benchmark. It’s not easy, and as Fortune itself says: “The only thing harder than gaining admiration from peers in the corporate world, is maintaining it.”
Here are a few recommendations:
1. It starts at the top
There are a lot of factors that go into the broadly defined mix that makes up reputation, and a lot of people have a stake in building one for the company. But the CEO has to be the champion and set the tone, both in defining the company’s values and what it has achieved. How do you separate what Steve Jobs stood for in terms of creativity and engineering ingenuity, and what the company delivered to its customers or its shareholders. Or Berkshire Hathaway from Warren Buffet; Amazon from Jeff Bezos. All three have been in Fortune’s most admired for years, Apple number one for four years straight.
2. Remember your employees are your best ally
Nothing replaces the bond employees have with the company they work for. You cannot overstate the importance of this core stakeholder in building and sustaining a positive reputation. Today, employees are not just the people that work for you. For many companies, they’re also customers, shareholders, and digital commentators through social media. Care for your employees, and you will find that they will care for you right back.
3. Everyone is watching you…All the time
Every interaction, every piece of communication, every interview belongs in the reputation bucket. These days, the blurring of audiences makes reputation management a cross-functional initiative. It can no longer live in one department. CEOs and their management teams must recognize that reputation seeps across and affects many parts of the firm, including all the business units, marketing, product development, PR and investor relations, how the regulators deal with you.
If you’re a company that is talked about, everything you do touches your reputation. As communications people, we’re very aware that one of the biggest challenges is keeping things inside the corporate beltway. There are the official watchers of course – media, buy and sell side analysts, researchers – who scour every nook and cranny of your business. But, today individuals have equal power.
In a digital “share it all” world, years of hard work can quickly come undone by even the smallest things that escalate into big things. There was a time when a frustrated customer with a bad experience, would at the most, write a letter. Today, the experience is tweeted before she leaves the store or hangs up after a frustrating service call. No one waits for consent to take action any more. The airlines have found this is out, as frustrated passengers start transmitting images of chaos from a plane that has been delayed several hours. That’s why they have teams of social media watchers monitoring every tweet and post.
A medieval English clergyman, said it best: “A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.”
A reminder that you can come back, but people remember, so don’t let the crack happen in the first place; even the best plaster job can’t really hide a reputation hit.
–Kate Ferguson, Director, Corporate Brand