By Bill Coletti, CEO, Kith
Critical Takeaways:
- One way to think about reputation accumulation for your company is to think about “getting credit”
- The foundation of a Corporate Reputation Management program is the 4’As: Authority, Awareness, Assessment, and Action
- Companies have a finite number of levers to pull in order to grow their reputation
Over the course of the past 15 or so years in the reputation management industry, we’ve met with numerous CEOs and other company leaders who find themselves wanting to grow their company’s reputation. The majority of the C-suite leaders we work with have expressed that “reputation” is something they want and need, but they are often unclear about the expectations and how to manage the outcomes for the long term. In addition to helping leading organizations create, improve or repair their reputations, Kith seeks to provide clarity around reputation and how to manage it.
In his textbook “Introduction to Public Relations,” author and veteran publicist Dave Hyatt defined public relations as “doing good and getting credit for it.” More than 60 years later times have obviously changed, however, “getting credit” is a great way of looking at reputation management. Companies today embark on public relations campaigns because, in addition to building their reputation, they want to get credit for the things they’re doing—whether it’s an innovative product, an admirable philanthropy effort or sophisticated solution to a global challenge. Companies rightly seek credit, or acknowledgement, from their key stakeholders for what they’re doing because they know that in this day and age, that credit can turn into profit.
In this new “reputation economy,” a positive reputation yields a positive impact to your balance sheet, and a negative reputation can yield a negative impact. In 2016, Chipotle lost $26.4 million in the first quarter following multiple outbreaks of food-borne illnesses. It was the first quarterly loss the company had ever reported since it went public in 2006. The importance of reputation can’t be ignored, that’s why CEOs are placing additional focus toward corporate reputation and ensuring their company gets the credit it deserves.
When thinking about credit, many assume the subject is financial credit. Reputational credit is not as different from financial credit as one may think. When applying for credit at the bank, an individual or business must demonstrate they are in good financial standing and are a safe investment. The same goes for when an organization is asking for credit from the public. Consumers want to know that the organizations they interact with are honorable and reliable. The increased demand for transparency is evidence of this.
When a corporation asks for credit, they don’t submit paystubs or tax returns like an individual would at a bank. Instead, there are levers corporations have to pull. Based on findings in an article by Charles J. Fombrun, Naomi A. Gardberg, and Joy M. Sever called “The Reputation Quotient: A multi-stakeholder measure of corporate reputation,” Kith has developed its own set of levers organizations must throttle in order to grow their reputation.
It’s important to note that getting credit to build your reputation is first and foremost about doing good. “Doing good” can be measured by the levers below:
- Products and Services: What we make and sell the public is valued and we stand behind it.
- Innovation & Ideas: We are rich with ideas and solutions to solve our customer’s problems and a problem-solving leader for our industry partners.
- Leadership Privilege: We have strong company leadership with vision, passion and demonstrate humility in the service to the firm.
- Responsible Citizen: We positively impact our community, give back and supports causes that improves the world around us.
- Transparency: We obey the law and act ethically. We are open and honest about our business practices and state as much publicly.
- Employee Endorsement: Our employees understand and endorse our mission and purpose, and they take pride in what their company is doing for society.
- Financial Performance & Strength: We are a strong performing company that is profitable and successful and are good stewards of our resources.
Companies should expect to demonstrate health and/or growth in each of these areas if they wish to obtain credit from the public. In their review of the levers, companies should reflect on each lever’s description to see if they are accurate and test with stakeholders. They should then create programs, practices and policies that are true to their culture that reinforces the impact of each lever on the public opinions and attitudes.
Getting credit is even more crucial after a critical moment or when things go wrong. Following a crisis, you will need to rebuild your reputation. You can help guide your key stakeholders into giving you credit, thus beginning the rebuilding process and gaining the benefit of the doubt.
What we’ve found in talking to CEOs and CMOs is that the notion of reputation management is often vague and hard to quantify into programs and tactics. Kith has clarified the murky waters of reputation and as a result created a new model that makes things clearer and helps CEOs and CMOs quantify reputation.
Leading companies that follow a reputation management system typically follow the equation outlined above. “Why” is the purpose, cause or belief that inspires what your organization does. It’s beyond the simple answer of “making a profit.” The “Why” gets to the core mission of your organization. “Behavior” is the what you actually do and how your actions impact society. Then we add the 4 A’s of Reputation: Authority, Awareness, Assessment, Action.
The 4 A’s form the foundation of Kith’s Model for Reputation Excellence. These elements are how companies get the credit they want and deserve in critical moments.
- Authority: Strong, decisive leadership and empowerment from the top of the enterprise. Reputation management cannot just be a function of the marketing or communications department. They must have the authority and involvement that comes from the top of the organization. As well as the management tools and teams to evaluate and steer the program.
- Awareness: Process to identify, evaluate and monitor—issues, threats and opportunities. Setting up systems to generate and maintain awareness helps you have a grasp on your current reputation and how it may change over time.
- Assessment: Ongoing measurement of stakeholder needs, beliefs and opinions about you. Assessment goes beyond Awareness and involves asking questions about stakeholder needs and beliefs. Additionally, it requires internal assessment to determine whether your organization is functioning at its best.
- Action: Specific programs to swiftly react, make change, internally evangelize and externally promote your reputation agenda.
All 4 A’s must be adjusted to an organization’s unique needs if they wish to have a robust reputation management program. With a measurable, logical reputation management framework in place, companies can and will receive credit for their actions.
It is not easy – but things worth doing rarely are.
When you evaluate your organization against the 7 Levers, do you see room for growth? Are you getting the credit you deserve for the efforts you are making?
