“Words are but wind”, a Shakespeare citation, more recently used by another, arguably more popular author whose works include dragons, ice kings and an iron throne.
The phrase couldn’t ring truer for companies around the world today. An organisation telling us they’re the leader in the market, the best employer, the panacea for all ills holds little to no impact without the tangible and perceived evidence to back it up.
We’re becoming desensitised to what brands tell us about who they are and why they’re really going to make a difference for us as a stakeholder in the company – whether that’s a client/consumer, potential or current employee, shareholder etc.
There are elements of irony and hypocrisy here, as earlier this year we rebranded and launched a new website in line with our identity as ‘the genuine alternative’. We may not yet deserve such a tagline, but we’ve long had the tried and trusted practices in place to continue building our reputation as a go-to firm for global executive search, talent & market intelligence, and leadership assessment & development.
It’s that word, reputation, which is the real focal point here. Not to be mistaken with brand, identity, culture et al. A good reputation is more powerful than anything else in terms of its ability to build trust, admiration and respect with those associated with your company. The catch is, whilst you can develop a brand or identity over a relatively short period of time, “it takes 20 years to build a reputation and about five minutes to ruin it” (Warren Buffett). Building a great corporate reputation is an arduous journey and requires non-stop management, but its rewards are immense.
So, how do you build a great corporate reputation?
Charles Fombrun’s Reputation Quotient (RQ) is one of the most recognised mechanisms for measuring corporate reputation in the world today. It looks at six key dimensions when gauging the overall reputational strength of a company:
- Products & Services
- Workplace Environment
- Vision & Leadership
- Financial Performance
- Social Responsibility
- Emotional Appeal
Although the RQ’s rankings comprise some of the world’s largest organisations, you don’t have to be a renowned multinational to build a great reputation. If you can continually make improvements around each of the above, you’ll steadily grow your corporate reputation and gain a huge competitive advantage.
Below we look at each dimension of the RQ and discuss why they’re critical to your company’s reputation as a whole.
1. Products & Services
A company’s offerings commonly define what the entire business is known for. The problem for a lot of companies is that there’s often no key or obvious differentiation in their products and services to that of their competitors – they’re relying on marketing prowess or ability to sell to attain new business. When you step back and take a neutral observation of what you’re actually selling, how different are your services to those of your competition? Sure, companies will say with genuine belief, “our products are the best”, and they could well be, however, the harsh reality is people unrelated to your company have absolutely no reason to believe it.
Quality, reliability and value are all important factors and, if you deliver them consistently over time, you’ll slowly build a reputation with key stakeholders in line with these qualities, but where reputation really takes off is innovation – a fresh approach to something the likes of which haven’t been seen before and which people can really understand the benefit of. Innovation provokes excitement within people and if your company can elicit this emotion from key stakeholder groups, then your corporate reputation will grow as a result.
2. Workplace Environment
A common misconception about an employer brand (your reputation as an employer) is that it’s only reserved for potential and existing employees. Your employer brand is one of the many components which contributes to your overall reputation as a business. Even as customers, we admire and respect a company for how well it treats, develops and supports its people. Look at tech giants like Google and Salesforce, two of the strongest corporate reputations in the world today. Yes, they are both innovative in what they do but it’s just as much about how they are as an employer which warrants their formidable reputations.
I myself am home-based for family reasons and 6 Group couldn’t be more supportive of this. Genuine flexible working is built into our employee value proposition (EVP) and this is well-known amongst our respective stakeholder groups. We also make no secret of our approach to followership (here’s our MD, James Beazley, discussing it) and here’s our definition:
“It’s ingrained in our culture to be honest about what each of us individually excel at. When a new challenge presents itself, we follow those within the business who are best suited to take the lead – regardless of their ‘level’. It's an acknowledgement of competence and an empowerment of trust between us all.”
3. Vision & Leadership
Companies with great reputations have leaders who embody and completely personify the business. They’re a walking, talking representation of the company they run. I’ll give you an example, who are the two people who come to mind when you think of Microsoft or Virgin? Exactly! We become far more receptive when the leader of a business is communicating and, if they are the personification of their own company, then everything they say has huge influence over their company’s reputation.
Those at the helm of the business need to spend time creating a vision, mission and a set of values for them to represent. Although this is fairly common practice nowadays, I question whether companies develop them because they really believe this is what they represent, or do they do it because every other company does it? As the leader of your business, you need to genuinely understand and define the principles, beliefs and overall direction of where you want to take the company. This all then needs to be actively promoted to all key stakeholders and the leader of the business must represent and personify the vision, mission and values day in, day out.
Over time, your company will become synonymous with a unique identity and its reputation will grow as a result. At 6 Group, we’ve even embedded our two values, go beyond and partnering, and their six accompanying beliefs, into our assessments for all new internal hires and each month we reward existing employees who have demonstrated these values.
4. Financial Performance
On the face it, you may think that financial performance is the one component of a corporate reputation which concerns fewer stakeholder groups than the other dimensions, i.e. predominantly shareholders or investors. But if you take the viewpoint of other stakeholders, you begin to see its importance. Weak financial performance to a potential or existing employee could provoke a perception of instability and they could start looking elsewhere for their next role. To a client, it could raise concerns about the actual value of the product or service – “why’s no one else working with this company?”.
It’s all well and good me saying, “do great financially and your company’s reputation will improve as a result”, but we all know it’s not as easy as that. Financial performance is naturally dependant on several variables based on how you run your business. What I will say is that corporate reputation is a two-way street meaning that it’s created from the different dimensions discussed here but, conversely, it’s also a strong influencer of the dimensions themselves. If your company is excelling in other areas such as products & services, workplace environment and vision & leadership, then this is only going to mean good things for your financial performance.
5. Social Responsibility
It’s no secret that corporate social responsibility (CSR) has become the norm for many businesses. Big or small, companies should collectively be working to benefit society and protect the environment. This can sometimes be a hard sell to a business because of the time and expenditure required, but it can be mutually beneficial if done the right way. The concept of creating shared value (CSV) has become a popular approach – the company meets social needs which, in turn, benefit the company. A well-documented example of this is Nestlé providing impoverished farmers within their supply chain with new agricultural equipment. The farmers can collectively produce a greater quantity and better quality goods thereby making more money and Nestlé benefits from a supply chain which goes from strength to strength.
You don’t have to be Nestlé to create shared value. Think strategically about areas where your company can make a positive impact on society, but also benefit from the work you’ve put into it.
6. Emotional Appeal
We finish with the most important and influential dimension of the RQ. Regardless of how well you perform across the other dimensions, if your company isn’t trusted, admired and/or respected then the entire corporate reputation falls to pieces.
Let’s look at one of the strongest corporate reputations in the world today, Apple. They have the most loyal and adoring fans out of any other brand that’s ever existed, and this is driven by emotional appeal. You see this with every single new product launch. A bazillion people around the globe waiting in line at their local Apple store to get their hands on the latest smartphone.
How they’ve achieved this level of hysteria around the company is by creating a tribe mentality amongst their customers. Everyone wants a sense of belonging and Apple created a forum for this. Coupled with an ‘us vs. them’ narrative steered by one of the most infamous leaders of all time, Steve Jobs, and it’s one of the best demonstrations of emotional appeal in business history.
This is an extreme example of how to it, but the best advice I would give to any company is to adopt a transparent approach with all your key stakeholder groups. Just like people, nothing damages trust quite like secrecy or misinformation and nothing builds it more than openness. Of course, there are matters which businesses can’t disclose with everyone in their entirety, but one of the most important points about corporate reputation is that it’s entirely formed by a person’s perception, not necessarily the stark reality. Be transparent enough to allow for trust to be continually built but always keep that level of transparency under your own control.
Controlled transparency is a quintessential trait of another topic, corporate communications, something I would like to discuss with you in my next blog.
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