A Matter of Reputation

Comm update_8 OctoberConsistency goes a long way to building a strong corporate reputation. If a CEO waxes lyrical about the pride the company takes in putting customers first, or eulogises about how it supports communities and tries to ‘give something back’, then the business cannot be found to be doing the exact opposite. That’s a sure-fire way to attract a swarm of negative publicity.

From environmental disasters, to rogue pricing and bad customer service, there are plenty of examples of companies which have seen their once gilded brands fall into the gutter. Nick Barton, CEO of CityWest Homes, a provider of housing management services, says: “The crucial thing to think about is how it might break down if things start going wrong. That’s when your reputation is so fundamental, because when things become uncertain people will cling to what they are most comfortable with. Trust is the fundamental part of your reputation.

“People will go with you, even if things are going wrong, because they believe you’ll do the right thing and will fix it. If there’s no reputation and no trust, you will lose your audience, market, investors, bankers, whoever, very quickly.”

Over the years, a company’s character will invariably be defined by the way it has operated. Ian Wright, former Corporate Relations Director at alcoholic beverages concern Diageo, says: “First thing, and absolutely critical to any corporate reputation, is sustained strong business performance; you can’t expect to be a well-regarded company without being good at business and without having a strong track record of success.”

Pam Powell, Non-executive Director at Premier Foods, notes that building trust is increasingly hard among well-informed, sceptical stakeholders. She says it’s necessary to devise clear policies around things like sustainability and to be able to demonstrate that actions are being taken to improve performance, as this is critical for maintaining corporate integrity.

It’s a case of devising a watertight communications strategy. Samantha Barber, Non-executive Director at electricity company Iberdrola, comments: “To have an engagement strategy with stakeholders who are onside and supportive is actually quite straightforward. It’s a completely different kettle of fish when you are interacting with those who are openly and vocally hostile to your company and brand. To make it work, it requires very active and constructive listening… and to have a respectful dialogue on all sides.

“With a really hostile stakeholder group, you may never be able to win them over completely to your side and they may never be openly supportive of your company, but what you might be able to do, through greater understanding between your corporation and that group, is neutralise the negativity and hence its impact on your corporate reputation.”

Tone from the top

Employees should be under no illusion about what’s expected of them. On the flipside, they in turn must be confident that the senior leadership team is going to follow the same rules and codes of conduct.

For Ian, “it won’t succeed unless the CEO is absolutely committed, otherwise people figure it out quickly”. If a CEO has a passion for excellence in customer service, it has to be bought into by his/her “executive colleagues… and then it needs to be transferred and made into a real feature across the organisation, including the board itself”.

Without that buy-in, things will go awry. Tim Kiy, MD of Operations for Marketing, Communications, Citizenship and Public Affairs at Barclays Africa Group, says: “Reputation is something that’s owned by every single person in the organisation but the tone is set from the top, primarily by the board and the executive committee.

“They have to understand exactly what it is they want in terms of both a culture for the organisation and the relationship with their customers, and that should be imbued in both the brand and the brand positioning.”

Tony Cocker, Chief Executive of energy company E.ON UK, comments: “It has got to start from the most senior levels then be nurtured and fostered at every level. To do that you’ve got to have the right behaviours; you need simple, clear strategies and people at the local level… need to feel empowered to do the right thing for the customers.”

Certainly, the external messaging has to be equally transparent and it pays to be on the front foot. Andrew McCallum, Director of Corporate Affairs and Business Support for oil and gas company Dana Petroleum, says: “Stakeholders, whether they’re customers or suppliers, governments, policymakers or campaigning groups, have become ever more powerful in influencing the reputation of companies and, in turn, their ability to deliver their strategies and goals.”

One of the main reasons for this, he continues, is that they are now able to communicate much more readily about issues. They’re able to do so pretty much in real time, through social media in particular, and “they can have quite a big bearing, these different audiences, on the level of trust that any company, brand, or government for that matter, enjoys”.

Earlier this year, E.ON UK was heavily penalised by the energy industry regulator, Ofgem, for mis-selling to customers. Tony explains that, when any organisation is under intense scrutiny, showing yourself to be accountable is crucial: “From a personal point of view, as the CEO, you have to represent the organisation and if you make mistakes, in my view you have to stand up and apologise for them personally, as we have done.

“Clearly, in this day and age you have to go on the television… in our case you also go in front of select committees which, again, is televised. You’re in front of a stakeholder and you’re talking to customers, so you are very much representing the company and I think your values, therefore, will have to be very true to the values of the company.”

Clarity, conviction and consistency, as ever, make all the difference, and when things inevitably do go wrong, it certainly helps to be able to own up to mistakes. “The critical thing is to ‘be’ – to behave identically to your desired reputation, not simply to state it,” says Pam. “Trust must be earned through consistent behaviour across millions of touchpoints, large and small alike.”

I hope to see you soon

Matthew

www.twitter.com/criticaleyeuk

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