Protecting Your Company's Most Important Asset
What is your company's most important asset? You won't find it on your balance sheet, or in the warehouse, or even in the board room. But like no other asset, it can make or break your bottom line.
What is your company's most important asset? Reputation. And, while that reputation cannot be controlled, it can be managed.
Reputations are based on nothing less than realities, or at least, perceived realities. And these realities are based upon a number of components, including employee relations, financial performance, community relations, philanthropy and character, customer service and satisfaction, news coverage, and legislative and regulatory compliance.
While reputation may be a matter of perception, managing it is the result of strategic planning. Here are five steps for managing reputation:
Step One: Commit to the process.
There's no easy way to have a good reputation. Creating and retaining a good reputation is hard work, and it's everyone's job. Every action of every employee impacts the company's reputation. While reputation management is everyone's business, like any corporate initiative that hopes to succeed, it must come from the top. It's management who is ultimately responsible for reputation management, and more importantly, reputation policy.
A good reputation policy is simply a commitment to doing the right thing. It means constantly reviewing the company's actions to ensure nothing can harm the company's reputation, as well as looking for proactive ways to promote reputation through employees, suppliers, customers, and the communities we serve.
For management, committing to the process of managing reputation makes good business sense. Eighty-nine percent of the general public agree a company's reputation will often determine the product or services they buy, according to a 1992 survey conducted by Opinion Research Company. Noted futurist and author Faith Popcorn agrees, saying that in the '90s people are only going to buy from companies that they can trust.
Step Two: Dream. What would you like it to be?
What would you like your reputation to be among your key audiences? Ask your top executives, middle managers and line workers how they'd like to score in such areas as:
- Quality of products/services
- Innovation
- Quality of management
- Attraction, development, retention of good people
- Financial soundness
- Value as a long-term investment
- Use of assets
- Community responsibility
- Communications
From this information, craft the dream.
Step Three: Benchmark it.
Use an outside, non-biased source to survey how your company scores in each of the above areas with its key audiences. Key audiences could include:
- Employees
- Customers
- Suppliers
- Influentials, such as media and other opinion leaders
- Government/Regulators
- Local communities
You may be surprised at what you learn. In a reputation audit conducted for one client, a software manufacturer, we learned their unique selling proposition, on which their entire marketing platform was based, was actually working against them. Customers were not impressed with the firm's ownership; they were impressed by the firm's willingness to train new employees on their software at no charge. By probing key audiences, we were able to identity a unique selling proposition that worked and in the process redefine their entire marketing effort.
Step Four: Compare the dream to reality.
Does the dream match the reality? If so, celebrate. If not, find out why.
If the disconnect is based upon misperception, you must do a better job of communicating to key audiences. Let's say you own a clothing store and your survey shows that customers want a youthful look, yet many feel you carry only conservative clothing. In reality, you offer a diverse line of clothes from conservative to hip. There is a disconnect based upon misperception. Your job then becomes doing a better job of educating your target audiences on your inventory.
If the disconnect is based upon reality, change may be needed. "The best way to keep a good reputation is to preserve your values but change the way you operate," says Edward Artzt, retired CEO of Procter & Gamble. Again, let's look at retail. Once known only for hardware, consumers are now exploring the "softer side of Sears." While Sears had soft goods for years, it changed its product mix to include many name-brand items. To survive, this retail giant had to change, and once it changed, it communicated that change clearly and continuously to its key target audiences.
Communication with target audiences is critical. The best communications start from the inside and work out, beginning with the employees. The goal should be to convert employees into ambassadors, for without their support, it's unlikely you'll enjoy a good reputation.
Step Five: Protect it at all costs.
While creating and maintaining a good corporate reputation is imperative to competing in the marketplace, nowhere is reputation more important than in time of crisis. Do you remember the Tylenol poisonings? Johnson & Johnson pulled product off store shelves and introduced a tamper proof packaging when several people died after taking Tylenol. The company took a short-term hit to save its reputation, and it worked. Tylenol sales rebounded becoming even stronger than before the crisis.
Community service can aid in time of crisis. By depositing goodwill in times of prosperity, we can take withdrawals in times of crisis. "Too often, companies take public relations, or image building for granted right until the time of a crisis, such as a drug tampering, an oil spill, or a tragic loss of life. Then the 'investment' a company has made in its image bank can be critically important," said Robert H. Hood, chief executive officer of Douglas Aircraft Company.
These five steps will help you manage your company's reputation. Managing reputation is a daily process. Credibility is based upon daily actions and decisions. We must not only say what we do, but do what we say, every day.
Reputations are like mirrors, they reflect an image at a given point of time. Roy Larsen of Johnson & Johnson puts it this way, "Reputations reflect the behavior you exhibit day in and day out through a hundred small things. The way you manage your reputation is by always thinking and trying to do the right thing, every day." By doing the right thing, every day, and communicating that commitment with key audiences, you'll protect your company’s greatest asset, its reputation.
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Copyright, Randy Siegel, 1998, All rights reserved
The Career Engineer" Randy Siegel works with organizations to take high-potential employees and give them the leadership and communications skills they need to be successful as they rise through the organization. Purchase his book PowerHouse Presenting: Become the Communicator You Were Born to Be through Amazon.com, and subscribe to his complimentary monthly e-Newsletter at www.buildyourleaders.com.