CorpComms Magazine

Reputation is a company's most competitive asset - the fourth bottom line after economic, social and environmental assets. And while it is 'hard won, it can be lost overnight', claims Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick. Speaking at a breakfast conference at London's exclusive Sketch restaurant, US-born Gaines-Ross explained: 'Everything in reputation management is very simple - but nothing is easy.'

She believes there have been twelve 'shifts in the landscape' of reputation that make it hard to manage in the current environment, including merger mania, which has produced a need for new reputations to be created. Corporate governance has changed the world of reputation, and stakeholder pressure groups have also played a role. Increased media attention on business means company reputations become 'very, very topical', while media developments mean bad news is disseminated faster. Entire industries or sectors can be affected by the reputation of one company.

Building blocks

'So what is reputation?' asked Gaines-Ross. 'I'd like to say it is simply about the character of the organisation. That's the easiest way to think about reputation: it is something you earn and you have to keep your promises to build it.' Gaines-Ross believes there are six ways to build reputation. 'Interestingly, financial measures are incredibly important in building reputation but, while they are necessary, they are not sufficient,' she explained. 'Leadership, responsibility and communications are rising in importance, along with talent. The Economist says the human resources director is going to be one of the most important and critical jobs in the coming years. Attracting talent is really how reputation develops. Bill Gates says if you took the 20 top people away from his company, it would not be the same Microsoft.'

The reputation of a chief executive is 'inextricably linked' to reputation, and is a factor in building and safeguarding it. An excessive pay-off to an outgoing CEO can damage reputation, while being seen as a responsible corporate, perhaps through environmental awareness, can aid it. But Gaines-Ross warns that a company's reputation can be damaged because of poor internal controls, which allow such triggers as financial irregularity, unethical behaviour, executive misconduct and - increasingly - security breaches. Prolonged online attacks can also affect reputation, though Gaines-Ross believes Coca-Cola has adopted a strategy to combat these that other companies may wish to copy. The soft drinks giant has launched a web site called Myths & Rumours that deals with rumours, such as the company's cans causing Alzheimer's, and explains the truth. 'The company says, This is a myth, this is where it came from and this is what the real story is,' explained Gaines-Ross.

Essential maintenance

'So, what on earth can a company do to manage reputation?' Gaines-Ross continued. 'First of all, keep your customers close to you. Have great satisfied customers who are going to recommend your company and your products to others.' Key to all reputation management, however, is communication. Gaines-Ross believes Sony, which took months before it recalled faulty batteries and admitted a problem, did not effectively communicate its apology. 'Instead of having the CEO apologise, which is expected today, Sony had the more deputy person in charge of electronics do a two-second bow and say he was sorry about the inconvenience the batteries caused,' she said. 'That's an example of communication that doesn't work. Having best-in-line products and services, a credible CEO and chairman who act and do what they say, and a strong leadership team really matter.'

When reputation is damaged, Gaines-Ross believes companies should 'instil a sense of urgency and say, This is urgent. We really have to fix it. Don't underestimate your critics.' Companies should recognise that 'reputation takes several years to recover,' added Gaines-Ross. 'It is a marathon, not something that ends in 18 months. This is what I know about reputation. It is hard won but easily lost - it can be recovered but that takes time. Reputation has to be won every day; every day consumers are out there voting on whether they're going to buy your products. You can't change the past - but you can affect the future.'

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