The Reputation Imperative
Reputation Institute spoke with more than 300 executives at the world’s largest and most influential companies for its 2013 Global Reputation Leaders Study, and heard variations on this storyline time and again: As much as reputation leaders (most frequently the senior communicator, chief marketing officer or the head of business strategy) would like to be able to tell CEOs and board members that everything is under control, the fact is, when it comes to stakeholder relationship management, everything is not under control. Although most companies agree that reputation management is important, relatively few have figured out what to do about it.
Results from the 2013 study indicated that while 79 percent agree that we now live in a reputation economy — an economy where who you are matters more than what you produce — only 20 percent say their company is ready to compete in it.
Fortunately, consumer products companies and retailers have managed to transfer some of their tremendous brand equity into reputational capital. This is one industry that has weathered the storm of the global financial crisis with the U.S. general public better than most.
Each spring since 2006, Reputation Institute conducts a syndicated quantitative research study across 34 countries, asking the general public to rate organizations on the amount of trust, admiration, good feeling and esteem they have for the largest companies. This “Reputation Pulse” score between 0 – 100 is both a perception and an emotional response to a company’s ability to deliver on seven rational dimensions of reputation: Products & Services, Innovation, Workplace, Governance, Leadership, Citizenship and Financial Performance.
This article analyzes how 31 of the largest consumer products and retail companies, when combined, have been able to build up enough reputation capital to become one of the world’s most reputable industries in 2013. In fact, only Walmart at 59.10 and Sears at 58.90 scored below a 60 (the cutoff for an average reputation) and more than half (17) of the companies included in this special report for CGT have scores above 70, signifying a strong reputation (see Figure 1).
What Drives Corporate Reputation?
The top three reputation drivers for the U.S. consumer products and retail industries are Products and Services, Governance and Innovation, comprising roughly half (48.1 percent) of a company’s reputation. What’s not surprising is that a consumer products or retail company’s No. 1 reputation driver is Products & Services. What is surprising is that 81 percent of its corporate reputation comes from the other six drivers — in other words, the company behind the brand(s). It is important to note that the difference between the leading driver (Products & Services at 19.1%) and the lowest rated ones (Citizenship and Workplace tied at 12.5%) in 2013 is just less than eight percentage points.
Building a Strong Reputation with a Systematic Approach
Over the last two decades of foundational work with some of the world’s most progressive companies, the Reputation Institute has observed four elements that are core to a reputation management system have risen to the top: business rationale, intelligence and strategy, management and accountability, and integration. Here’s a look at each:
Business Rationale
Intelligence & Strategy
Management & Accountability
Integration
Like reengineering and total quality management (1990s) and leveraging enterprise resource planning investments in IT (2000s) before it, reputation management is coming of age as a boardroom issue in the 2010s. Coming out of the worst global recession in 80 years, companies who are winning market share, breaking into new markets and increasing their valuations the most are the ones who understand the “new normal” where stakeholders rule.
Customers, investors, regulators and potential employees all want to know what a company stands for. Making the grade is now about trusting a company to do the right thing, and demand is at an all-time high in 2013 even though only 15 percent of global organizations are Phase 4/5 companies (see Figure 2).
The reputation journey continues, and what is needed to be successful is far more than research; rather, it involves taking a data-driven approach to managing all stakeholders — from workplace to marketplace — because a “one-size-fits-all” strategy is doomed to repeat the mistakes of the past. It is how to use the intelligence gained from stakeholder conversations in shaping strategies and initiatives that clearly demonstrates who the company is and what it stands for. It is also more than campaigns. It is about implementing the company’s promises and commitments into all touch points, and that takes a different kind of governance and “co-creation” than most companies are used to. Is your organization ready to face the reputation imperative of the 2010s?
Results from the 2013 study indicated that while 79 percent agree that we now live in a reputation economy — an economy where who you are matters more than what you produce — only 20 percent say their company is ready to compete in it.
Fortunately, consumer products companies and retailers have managed to transfer some of their tremendous brand equity into reputational capital. This is one industry that has weathered the storm of the global financial crisis with the U.S. general public better than most.
Each spring since 2006, Reputation Institute conducts a syndicated quantitative research study across 34 countries, asking the general public to rate organizations on the amount of trust, admiration, good feeling and esteem they have for the largest companies. This “Reputation Pulse” score between 0 – 100 is both a perception and an emotional response to a company’s ability to deliver on seven rational dimensions of reputation: Products & Services, Innovation, Workplace, Governance, Leadership, Citizenship and Financial Performance.
This article analyzes how 31 of the largest consumer products and retail companies, when combined, have been able to build up enough reputation capital to become one of the world’s most reputable industries in 2013. In fact, only Walmart at 59.10 and Sears at 58.90 scored below a 60 (the cutoff for an average reputation) and more than half (17) of the companies included in this special report for CGT have scores above 70, signifying a strong reputation (see Figure 1).
What Drives Corporate Reputation?
The top three reputation drivers for the U.S. consumer products and retail industries are Products and Services, Governance and Innovation, comprising roughly half (48.1 percent) of a company’s reputation. What’s not surprising is that a consumer products or retail company’s No. 1 reputation driver is Products & Services. What is surprising is that 81 percent of its corporate reputation comes from the other six drivers — in other words, the company behind the brand(s). It is important to note that the difference between the leading driver (Products & Services at 19.1%) and the lowest rated ones (Citizenship and Workplace tied at 12.5%) in 2013 is just less than eight percentage points.
Building a Strong Reputation with a Systematic Approach
Over the last two decades of foundational work with some of the world’s most progressive companies, the Reputation Institute has observed four elements that are core to a reputation management system have risen to the top: business rationale, intelligence and strategy, management and accountability, and integration. Here’s a look at each:
Business Rationale
- Integrated Company Purpose
- Corporate Reputation Rationale
- Defined Stakeholder Ecosystem
- Leadership Alignment
Intelligence & Strategy
- Systematic Evaluation
- Priorities and Success Metrics
- Corporate Reputation Strategy
- Corporate Narrative
Management & Accountability
- Collaboration and Relevance
- Planning and Simulation
- Cross-Functional Management
- Executive Accountability
Integration
- Corporate Narrative Activation
- Corporate Narrative Embedded Across Touchpoints
- Sustainable Ambassador/Advocacy
- Transformational Investments
Like reengineering and total quality management (1990s) and leveraging enterprise resource planning investments in IT (2000s) before it, reputation management is coming of age as a boardroom issue in the 2010s. Coming out of the worst global recession in 80 years, companies who are winning market share, breaking into new markets and increasing their valuations the most are the ones who understand the “new normal” where stakeholders rule.
Customers, investors, regulators and potential employees all want to know what a company stands for. Making the grade is now about trusting a company to do the right thing, and demand is at an all-time high in 2013 even though only 15 percent of global organizations are Phase 4/5 companies (see Figure 2).
The reputation journey continues, and what is needed to be successful is far more than research; rather, it involves taking a data-driven approach to managing all stakeholders — from workplace to marketplace — because a “one-size-fits-all” strategy is doomed to repeat the mistakes of the past. It is how to use the intelligence gained from stakeholder conversations in shaping strategies and initiatives that clearly demonstrates who the company is and what it stands for. It is also more than campaigns. It is about implementing the company’s promises and commitments into all touch points, and that takes a different kind of governance and “co-creation” than most companies are used to. Is your organization ready to face the reputation imperative of the 2010s?