Magazine article Communication World

The Evolution of Reputation Management: A Successful Reputation Management Program Ensures That Stakeholders Are Involved in Co-Creating the Future through an "Outside-In," Systemic Approach

Magazine article Communication World

The Evolution of Reputation Management: A Successful Reputation Management Program Ensures That Stakeholders Are Involved in Co-Creating the Future through an "Outside-In," Systemic Approach

Article excerpt

Like it or not, consumers are becoming more discerning, stakeholders are increasingly demanding, and the impact and presence of key influencers is intensifying. Their perceptions of companies are primarily influenced by their personal experiences, the companies' actions and messaging, media conversation, and what third parties say about the companies. As a result, executives are reevaluating their strategies, companies are becoming more expressive and transparent, and the need to build trust and credibility among stakeholders is deemed crucial to future success. Corporate reputation management is evolving and cannot be ignored.

What is corporate reputation?

Reputation Institute defines reputation as "the trust, admiration, good feeling and overall esteem observers have for a company." Simply put, it is the emotional connection with the company. Reputation is created by the perceptions people have on seven key dimensions: products/ services, innovation, workplace, governance, citizenship, leadership and performance.

Reputation Institutes proprietary RepTrak model measures the rational perceptions stakeholders have about a company, and research shows that building a reputation on these seven pillars can create a strategic platform for communicating and engaging with stakeholders.

There is an unquestionable link between reputation and public support. Strong reputations lead to positive, supportive behavior from stakeholders, which leads to improved organizational performance. Stakeholders are reluctant to support companies that they do not like, trust or respect.

Results from Reputation Institutes 2009 Global Reputation Pulse study show that companies that improved their reputation scores by 5 points saw an average increase in word-of-mouth recommendations of 6.75 percent.

What influences corporate reputation most?

There is no simple answer to this question. However, it is important to develop reputation strategies across multiple dimensions, understanding that stakeholder priorities differ. For example, consumers are primarily influenced by the product or service they purchase, whereas analysts tend to be most interested in corporate leadership, governance and financial performance.

Building trust in an ever-changing world is not a straightforward task. Reputation Institutes research shows that governance is increasing in importance as stakeholders demand transparency and ethical leadership. In 2009, Reputation Institute's research identified that stakeholders' willingness to give companies the benefit of the doubt during a crisis is primarily motivated and influenced by the commitment to and demonstration of good corporate governance and transparency.

The bottom line is that communicators need to stay attuned to stakeholder expectations and key reputation developments within their own companies, as well as at industry and country levels.

Stakeholders and the future

A successful reputation management program ensures that stakeholders are involved in co-creating the future through an "outside-in," systemic approach, instead of through "inside-out" public relations spin and traditional communication. Systemwide interactions among stakeholders contribute significantly to corporate reputation, so it is imperative that we examine stakeholder concerns and understand the factors that drive their perceptions. …

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