Reputation determines what you become and how you are held in society. Whatever field you may belong or find yourself in life, once you are devoid of it, you are marooned, adrift, and completely pursuing a lost cause.
Around 40% of a [public] company’s market performance can be attributed to non-financial factors associated with its corporate reputation, (it can also be individualistic) according to an analysis by the Reputation Institute in 2016.
Corporate reputation is the overall estimation in which an organization is held by its internal and external stakeholders based on its past actions and probability of its future behavior, according to leading international expert Charles Fombrun, former research professor of management at the Stern School of Business, New York University, and founder of the Reputation Institute.
PR Professor Tom Watson, looking at it from another angle, emphasizes predictability of actions, and brings communication into his definition – “corporate reputation is the sum of predictable behaviors, relationships and two-way communication undertaken by an organization, as judged by its stakeholders over time.”
A new benchmark study from the ITSMA and ABM Leadership Alliance, titled: Driving Growth With Three Types Of ABM, found that 84% of respondents said that ABM has improved their reputation (brand perception, awareness, and knowledge).
If for any reason your attitude turns bad, people will not want to touch you with a “100 mile-long pole.” They will drop you “like a hot potato.” Your life or business will suffer a great calamity. According to Thrive Global, there is no greater value than a positive reputation, as it will open doors for you that you otherwise never could.
Volkswagen group’s overall revenue dropped 5 percent in the first half of 2016, the group’s share price tumbled around 40 percent from May 2015 to October 2016, its share of the European auto market fell, and it laid off 30,000 employees as the aftermath crisis of its diesel emissions scandal continued to hit the group after the scandal started in September 2015.
“It takes many good deeds to build a good reputation, and only one bad one to lose it.”—Benjamin Franklin
You will be doing yourself a great deal of harm if you put the importance of a good reputation to the back of your mind while you attend to more hard-edged, day-to-day urgencies. If for any reason you have built a business empire, you will see everything you’ve labored for over the years come crashing. The end result is that you will hit rock bottom.
If you run a corporation, you can avail yourself of these two main sources of corporate reputation which are experience and information. Experience is based on a person’s past dealings with your organization while the other is purely the extent and nature of people’s direct and indirect communication with you.
“Character is like a tree and reputation like its shadow. The shadow is what we think of it; the tree is the real thing.”—Abraham Lincoln
To get people vouchsafing for you, it’s compulsory you put in more than just an effective communication effort; an admirable identity that can only be molded through consistent performance, usually over many years is of absolute necessity.
The main benefits of a good reputation can be found in:
- People’s preference in associating with you even when they have alternatives;
- The opportunity to move people’s opinions and views from this association especially as an influencer in the society;
- Enjoying great support for your side of the story in times of controversy;
- The dividends you reap, the value and quality that are attached to your time in society.
As you go about building a credible reputation for yourself you must be wary of reputational risk which is a hidden danger that can pose a threat to your survival and wellbeing. It can often put you in a state of jeopardy causing you to lose a lot of financial resources and often leading to stress, desolation, and distress.
How do you manage reputational risk?
According to Harvard Business Review, inasmuch as reputation is perception, it is the perception that must be measured. This argues for the assessment of reputation in multiple areas, in ways that are contextual, objective, and, if possible, quantitative.
You must be very realistic and objectively evaluate your ability to meet the performance expectations of the people who depend on you to chart the way. When your character possibly exceeds your reputation, you must make concerted efforts to close the gap.
This reputation-reality gap can be closed with a more effective relation and communication program that employs the principles of strategic media intelligence especially if the reputation of your corporation is at a risk.
One thing is certain, there is a high cost to pay for losing a good reputation, your good standing can be completely devastated.