When reputation takes a hit – knowing what you stand for is the first step to recovery

Reputation, image and identity are different concepts. Much confusion exists between the three because we use them synonymously.

A reputation is a distillation… it is the sum total of the experience, knowledge, feelings and emotions people have when interacting with an organisation or brand. Whether it is ‘good’ or not depends on the extent to which the public views the organisation (or brand) as delivering on the organization/brand promise.

Image is different.  It is how an organisation choses to represent itself to its various stakeholders. It tells people what it stands for and why that has benefit for customers through promotion of its products and services.  It advertises those benefits in communication which is rich is symbolism (think the Nike ‘Swoosh’ or the Mercedes ‘bangle’) and ‘success by association’ (Breitling and Rolex watches).

Identity on the other hand speaks to how an organisation sees itself. An identity is inward looking. It concerns itself with values and value systems in a complex network of stakeholder relationships. It is intended to appeal to employees and shareholders.

If reputation, identity and image are different, then it follows that by damaging one you don’t necessarily damage the other.

So an organisation that does something to damage its reputation (what others think of it) and image (the way it promotes itself) it can recover if its identity is sound.  When reputation takes a hit knowing what you stand for is the first step to recovery.

Reputation and competitive advantage

How does reputation lead to competitive advantage?

I reckon in two ways: Reputation, or let’s say the net effect of all one’s interactions with a brand, provides an identity that becomes a rallying point for employees and makes customers proud to be associated with a company or brand. They have a clear understanding of what a brand is about and identify with the vision and value system associated with that brand. Abraham Lincoln would call this the ’tree’. It’s the real thing and cannot be faked … at least not for long.

Secondly, reputation affects image, or the way others view you – this is Abraham Lincoln’s ‘shadow’ analogy. A positive image attracts people to you – like prospective employees so you get to choose the best of the bunch, but the same may be said for attracting customers and shareholders. Image is good for share price; good for attracting people to your cause.

So a positive reputation helps a company keep its best people, attract and retain good customers, and adds value to the share price as the share takes on an intrinsic value of its own.

Where is the competitive advantage? Sustainability is key across the triple bottom line – people, planet and profit. Now if sustainability is important it means that experiential gains from employees, and their interactions with customers, become the means by which service levels soar, input costs are kept low and where one facilitates a premium on pricing.

Sound easy?  Not a chance.  A reputation is hard earned and easily lost.

Why do some companies get away with reputational damage and yet go on to even greater success?  More about that next post.

Has Qantas damaged Brand Australia?

The idea of grounding an airline in today’s world of interconnectedness sounds like the stuff a Jeffrey Archer or Ken Follett block buster is made of.  If this was a case study you would probably be critical of its authenticity.  But that’s exactly what Alan Joyce (CEO) did with Qantas and the debate now is whether his actions have damaged Brand Australia?

In asking the question I wonder if we aren’t confusing two things here: brand identity and brand image?

The ‘problem’ for Qantas is an identity one – a fight for the soul of the airline.

Either it is a commercial enterprise run along commercial principles or it is a national airline with nationalist tendencies …. including a staff cost irreconcilable to a competitive environment.

Fix the identity problem and the image will be fixable.

Leave the identity issue unresolved and no amount of money or spin will pull a brand out of a death spiral that will end with a hard landing (ok weak pun but you get the point?).

I think Qantas will become a classic case study of how a CEO (with the unqualified support of his Board) can wrestle back the identity of a brand and go on to fix the fall out and crisis in image that Qantas no doubt feels right now.

Although$20m in free flights, and a no nonsense refund of costs associated with the decision to ground the airline, will go a long way to resolving an image problem even of this magnitude.

And as for those customers who swear they will never fly Qantas again?

They will be at the head of the queue for one of those freebies.

Integrity and brand building

Just as reputation plays an important role in the creation of a brand so too is it foundational to the development of a personal reputation an individual can be proud of. 

Benjamin Franklin reckons that ‘if you would not be forgotten as soon as you are dead, either write something worth reading or do something worth writing’.  

As with a brand then, and assuming you want to leave some sort of legacy, a personal reputation is just as important for individuals.  

I reckon reputation has one foundational personality trait:  Integrity. 

Integrity is an often misused word.  It means doing what you say you are going to do with honesty and truthfulness. 

A good reputation must enjoy public trust and strong equivalence between appearance and reality.  

How often have you met someone who can talk-the-talk but when it comes to delivery … well that’s another matter?

Make a decision today to walk-the-talk, not just talk it. 

To help you do that ask yourself two questions: What are you reading? and Who are you associating with? 

The idea here is that both influence who you are – this is something a parent readily recognises as they seek to protect their children from the influences of peer pressure and yet how few adults follow their own advice.  Where you will be in 5 years depends on both these factors – What are you reading? and Who you are associating with? – something obvious to Benjamin Franklin and critical to establishing your own personal reputation based on integrity. 

Make integrity the foundational personality trait in your life.  Integrity is inspirational.  Be inspired.

 

Should there be a link between workforce development and the bottom line?

I attended an interesting discussion yesterday on workforce development and was surprised to hear it is a nebulous concept at best.

Should it be part of HR (which is seen as tactical) or Learning & Development (which is strategic)?

How should one define workforce development ROI? To the individual? Society? Or how about in OH&S terms that shows less absenteeism or injury while on duty has a positive impact on the bottom line?

Can one draw a linear association between the development of people in an organisation and raw Dollar outcomes?

Should one?

Previous post I spoke of moral motivation in individuals and how we can apply similar principles to the modern day corporation.

Workforce development is a good example of how business is confused over its motivation. The common mantra is economic considerations must come first (i.e. ROI) because if you go out of business you can’t do anything else. Societal and environmental considerations come next but clearly in a hierarchical pecking order.

The UN Global Compact gets it right when it speaks of the triple line in terms of people, planet and profit – in that order.

Why does business find this conversation so difficult?

The economic imperative is a false one. It’s rarely about going out of business but rather how much profit is enough.

Workforce development is an input just as profit is an output.

Profit is a consequence of doing the right things not an end in itself.

Of course business would prefer to have a balance between all three and not have to elevate one above another but that is a hard task considering there often needs to be short term compromises to realise long term gains.

Isn’t that what sustainability is all about?

Building a good corporate reputation

The theory behind reputation management isn’t overly complex or difficult.

You need a vision and value system and then need a commitment to, and consistency in, upholding that vision and value system.

There is an assumption here that the vision works towards the common good and that the value system is such that in any given situation each value will be universal in its application i.e. regardless of the circumstances or context the value applies e.g. honesty.

Why then is a good corporate reputation so difficult to obtain and even harder to defend?

It comes down to the moral motivation behind the vision and value system.

A vision that requires a company to pursue a certain return on net assets; and claims profitability as one of its values must have its motivation in any and all circumstances viewed with suspicion e.g. saying you believe safety is important and believing it to the extent everything else is secondary are not the same.

Here you can see the problem – a company may not articulate the role of profitability in its endeavours but is driven by the value nonetheless.

Moral motivation in the development of a good corporate reputation is critical.

For an individual moral motivation could be determined by looking at whether their behaviour consists of ‘good action and good desires’ resulting in ‘positive moral worth’.

Positive moral worth speaks to both the action and the intention behind the action thereby enabling insight as to an individual’s moral disposition.

Can we apply the same theory to the corporation?

I think we can. More about that next post.

How do you create a good corporate reputation?

Ethical business practice makes you more competitive, not less so. 

That’s because ethical business practice gives rise to a reputation that attracts people to you:

• prospective employees want to be part of that reputation because they want to be proud of who they work for; 
• customers want to do business with a company with a good reputation because it reduces their risk;
• same for service providers. 

The more people want to do business with you the more selective you can be. 

• You can pick and choose between candidates making it more likely you will get the best possible person for the job. 
• You can focus on customers with a better risk profile than others; and
• You can discriminate between service providers which means you will get more for your money be it in delivery times, quality assurance or innovation in process, product and design.    

Ethical business practice then makes you more competitive because it makes you exceptional in a sea of mediocrity and product mimicry.

Most would agree to this point. 

Where things get tricky is how to develop that reputation. 

As with anything important in life it isn’t about one thing or a killer app. 

Rather it’s like a recipe in which there are four factors at work – the planning that goes into the process, the inputs you use, the way you put them together and external factors – similar to the heat of the oven. 

Trust me reputation takes on a whole new meaning the hotter the temperature.

How to use social media – when the social commentator is being contrarian

From the previous post we know marketers have a choice when using social media.  Engage or ignore? 

The first question you need to ask is to what extent the social commentator reflects what Pierre Berthon, Leyland Pitt and Colin Campbell term ‘the nominal relationship to the official brand message’. 

Is it dissonant or assonant meaning does it fit or not fit with the brand’s message, cultivated by the brand manager over a period of time? 

Using a 2×2 matrix let’s put that continuum on the Y axis.  On the x let’s look at whether the response is negative or positive. 

With me so far? 

This is what the matrix looks like:

Source:  Berthon, Pitt and Campbell, California Management Review, Vol.50,No.4, Summer 2008

Let’s talk quadrant 1:  The contrarian

In this scenario the underlying message in the social media space is negative and the relationship with the brand message is dissonant (in conflict with what the marketer intends).  Here the social commentator is trying to be difficult – to create doubt and to question the brand.  It can be fun and entertaining but left to its own devices may develop a momentum of its own to the detriment of the brand.

Engagement in this instance is usually passive and attitudinally would be disapproving.   A passive response would leave the issue up to resolution by other users e.g. other members of the online community– there is a tendency for marketers to think about planting a response but this is never recommended and it carries more reputational risk than it is worth.  Another user may simply disagree with the other party and ideally refer them to an authority on the matter.

Reputation in a changing world …..

Social media gives us access to an audience at a speed we never imagined possible.

In the past the only people with access to an audience were the privileged and very powerful media barons via their media empires.

If you owned a newspaper you could make or break a career. A radio station? A pervasive and ever constant presence in the lives of people who would never ordinarily have let you in. TV station? King maker and a network that granted access to the rich and famous at pretty much anytime of your choosing.

Now anyone with a cell phone has the same sort of editorial power – a built in production capability and a platform through the likes of YouTube, FaceBook and Twitter.

With such power (cheap at that), we have the rise of the internet superstar. Do you know who Judson Laipply is? Have you heard of the ‘Evolution of dance’? As of today Judson has recorded over 164 million visits on You Tube (http://www.youtube.com/watch?v=dMH0bHeiRNg).

What then are the reputational implications for a brand?

Marketers will find strategy definition easier if they acknowledge that brand equity is now defined by the consumer.

As the consumer uses social media to take control of the brand so they have access to an audience at the speed of life.

Marketers do have a choice – engage or ignore them.

Both options however represent a purposeful action and how you exercise it, together with the attitude you choose, can either enhance or detract from a brand’s equity.

Building a corporate reputation to be proud of

What is a ‘good’ corporate reputation?

A reputation is a distillation… it is the sum total of the experience, knowledge, feelings and emotions people have when interacting with an organisation or brand. Whether it is ‘good’ or not depends on the extent to which the public views the organisation (or brand) as delivering on the organization/brand promise.

How come an organisation can do something to damage its reputation but recovers regardless?

It’s important to differentiate between a corporate reputation and a corporate image/identity. Much confusion exists between the three because we use them synonymously when in fact they are distinctly different. A corporate image is how an organisation choses to portray itself to its various stakeholders. It tells people through its products and services, and the way it advertises and promotes them, what it stands for and why that has benefit for their customers. Their communication is rich is symbolism (think the Nike ‘Swoosh’ or the Mercedes ‘bangle’) and ‘success by association’ (Nandos humour and Breitling watches). If corporate image is about how others view an organisation/brand then identity speaks to how an organisation sees itself. An identity is inward looking. It concerns itself with values and what it stands for. It is intended to appeal to its employees and shareholders. If reputation, identity and image are different, then it follows that by damaging one you don’t necessarily damage the other. So an organisation that does something to damage its reputation (what others think of it) and image (the way it promotes itself) it can recover if its identity is sound.

Give me an example of how reputation is damaged but recovery is possible.

 Toyota and Tiger Brands are two recent examples of how reputation takes a hit but recovery is possible because their respective identities are sound.

How do you build a corporate reputation to be proud of?

Understand the difference between identity and image and that reputation is about a complicated web of net effects. An organisation that knows who it is (identity) and who communicates that effectively to others (image) is likely to have a reputation to be proud of.