3 Things You Should Know About Reputation

September 23, 2016

Jonathan Salem Baskin

Corporate reputations and brands are not the same things, and it’s important to understand the difference.

Reputations are the result of what people know about a business based on their judgements of its performance, gleaned through buying stuff, working there, owning stock, etc. It’s the present value stakeholders assign to the meaning, believability and reliability of a company’s future performance.

Brand is what a business has promised, either in performance or associated emotional benefits. It’s a future value, or “intangible,” that arises from customers’ thoughts and feelings about a present-day business that can’t be attributed to specific operational causes. 

If branding is the outcome of what a company says, reputation is the result of what it does.

Going forward, both affect sales, as well as equity valuation, employee satisfaction, and other metrics of company performance. But branding tends to get defined broadly — I’ve heard more than one guru explain its limitless scope by asking “what isn’t branding?” — and reputation is often attributed to public relations, and mostly when there’s some bad news crisis (i.e. reputation is most easily seen when media headlines challenge it).

Here are 3 things you should know about reputation that could help to carve out a more focused and successful role for your efforts:

First, you can’t control it; unlike branding, which can be creatively decided on a PowerPoint slide and literally bought with marketing funds, reputation emerges from every point (and every moment) in the life of your business. It’s an endless list of experiential outcomes that add up to conclusions. 

Your delivery truck cut off another driver when making a turn. Your investor relations folks tend to talk down earnings expectations every quarter. One employee is an irascible idiot to his vendors, and another one is a saint to hers. New products tend to come from your research folks more regularly than others, and they sell better, too. Your CEO talks in bland tautologies that he thinks are visionary.

Reputation is synonymous with truth, however imperfectly or subjectively understood. At least it’s what your stakeholders have decided is true, and that means they’ve purposefully or unconsciously compared what they expected from their experience, and what it delivered, and their conclusions underlie their next decision(s) related to your business.

So any promise that you can somehow “manage” it is either naive or disingenuous. 

Second, you should focus instead on reducing the gap (or delta) between expectations and reality. 

The key tool for doing this is making every effort to reflect and respect reality in your communications content. Is your announcement really the best thing since sliced bread? What about acknowledging the context in which you operate, not to mention the obvious questions that will be obviously asked the moment you reveal whatever it is you’re doing?

Transparency and disclosure aren’t just buzzwords when it comes to reputation, but rather the methods by which truth is revealed. Reputation is recognizing that you’re having actual conversations with your stakeholders, not simply promoting content for them to somehow consume.  

If there’s something that they’d find surprising if they discovered it, chances are you should figure out how to share it with them sooner versus later. If a critic will denigrate your use of the calendar, perhaps you should note it proactively. Issues that are too complicated to be reduced to simple positions should be described with the nuance they deserve; conversely, when it’s painful to be clear on things that are painfully clear, provide clarity.

Third, look to operations for reputation metrics, and not media results.

If only media were enough; the various measures of sentiment or “share of voice” make for great graphics, but they have little relationship to what people actually believe. At best, they’re a stand-in for what you hope they’ve seen, internalized, and applied. Likes and shares on social media might provide a hint to what people value, but they’re only that.

Instead, consider looking at operational efficacy for the outcomes of reputation (so don’t try to measure “it” as much as its effects).

Companies with good reputations should spend less money trying to sell stuff, and have supply chains that are more impervious to disruptions than others. They might retain employees longer, and at less outright cost, as well as attract better talent than the competition. A good reputation could mean that vendors and suppliers provide more liberal terms, and are higher quality than not. When bad news strikes, due to whatever cause, perhaps customers and shareholders will tend to be more forgiving, since a good reputation meant a better risk in the first place (so stock prices are more resilient, as are sales).

Media are a mechanism, not the deliverable. Come up with a model of the operational performance indicators you want to influence, and then work backwards to your content development for ways to do it.

You should consider being aggressively experimental with how you define and deliver reputation communications in 2017. In today’s economy, people “buy” reputation far more than they do brands, irrespective of how they (or we) choose to label it.