A strong corporate reputation is increasingly a PR responsibility

published 2005

Building a strong reputation is increasingly important for organisations - and, as such, it is a key public relations responsibility.  Here we focus on a few of the key aspects relating to reputation.

1. Reputations have a value to an organisation

• A survey by Yankelovich and Fortune in the US showed that those companies judged to have a highly credible reputation, had a 12 percent higher price/earnings ratios than those with a lower rating.
• Ernst Young in a study ‘Measures That Matter’ stated that 35 percent of a company’s value is attributed to non-financial intangibles  - brand image, management credibility and experience, the quality of the corporate strategy and organisational vision, innovativeness and CEO leadership style.

2. The CEO has a critical role in an organisation’s reputation (especially if it is publicly listed or a major national organisation in the public eye).

• 48 percent of a company’s reputation is attributed to the CEO’s reputation according to Roper/ASW.
• 95% of ‘business influentials’ identified by an InsightExpress study reported that the CEO reputation impacted their investment decisions.
• 92% of the same group said that the CEO’s reputation helps maintain confidence in a company when its share price is lagging.

3. Image is very different from reputation.

• Image can be bought and is short term. It can be generated through an advertising campaign or a corporate document or the look of the organisation’s premises. It is largely what an organisation says about itself.
• Reputation is earned and is built over a longer period. It is built through developing relationships and what an organisation does. It is largely what others say about you.
• “Image is an instant snapshot in time. Reputation is a photo album built up over time” (Jim Dingwall - Dingwall& Dingwall, Vancouver, Canada).

4. What key actions are necessary in building a strong reputation?

• Building relationships based on integrity and trust with groups, audiences and individuals over a sustained period.
• Doing things that matter and are valued by those groups that inter-relate with the organisation - not just talking.
• Being committed and consistent communicators with an open approach.

5. What are the four main components PR executives need to heed if they are to get their hands around reputation management?

• Recognise there are multiple interpretations of your organisation.
• Identify what those perceptions are through extensive research.
• Learn what the pathways were to these perceptions.
• Anticipate likely outcomes to reputation from any new PR projects
  (Joy Marie Sever, SVP-Director, the Reputation Practice, Harris Interactive)

6. How do you know if your reputation is strong?

• By measuring it through market research, ideally compared to key competitors.
• If the organisation’s share price is at a premium to its peers (consistently over a long period - not just at a moment in time).
• If the organisation is better able to attract and retain staff than its competitors or other organisations.
• If the organisation enjoys consistently strong support for its products and services and, ideally, is a recommended and preferred supplier.
• If the organisation is generally able to escape media or public criticism when there are issues, or if others have taken the organisation’s side when there has been a problem.