Corporate Reputation: Media still an important foundation

published 2005

Companies that strive to be perceived as having a good corporate reputation rightly put great emphasis on introducing policies and procedures that rate them well with key stakeholders - employees, investors and the community.

But simply putting policies, systems and programs in place is only one part of building a good corporate reputation: this will not change perceptions if you do not communicate consistently to your stakeholders and maintain a level of visibility through the media.

There is considerable evidence to support the theory that there is a close correlation between visibility, favourability and reputation.  In fact it is difficult to aspire to be regarded favourably, or to build a reputation, among a wide audience without first building a foundation of visibility.

The reasons why visibility is a foundation of reputation are:

1. Basic human nature means that we are more comfortable with, and inclined to rate favourably, people whom we already know something about (providing what we know is at least neutral). Conversely, we are often suspicious of, or hold our judgement on those we do not know.  Likewise with organisations - given the opportunity to rate one that is known to us, compared to one that is not, odds are we will favour the one that we know.
   
2. It’s an old adage in PR/communication that visibility is closely correlated with favourability in the eyes of the public. This is based on the principle that people - in the absence of personal experience or interface with an organisation - assume that an organisation that is often reported on in the media has justified that coverage because of its importance (or leadership position) in the eyes of the media.
   
3. When rating organisations that are known to the public - either because they have public shareholders, have a well known brand, or provide a direct service - there are comparatively few who have the opportunity to directly experience contact. By far the majority of the public form their opinion based on what they read, hear or see. Traditionally, the prime source of this information is the news media. 
   
4. Visibility of favourable aspects of an organisation can override unfavourable occurrences. For example, it has been proven in corporate reputation studies, where rankings are derived from an amalgam of company characteristics and ‘performances’, that visibility is a key factor.  “…companies have many opportunities to succeed and fail, but if they can generate more visibility and awareness for the measures on which they perform well than they do on those measures upon which they perform less successfully, they can emerge victorious” (Mark Weiner, CEO of Delahaye Medialink, USA).

A research paper presented at this year’s International Public Relations Research Conference in Florida, USA, provided further evidence for the strong link between the level of people’s familiarity with an organisation and their favourable attitudes towards it.

The research by John Gilfeather and Tina Carrol measured the attitudes and behaviours of people toward a selection of different companies across a cross-section of different industries with respect to their level of awareness or familiarity with each organisation.

It showed that individuals who are extremely familiar or very familiar with an organisation (versus those who are only somewhat familiar or just know the name) are more likely to have a more favourable impression of the organisation overall, and are more likely to evaluate them favourably with respect to specific attributes.

Individuals who are more familiar with an organisation are more likely to believe that the organisation:

• gives back to the community in which it operates
• is open and honest with the public
• will prosper in the long run
• offers the highest quality products and services
• cares about its employees

The research also found that the more familiar people were more likely to engage in favourable behaviours that support an organisation’s strategic goals:

• Recommend the organisation’s products or services to a friend
• Recommend the company as an investment

Fortune magazine’s ‘America’s Most Admired Companies’ list provides additional evidence of the importance of visibility. A number of companies succeed in making this annual list despite negative issues being reported in the media during the year. However, what these companies have in common is that they all generate visibility and awareness for the areas they succeed in, and this positive coverage counterbalances, and can even overcome, any negative public attention they receive in other areas.

There is also US research relating to the share market, that shows increased news presence has a direct impact on investor perceptions and can actually help sustain an investor rally (more about this in a future issue of PR Influences).

So what does this mean for organisations?

1. To become known, and favourably regarded, first you need visibility.  Your audiences need to know who you are!  You achieve that through broad-based communication, often using media as the conduit.
   
2. An organisation that says it has no reason to communicate through the media is making itself vulnerable. You look as if you either have nothing to say, or have something to hide.  It also means that if you attract bad publicity that will be all the public knows of you, as there has been no positive or neutral coverage to balance it.
   
3. Media coverage doesn’t necessarily mean daily, mainstream media. Coverage in your industry media, that may be monthly, is just as relevant.
   
4. Dealing with the media demands a style and demeanour that can be important to an organisation’s culture (and a challenge to senior management). An organisation that shuns the media, risks becoming introverted and incapable of adequately presenting itself to stakeholders when it has to face an issue. 
   
5. By all means improve your practices, policies and behaviour in relation to your key stakeholder groups - and strive for best practice. But don’t get sucked in by everything you read about how to build a corporate reputation.  Research still shows that many people will think you are good if they have simply heard of you!