Business Reputation Isn’t Just About Business

Peter Firestein makes the claim that “reputation is the strongest determinant of any corporation’s sustainability.” It determines value and relationships.

The corporate landscape has changed. Corporations don’t exist in a social vacuum. In Crisis in Character, Firestein writes, “the individuals who run significant companies hold much more than the companies themselves in their hands. Their influence extends to where the children of their employees can go to college, and whether the communities that surround them survive.”

People look to corporations as they look to their politicians. They want corporations to reflect their own values. As a consequence, the question arises: Why should the conduct expected of corporations and individuals differ from each other? Why should we not hold both to the same standards? A corporation’s strong social identity can cast its light across products and services, and onto the attitudes of investors, legislators, regulators, and prospective business partners.

All of this adds up to a greater reputation risk. Reputation goes deeper than a corporate press release. It’s embodied in the system and the people who run it. To help companies achieve a balance between their internal realities and the demands of investors and society, Firestein developed a set of seven strategies that are of immediate use:

• Establish Core Values, and Reputation Will Follow
• See Yourself through Stakeholders’ Eyes: Market Intelligence and the Art of the Perception Study
• Define Your Company’s Landscape: The Power of Stakeholder Mapping
• Build Your Reputation from the Inside Out: Become the Company You Want the World to See
• Tell Your Corporate Story: Engagement and the Communications of Convergence
• Prepare for Crisis: How the CEO Saves the Company Every Day
• The Governance Imperative: Oversight, Informing the Board, and Compliance

As reputations are built over time, it’s not surprising that it is lost “in all the sins of commission and omission that lead up to a reputation-threatening event.” Building a reputation is a daily job. A CEO should expect a crisis and prepare for it by having a response plan. The solution to a reputation problem doesn’t lie in PR and corporate communications.

The CEO must foster a company whose characteristics are such that its influencers assume both its good intentions and its fundamental ethics in all circumstances. Should a crisis occur, that company receives the benefit of the doubt during the crucial time it takes to investigate the oil spill, the factory explosion, or the defective product. It will already have earned the chance to tell its story before the adverse event takes place. That’s the most important characteristic of a good reputation. The history of corporate failings is laden with tales of companies that have arrived completely unprepared at moments of crisis.

When did Noah build the ark?

Before the rain.

Posted by Michael McKinney at 09:06 AM
Permalink | Comments (0) | This post is about Ethics , General Business