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Managing Corporate Reputation

According to the 2016 South African Graduate Employer’s Association (SAGEA) Candidate Insights survey of 2 052 new or future employees from 108 South African organisations, 85% of candidates feel that an employer’s reputation is “very important” when deciding where to apply and which employer to join.  68% will consider a company’s reputation for ethical, environmental and corporate social behaviour before applying to an employer and 69% will weigh up a company’s reputation as a responsible organization before deciding to work there.

You may ask yourself, “what are the components of a company’s reputation, how can companies have a positive influence on this rather intangible concept and how should employer’ articulate their reputation to maximum effect?”  This article aims to provide answers to these questions – unpacking what drives corporate reputation, how to manage and measure the drivers and finally exploring two practical reputation management case studies from South African organisations whose brand and reputation are globally recognised.

What are the components of company reputation?
The Reputation Institute is the world’s leading research and advisory firm for reputation, providing global companies with the best way to measure, communicate and manage reputation performance.  Their RepTrak® model is the gold standard for reputation measurement, providing an appraisal of how the general public views the world’s best-known companies across 15 countries1.  Although South Africa is not included in the global RepTrak survey the results are nevertheless of value to us in understanding how global brands are ranked as well as understanding what makes up a company’s reputation.

The Reputation Institute defines reputation as: “an emotional bond which ensures that:

  • Customers buy a company’s products and services;
  • The general public recommend the company;
  • Policy makers and regulators are prepared to grant the company a license to operate;
  • The financial community invest in the company;
  • The media report favourably on the company’s point of view; and
  • Employees deliver on the company’s strategy”

A company’s products and services, governance and innovation are the key drivers of how stakeholders perceive a company or brand.  The 7 drivers of corporate reputation are embedded in the answers to the following questions:

  1. Does the company offer high quality/excellent products and services?
  2. How innovative is the company in what it does and delivers?
  3. How appealing is the company’s workplace and how are employees treated?
  4. Is the company responsibly run, does it behave ethically and is it open and transparent in all of its dealings?
  5. Is the company a good corporate citizen with a strong social and environmental conscience?
  6. Does the company have visible, strong leadership at its helm?
  7. Does the company deliver strong financial performance?

Reputation may therefore be influenced by effectively managing and delivering against each of the 7 drivers (products and services, innovation, appeal as an employer, ethical behaviour, social and environmental conscience, visible and effective leadership and strong financial performance).

Which are the world’s most reputable companies?
The RepTrak survey evaluates the world’s most highly regarded and familiar global companies.  The 2016 top ten companies with the best reputation in the world are as follows:

1.    Rolex
2.    Walt Disney Company
3.    Google
4.    BMW Group
5.    Daimler
 
6.    Lego
7.    Microsoft
8.    Canon
9.    Sony
10.  Apple
 

The list may or may not surprise you.  It is important to note, however, that when evaluating the above list on a country-by-country basis the rankings do differ and the same companies are not necessarily in the top 10.  For example, the top rated company in North America is the Hershey Company, Lego is top rated across EMEA, Google is number one in Latin America and Rolex tops the list in Asia.

How should a company communicate its reputation?
The three channels through which stakeholders will build their perceptions of a company are as follows:

  • Direct Experience (buying products and/or engaging with services or interacting with customer support services)
  • What the company communicates (the company’s own communications via marketing and advertising, websites, newsletters, publications or social media)
  • What others say about the company (word of mouth, media coverage, expert opinions and social media)

Most companies can certainly manage and influence the first two channels but have no direct influence over what others say about the company.  Having a good reputation begins with what happens inside a company around each of the 7 drivers of reputation.  It will be influenced by how leaders, marketers and employees communicate this to the outside world and it will finally be determined by external views and perceptions about the company.

To gain more practical insight into reputation management we interviewed two global organisations who were ranked in RepTrak’s 2016 top 100 global companies.  Cisco is ranked 49th and Unilever is 89th – both have shared valuable insights with us.

Cisco’s People Deal and Moments that Matter
According to Cisco the critical components of a corporate brand would be:

  • A company’s product/s and how they are perceived
  • A company’s culture as voiced by employees and perceived by potential employees
  • A company’s strategy, goals and performance

Cisco’s reputation is very much internally-driven and their focus on how employees are treated is critical to the success of the business and its reputation.  Eighteen months ago Cisco embarked on a journey to clearly define their Employee Value Proposition (EVP) which is referred to as Our People Deal.  The People Deal encapsulates:

  • What Cisco delivers to their employees and what the company expects of them in return
  • Defining and managing the Moments that Matter in an employee’s life and journey at Cisco
  • The behaviours that matter at Cisco – Innovating Everywhere, Connecting Everything, Benefitting Everyone

People Deal defines the culture of the organisation and drives the focus, attitude and behaviours of employees using a combination of top-down and bottom-up approaches.  Cisco have defined 11 Moments that Matter:

1.    My first impression
2.    My innovation
3.    My leader
4.    My development
5.    My rewards
 
6.    My workplace
7.    My technology
8.    My personal experiences
9.    My making a difference
10.  My last impression
11.  My Team
 

Leadership are heavily invested in managing and sponsoring each of the 11 Moments that Matter and employees have a clear understanding of what is expected of them and what the organisation values.

Corporate Social Responsibility (CSR) is embedded in Cisco’s DNA – every employee around the world is given a week off each year to volunteer for or donate time to a charity of their choice.  There is also a huge focus on giving back to local communities using the power of connecting people to the Internet.

Clearly Cisco’s reputation is driven from the inside but this begs the question: “how it is communicated externally”?  Cisco are of the view that the communication of a company’s reputation should not be over-engineered or marketed because this results in it becoming inauthentic and compromising trust in the organisation.  Rather, it is the authenticity of employees and customers experiences of Cisco that creates connections which communicate the company’s reputation.  To this end employees are trusted to engage on social media and to share their experiences of good, and even bad days at work.  If this process is over-managed it results in the 98% of employees who have good intentions being stifled and, in Cisco’s experience the remaining 2% who might have a negative view are easy to manage.

Unilever and Sustainable Living
Unilever define three essential pillars around which reputation is constructed.  These are:

  1. Having a compelling purpose which employees can buy into and trust;
  2. Extending the organisation’s purpose to the outside world i.e. to consumers and communities served by the company. This entails having trust in Unilever’s brands as well as knowing that the company is responsible and sustainable; and
  3. Building a good image by adhering to regulatory requirements and legislation that applies to the industry they are involved in and to the markets they serve

Internally, Unilever have implemented a Sustainable Living Plan which is focused on continued growth that is decoupled from environmental impact whilst increasing positive social impact.  All business targets and goals are built around the Sustainable Living Plan.

Illustrative examples of this are Unilever’s goals to “help over a billion people to improve their health and wellbeing,” “to halve Unilever’s environmental footprint” and “to enhance the livelihoods of millions of people”.  These are specific, quantifiable goals which drive what happens inside and outside the business.

Using one of their products, Domestos, Unilever have embarked on a project to improve health and limit germ contamination in schools.   Approximately 800 000 children die every year from diarrhoea caused by unsafe water, poor sanitation and hygiene. This equates to more than 2 000 children a day that are adversely affected by poor hygiene  The Domestos cleaner toilets, bright future campaign has been successfully rolled out through partnerships with the Department of Education and UNICEF.

As part of the initiative, new toilets, sinks and taps were installed, walls were painted and doors were changed at 25 schools, benefiting 26 000 kids by making their toilets a cleaner, safer, germ-free environment. In addition, the brand has provided the schools with cleaning material and toilet paper supplies in an effort to restore a basic human right to learners and to stress the importance of adopting healthy hygiene habits. Disease and infections related to sanitation in those schools are now down by nearly 70%, and attendance has soared to over 80%.

Similarly, the Lifebuoy hand washing drive and Pepsodent oral hygiene campaigns have made significant inroads into the health and wellbeing of communities around the country.  Unilever have also implemented two job growth initiatives to address unemployment of women and youth, respectively.   The Knorrox Kitchen Queens project helps ladies to grow catering businesses in townships and the Ola Vendors project is growing jobs for young people.

The Ola Vendor project aims to reignite South Africans capabilities to support themselves and their families through vending. The process involved going back to the basics and investing in vending equipment in order to help create a brighter future for South Africans, enabling them to improve their lives and develop their own livelihoods.    Through the vendors programme, Ola has helped to create 2 200 jobs nationally to date.

It is through having brands with a social purpose that consumers begin to make positive associations and will trust and buy Unilever products.  In other words, the company’s reputation is communicated through the impact they have.

Linking a company’s Employer Value Proposition (EVP) to the company’s reputation is critical and Unilever shared with us how they do this.  The companys’ employees speak with passion about who and what the organisation is.  They believe in and share the authenticity of their own experience at Unilever and this is what makes the company a sought-after employer.

Of course in today’s world of social media it is important to consider the impact of these media on corporate reputation.  Used correctly and for the right purposes, social media can have a positive impact on reputation.  The downside, of course, is that anything that is in the public domain is vulnerable to scrutiny and misinterpretation.

The following catchy acronym describes a company’s responsibilities when it comes to social media – THINK which stands for True, Honest, Inspiring, Necessary and Kind – if a message about a company does not meet these criteria it should not be on social media!  Many of Unilever’s employees and consumers are Millenials and, interestingly, 70% of their consumers are female.  Women are known to have a more significant presence on social media than their male counterparts so Unilever’s goal is to have a social media presence where their consumers and potential employees are and to use social media as a platform to share positive messages around the three core sustainable living goals.

In a nutshell, Unilever’s advice to companies that want to positively influence their corporate reputation is to “understand your brand identity and purpose and build your reputation around that.  Know who the company is and what it wants to achieve – company reputation will flow from that.”

Conclusions
Whilst we may think of a company’s reputation as intangible there are 7 key drivers which have a critical influence on how a company is perceived by stakeholders.  These are products and services, innovation, appeal as an employer, ethical behaviour, social and environmental conscience, visible and effective leadership and strong financial performance.  Building a solid corporate reputation starts from the inside – by positively shaping employees’ experiences and by focusing on delivery against the 7 drivers a company’s reputation will almost manage itself.

1 – the 15 countries included are Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, South Korea, Spain, the United Kingdom and the United States of America.

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