Warren Buffet famously said: "It takes 20 years to build a reputation and about 20 minutes to destroy it. If you think about that you'll do things differently."
We're all living in a 24/7 connected world with social media adding jet fuel to old news cycles. Now everyone can be part of the conversation.... able to shape sentiment as it unfolds.
At ChangeAgents we've been talking about how powerful reputation is...especially in a rapidly changing digital world.
A couple of weeks back, the French President, Francois Hollande's dangerous liaison with aspiring actress Julie Gayet grabbed world headlines.
In true French 'liassez-faire' style, he tried to separate affairs of the state with affairs of the heart. A prideful attempt at persuading the public his private life was a separate matter and had nothing to do with public office or his ability to perform as President. (Can you imagine Enda Kenny trying to do this?)
Although some of the best presidents have been serial philanderers (Kennedy & Clinton spring to mind) this brings up the issue of ethics. Can a leader who cannot be trusted by their life partner be trusted by the people who voted for him?
“Reputation, reputation, reputation – the one immortal part of man.” Othello
Damaged by the perception that he treated badly a woman in 2010 whom he called 'the woman of my life', he recently decided to publicly announce his separation from his partner Valérie Trierweiler.
Suffering from embarrassment and record low approval ratings, the President's reputation was in danger. A necessary political decision needed to be made.
It seems we're living in an era of Icon Implosion - where people we have looked up to & trusted - bankers (Sean Fitzpatrick), businessman (Sean Quinn), sportsmen (Lance Armstrong & Oscar Pistorius) and celebrities (Nigella Lawson & Ralph Harris) - have suffered cataclysmic brand damage.
“It's not about what you think about your Brand, it's about what your customers think"
Accountants would have us believe that profits, margins and returns are the most important thing in business. They are wrong. The reputation of your business is your most valuable asset.
Reputation is about everything a company does, wherever and whenever it does it. Your reputation (customer equity) is the preamble of financial equity. Brands have financial value because they're created assets in the minds & hearts of staff & customers.
"Reputation is what people say about you when you have left the room." Jeff Bezos
In The Brand Bubble, John Gerzema & Edward Lebar highlight the fact that, in the 1950s, about 30% of firm value was intangible (at the high end)... today it is closer to 62% globally.
Let's unpack some of the components that make up this intangible value. These include Brands, trademarks, goodwill, reputation, business models, proprietary process, customer contracts & data bases, intellectual property (R&D + patents)
So creating value today is not only about the quality of the product or service we deliver. It’s very much about the quality, transparency and consistency of a firm’s conduct - both internally and externally - as delivered by the Brand. The Brand is the experience that's created between the organisation's promise and the expectation of it from the customer & employees point of view.
"Reputation is a little like perception, it might not be true, but it is in the eye of the beholder"
In research conducted by global branding firm PROPHET - companies with leading reputations achieve annualised returns 13% higher than others. They outperform the S&P average by over 22%. Consumers are also twice as likely to purchase, four times more likely to pay a premium, ten times more likely to recommend brands with leading reputations versus falling ones.
Reputation, trust & integrity have never been more important. So how can you build a stronger reputation for your business?
We'd like to share a couple of ChangeAgent ideas on reputation for you to consider...
(1) Research your reputation
Find out what your key stakeholders (customers, staff, suppliers, investors) really think about your business. We cannot tell you how often there is a giant gap between the internal view of owners / management and the external view of customers, and even staff. Most organisations are terrible at listening closely to what people are saying about them and continue to manage with giant ‘blind spots’ hampering their progress.
(2) What’s your reputation built on?
Don’t allow this to be ‘managed’ by the PR department. It is the responsibility of the CEO and every single staff member. Be very clear about the core pillars your reputation is built on, so everyone is aware of how you do business. Consumers are not looking for perfection — they are looking for decency. Trust & brand leadership is also a function of the many quiet decisions and judgment calls a company makes about its own values.
(3) Join the conversation...
There are conversations happening right now about your brand. You’re blissfully unaware of them. In today’s on line world, most customers know more about the car they’re buying than the sales person they meet in the dealership. Technology is purely the platform that permits conversations around brands. Customers are investing more time researching options online before they get to purchase. What are people saying about your Brand online? How does this influence their perception of your business? Will it motivate them to chose you? Find out about your customer's journey - join the conversation online, be transparent - answer tough questions, serve others by providing value to them. Express the personality of your Brand.
(4) Release your Brand
We also live in a world where we have the ‘illusion of control.’ Gone are the days of trying to manage your Brand by using the corporate identity rules & guidelines. Your Brand is now the property of your stakeholders: you can no longer control - but only influence.
Like people, brands need a community of friends to offer suggestions call out mis-steps help a company change course & refine its offerings. Only trusted companies have this luxury in a crowded marketplace.
(5) Participate in growing your Reputation
Building a reputation does not stop with the CEO; it is the responsibility of every staff member -- a reason why today some companies spend more on internal marketing than external. Strong brands are built from the inside out - so make sure your people’s actions are aligned with your organisation's purpose and philosophy. It's not enough to have a "Mission & Vision" statement hanging on a wall - it's about relentlessly communicating the values of your organisation through every action & opportunity.
So whether it's your start-up, the organisation your work for, your personal brand or even the social cause you're trying to promote...give some thought to what you stand for and how to best communicate it.
At ChangeAgents...we're also trying to build our reputation. We'd love to hear what you think about our Brand, our Blog and how we could improve.
Leave us a comment. We promise we'll get back to you.