Partnering on reputation
I am still technically on vacation but catching up on a few things so I can face Monday. You know how that is. Now back to reputation.
A payoff of a good reputation that gets little attention is how good reputation attracts better business partners. When you think about all those mergers and acquisitions that steam up the marketplace, people forget to mention that likes attract (good reputation + good reputation = consolidation). A recent survey from Fortune Knowledge Group and Gyro:, an ad agency, found that 70% of business executives cite reputation as the most influential factor in choosing business partnerships. I liked how Business Insider spoke about a good reputation as a “validation stamp” that makes buyers feel more comfortable about coming together. Everyone uses those validation stamps today whether it is to help in purchasing products or finding a great new place to work. There is an entirely new industry built on validation stamps when you think about Yelp, TripAdvisor, Better Business Bureau and Amazon.
When talking about choosing a business partner with a good reputation, senior executives who were surveyed say they focus on companies that have strong cultures (52%), respect for employees by management (50%), employee pride in the company’s reputation (41%), and management credibility among employees (39%). Again and again, we see that the intangibles are becoming as important as the tangibles. In fact, the research found that senior executives are finding it hard to just depend on the tangibles today. About two-thirds (65%) of executives agree that an increasingly complex business environment has made it more difficult to base decisions on purely “functional” factors (for example, cost, quality, or efficiency). Instead, they are taking deeper looks at culture, reputation and values. Interesting to me that these latter three factors are fast-becoming the distinguishing competitive advantage that companies are seeking to meet their reputation-building and success goals. The world is changing before our eyes.
Last year, I recall looking at a few companies in an industry to compare and contrast how they communicated about themselves on their web sites. I remember how one company distinguished itself by having a tab devoted to its partners. The company told you all the universities they collaborate with, non-profits, NGOs, scientific councils, associations, etc. It’s a smart idea for adding even greater credibility to those validation stamps we all look for today when making a business decision.