Reputation news for a saturday
Caught up on some reading this week. Lucky me.
One study comes from Echo Research and Reputation Dividend. They found that corporate reputations contribute to a total of $3.2 TRILLION to market cap in the S&P 500. Big number.
Reputation Institute released a new global survey report among corporate reputation officers (CROs), Navigating the Reputation Economy. The respondents are those senior officers who identify themselves as the senior-most person responsible for “setting their company’s corporate reputation, marketing, corporate communications/public affairs and business strategy.” One of their most important findings mirrors what we learned in our study on the company behind the brand. RI found that 80% of CROs say people’s willingness to recommend their company as a place to work or as an investment is driven by the perceptions of the company overall. Same for direct purchases — 38% say that purchase decisions are driven by the company behind the product or brand rather than what is actually for sale.
What is most particularly illuminating about the RI study is their depiction of where companies fall on the reputation management continumm. They describe a five-phase journey that companies go through from phase 1 (exploring reputation) to phase 5 (integrating reputation into business planning and company strategy). Phases 2 (customization of measurement and management) and 3 (business planning integration) come before phase 4 (cross functional implementation and accountability). Not surprisingly, only 13% of companies fall into the Advanced Phase among the 318 companies in the study. Most companies fall into phases 2 and 3 (69%). Eighteen percent fall into the phase 1 exploration phase. My experience agrees with this assessment. Most companies are in the phase 2 and 3 phase. Few really fall into the most advanced stage.
The distinctions between Early Phase and Advanced Phase companies could not be clearer, according to RI’s results . Advance Phase companies are 2-3 times more likely to:
1. Understand reputation across stakeholders and markets
2. Understand specific business impact of reputation
3. Have an internal council or steering committee to champion action
4. Have senior executives accountable for corporate reputation KPIs
5. Have reputation integrated into long-term enterprise vision, goals, and priorities
The favorite communications channels for reputation management are the company website, the annual report, stakeholder events and CSR reports. Advanced phase companies are more intense in their usage of nearly all the channels. However, as we have seen in elsewhere and in fact our own research, social media is the one channel where early phase and advanced phase companies are nearly the same. My sense is that this is because social media is still fairly new and experimental in the eyes of CROs and everyone is using it in the same way without being sure about what works and what does not work. All they know is that they have to do it!