What goes into corporate reputation?
In our new global research on CEO reputation that we just released, we asked several questions on corporate reputation in general. How could I resist? Interestingly, nearly nine in 10 executives (86%) consider the reputations of their companies to be strong. However, fewer than four in 10 (38%) concede to a very strong reputation — hardly a cause for confidence in the ability to withstand a crisis or major threat.
Company reputations are shaped by a variety of factors, with quality of products and services identified as the most important factor by 66% of global executives, followed by financial performance (57%). Leadership reputation falls among the top five drivers (49%). This did not surprise me. Quality of products/services has always led the list among both executives and consumers. And financial performance, as they say, is necessary but not sufficient.
Importantly, a company’s industry ranks as the third most important driver of corporate reputation (50%) and is among the top five drivers of reputation for each industry represented in our study. This finding is quite different from earlier studies on reputation where industry classification was less important. The reputational impact of an industry today ripples beyond a single company. As an example, the BP oil spill impacted the reputation of other oil majors, and sizable triage had to be applied to improving their collective reputation. The same goes for just about every industry today. For executives responsible for managing reputation, the adage about being “tarred with the same brush” rings true.
Particularly noteworthy is the high importance that worldwide executives place on marketing and communications in driving reputation. Perhaps the proliferation of outlets and new ways that reputation can be communicated today is elevating the influence of marketing communications. In today’s digital age, consumers have countless ways of finding out information about a company, and the more effective marketers and communicators provide organizations with better ways to leverage the conversation and be heard. Additionally, whereas companies can easily imitate their competitors’ products and services overnight, how a company communicates and engages stakeholders can nowadays provide the differentiating and sustainable edge.