News & Insight
October 2006

Managing Your Company's Reputation

It is a truism that just about every problem brings with it an opportunity. Such is the case with the reputation scandals that continue to plague corporations. The opportunity is for those departments at the epicenter of organizational reputation management to do just that - start to manage reputation. Those departments are, usually, Human Resources and Corporate Communications. Although CEOs agree that reputation has a value -- is an asset -- few firms actually treat it as such. Most companies do not have a system in place for regular, periodic accountability on variations in reputation, yet without such a system opportunities will be missed and problems will become magnified. Measurement, acknowledgment and planning make possible proactive behaviors and communications to take advantage of reputational opportunities and minimize problems-- thereby building reputational capital.

Can Reputation be Managed?

The proposition is simple: If the two components of reputation(performance and communication) can be managed -- why can't reputation itself be managed? There are many organizations that list "reputation management" as a service offering, especially since the Sarbanes-Oxley Act became law in the wake of U.S. corporate scandals. Yet most of them are actually providing reputation measurement or crisis communications services and offer little in the way of proactive management of a company's reputation. They do not produce a plan that aims to manage reputation as other assets are managed - including the plusses and the negatives associated with any asset. And one thing is certain, as recent business scandals have demonstrated in the sharpest relief: reputations can surely be mismanaged, and in many cases, not managed at all. There is a clear need for a new approach.

Is Reputation an Intangible Asset?

As nebulous as reputation can seem, it has real, tangible value that can be measured. Companies with the better reputations attract more and better candidates for employment, pay less for supplies, gain essentially free press coverage that is worth as much if not more than expensive advertising, and accrue other benefits that actually contribute to profits. So the historical view of reputation as an intangible asset is the wrong view. It follows that those who believe reputation can be managed -- perhaps not totally, but which asset can be? -- must establish a plan to do so, as they would for any other asset.

Comprehensive Reputation Management

"Comprehensive Reputation Management" (copyright 2003 John Doorley) provides a formal structure for managing reputation. It is a way for an organization to get its arms around this asset, and a way to manage reputational problems, vulnerabilities and opportunities. It has been vetted before the leadership of The Conference Board, many industry leaders and CEOs, numerous academic researchers, and heads of corporate communications at 30 major companies.

Comprehensive Reputation Management = A long-term strategy for measuring, monitoring and managing an organization's reputation as an asset. Comprehensive Reputation Management is to reputation what risk management is to other assets. This strategy results in the management of an organization's performance and behavior, as well as its communications.

The Comprehensive Reputation Management methodology is applied to the major areas of an organization-for example, finance, human resources, investor relations, manufacturing, marketing and public affairs. Each area gets involved in a process that is a way of approaching total reputation management -- performance/behavior + communication -- and is distinct from brand management (the marketing value of a name) or corporate identity programs (which usually boil down to institutional advertising).

What this process delivers is a practical and actionable Reputation Management Plan. This is a strategic performance/behavior and communication plan to move the images various constituencies hold about the organization closer to the intrinsic identity (what the organization stands for). The very act of having to list reputational assets and liabilities helps the various units of the organization focus on reputation management. The Comprehensive Reputation Management Plan includes: a summary of the internal and external reputation audits; measures of reputational capital; a statement of reputational challenges and potential problem areas by company or organizational unit; the respective goals and opportunities, and corporate or organizational message strategies. With objectives, strategies and timelines, the Reputation Management Plan becomes a strategic guide for units of the organization to follow, short -and -long term.

John Doorley is clinical assistant professor and director of the M.S. Degree Program in Public Relations and Corporate Communications at New York University. Formerly head of corporate communications at Merck, when it was routinely named "America's Most Admired Company" (annual Fortune Magazine poll), he is co-author, with Helio Fred Garcia, of a book on Reputation Management to be published in October. With Professor Doorley, WJM offers Comprehensive Reputation Management services to its clients.

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