An organisation’s reputation is a valuable asset and can affect everything from brand identity to the ability to attract suitable job candidates and retain talent.
Therefore, it is important that the management of reputation risk is a priority that companies take seriously and incorporate into their key business priorities.
The importance of corporate reputation
Corporate reputation is important because it is a reflection of your greater business, and affects both its internal and external perception.
It’s a source of information which customers, investors, potential employees, partners, and other stakeholders will use to make decisions on your business. A good reputation can allow your company to grow, attract better staff, find it easier to get investor backing, attracts supporters which can help growth and sustainability, and help you to stand out from your competition.
It is an external influence over your target audience, can impact the effectiveness of word-of-mouth marketing, and a good reputation makes it easier for people to trust you and engage with you, and form a positive opinion about your business. This is a particular issue in an increasingly digital world, where information is easily accessible online and consumers interact and share thoughts and experiences through social media channels regularly.
Corporate reputation is an intangible asset and if there is reputation risk, there is risk to your business success.
How to avoid and manage reputation risk in the business world
There are a number of ways to avoid and manage reputation risk:
Focus on the things that people look for
This includes ethical behaviour and business practices, acting in a socially responsible manner, treating your employees well, being financially intelligent, having a strong leadership and management team, being reliable, communicating effectively, and having brand presence.
This means keeping your promises to shareholders and customers, being responsive, owning and resolving errors and mistakes along with making this part of your company culture and an expectation of your employees, upholding security and privacy standards, and presenting a polished brand, website and digital assets.
Have a dedicated person or team to manage it
If your business has the capacity, having a role or assigning responsibility to a current employee/s to oversee and manage reputation risk could be helpful. This could encompass responding to inquiries and complaints, monitoring and establishing social and online channels and conversations, ensuring staff are updated, educated, and informed, and your company is transparent and responsive when a crisis occurs.
Assess your performance
Check in with what you are saying and promising, and what you are actually delivering. Is there a gap or a misalignment to your corporate purpose mission, and values? You can uncover this through surveys to employees, partners, potential clients, and stakeholders, then track areas of corporate reputation on a scale which works for you. Set targets and goals for years to come.
Work from within
Employees have a role in corporate reputation management and minimising reputation risk. What they say about the workplace to their peers and networks can impact your corporation, and you should work on strengthening internal commitment between the organisation and its’ employees.
Use what’s available to you
There are things you may already have which can use to your advantage to manage reputation risk. Assets such as your website, social media, advertising, and other communication channels can offer ways to communicate what you want to portray.
Educating your staff on the value of corporate reputation to avoid endangering it
Your reputation involves everyone, from internal communications, to customers, to employees. Whilst employees can be a source of positive reviews, they can also represent reputation risk. Other channels of communication can be managed through the organisation, but it is more difficult to control what your staff say.
In order to mitigate reputation risk, involve your employees. Communicating your intent to be a high performing and high rewarding company with the best talent and best offering is one thing, but you need to ensure that the day-to-day environment is positive and employees are getting what they expect. They can be your greatest champions, so monitor staff satisfaction and look to improve based on their suggestions.
Consequences of a bad corporate reputation on a business
There are a number of consequences for your business for poor reputation:
- Higher costs associated with finding, retaining, and motivating top talent. It is harder to attract quality employees for the tasks your company needs to succeed, and it’s harder to keep them if there are better options available.
- Higher training and salary costs, since you may not have the top talent you are searching for, and may need to offer more to retain existing employees.
- Bad publicity and loss of trust. It is difficult, time-consuming, and costly to regain this.
- Damage to your corporate brand, and negative connotations or thoughts can impact a consumer’s thought-process.
- More difficult to get external stakeholder and investor buy-in.
- Potential loss of sales due to loss of trusts and brand value.
If you would like more information on how to assess your level of reputation risk and hire, train and develop staff which align with your organisational goals, contact us today.