Reputation: Used and abused

Reputation is consistently among the top three concerns of CEOs. “It keeps them awake at night,” said Sandra Macleod, group CEO of Echo Research and chair of the Research and Reputation session at the MRS Annual Conference.

But what role do researchers have in managing corporate reputation and designing communication strategies?

Typically their involvement is limited to measuring reputation, but this isn’t as simple a task as some would have you believe.

As with all research projects, it’s important to decide what you are and what you aren’t measuring, but definitions of reputation are varied and confused, according to Rupert Younger, director of the Centre for Corporate Reputation at the Oxford University Said Business School.

“Reputation is a word that gets used and abused,” he said. “People confuse it with brand image, legitimacy, rumour and status.”

Younger’s definition of reputation, based on 30 years of work by the Said Business School, is: “Expectations about a company’s future behaviour or performance, based on perceptions of past performance.”

He said it was important for companies to recognise that reputation is not owned by the company itself but the public, and it is based on an individual’s own experiences of the company, whether direct or indirect.

This means that a company can have multiple reputations, depending on the audience. Measurement can succeed “if you can isolate the reputation that you want to measure”, said Younger. “But it is quite hard to have a sensible debate about aggregation” – that is, distilling a company’s multiple reputation scores to just one number, as surveys like Fortune Magazine’s World’s Most Admired Companies tries to do.

Successful measurement, Younger said, lies in “valuing the specific signals sent out to specific audiences”.

But despite the inherent difficulties in measuring reputation, it is important, not least in helping an organisation know when to correct its behaviour, said Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry.

A problem with a particular stakeholder group can quickly bring about regulatory involvement “if you don’t change that reputation,” Whitehead said. He also called for reputation measurement and management within companies to be owned by the board, not the PR or corporate communications department. “Behaviour change belongs to the board,” Whitehead said.

Finally, Graeme Traynor, a partner in Brunswick Research, argued for a much broader role for research – not only measuring reputation, but helping companies design reputation strategies and communications plans.

Firms are smuggling to build reputations in an environment of “information overload” and widespread “default public scepticism” about corporate motives.

“Companies can look to research to help them figure out how to cut through that,” said Traynor. “The challenge for the industry is to look at the inspiration behind reputation, not just mechanistic measurement.”