Corporate reputation plays increasing role in strategy

Amazon.com's recent rise to the top of the Most Reputable Companies list seems to indicate that corporate communicators are placing an increased value on the role of reputation on consumer behavior.

Amazon.com's recent rise to the top of the Most Reputable Companies list seems to indicate that corporate communicators are placing an increased value on the role of reputation on consumer behavior. Perhaps this is why so many corporate ranking lists are measuring the multiple nuances that influence reputation.

The latest list comes from Reputation Institute (RI), in partnership with Forbes Media, which measured the trust, esteem, admiration, and good feelings consumers feel towards the largest 150 companies by revenue in the US. Amazon topped the sixth-annual rankings, followed by Kraft Foods, Johnson & Johnson, 3M, and Kellogg.

Anthony Johndrow, managing partner of RI, a firm which advises clients on how to manage their reputations, agrees companies are paying more attention to such rankings.

“Some companies are jockeying for position on these lists, whether it's being a good place to work or a responsible company,” he says. “But even as companies have become interested in understanding and managing their reputations, there are almost no resources dedicated by many large companies to create a platform to tell people what they do and how they do it. That, to us, is shocking.” 

Yet the RI research found companies with strong reputations are distinguished because they proactively tell their corporate story, says Johndrow.  “You can see a five-point lift in reputation score (out of 100) from people who have seen a company communicate versus those who haven't,” he says. “But the worst thing a company can do is communicate, ‘Trust us'.  It can't ask people to love them. It needs to get them to love and trust the company through the things that they do.”

With digital media creating new channels for people to engage with companies, Perry Yeatman, SVP, corporate affairs for Kraft Foods (which ranked #2 on the list), tells PRWeek it is more imperative for companies to explain their intent.

“We work hard to ensure that every part of the company is geared toward ambitious yet achievable goals, which are clearly communicated and aligned behind a common strategic intent,” says Yeatman. “A key message when we report our results is often, ‘We did what we said we would do'. And in today's world, doing what you said you would do says a lot.”

RI also looked at what separates companies' reputation by interviewing “chief reputation officers” (the C-suite) from the 150 companies about the challenges they face. Companies with excellent reputations were found to be 15 times more likely to manage their corporate reputation across company functions.

In the case of Kraft, the corporate affairs practice covers a wide range of disciplines, from CEO communications and government relations, to brand PR, says Yeatman. “It is also one of the few global functions that is straight-lined all the way back to HQ,” he says. “This enables us to manage the company's reputation consistently across audiences and disciplines, locally and globally.”

While communicators usually bear the responsibility for telling a company's story, Johndrow says in many cases “the story doesn't typically break through to paid media, customer service training, and other parts of the organization. Communicators need to find ways to influence the other moving parts of the organization so they approach the issue of reputation in a more holistic manner.”

The study also found reputable companies were 1.5 times more likely to include reputation research in reports to senior management, and 2.5 times more likely to have the CEO set the corporate positioning strategy.

In the end, Kraft's Yeatman says rankings such as RI's 150 Most Reputable should be a by-product of good communications – not the goal. “Rankings like this feel good and can be a useful indication of how we're doing,” says Yeatman. “But we don't run the company to achieve reputation rankings.” 

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