Image programs crucial for companies

Reputation is present throughout our lives; it's how we choose business partners, our dentist or mechanic, and even which neighborhood to live in.

Reputation is present throughout our lives; it's how we choose business partners, our dentist or mechanic, and even which neighborhood to live in.

When you do business with someone, just as when you meet someone at a party, you have preconceived notions about that company or person - their reputation precedes them.

Just a few years ago, the words "reputation management" met with puzzled expressions. But recent events gave us an accelerated education on corporate dishonesty, heightening awareness of the importance of a strong reputation and the substance behind it.

Three years ago, a search for "reputation management" on revealed three books. Today, the same search brings up 19 articles and books, and a Google search yields 93,000 hits. Recently, people have started building companies on the premise of reputation management, organizations have put such practices in place, and some, such as Siebel and IBM, have joined forces to offer software.

Studies indicate that reputation management is a necessity. The US Federal Reserve recently noted that intangible assets, such as brand equity and reputation, comprise as much as 47% of American companies' net worth. If shareholders, customers, and the public intend to hold senior executives responsible for their companies' reputations, executives should be armed with a clear understanding of reputation management.

Despite its growing presence, confusion still remains about the difference between PR and reputation management. PR is just one component of reputation management. PR typically utilizes such tactics as press releases and speaking opportunities to communicate what the organization does. Reputation management takes communications further.

While a reputation program might include some PR tactics, it uses research, positioning, messaging, and strategy to communicate with an organization's key audiences. Reputation management aligns communications with the enterprise's character and business goals; it creates and maintains recognition, credibility, and trust.

In his book Reputation, Charles Fombrun explores reputation management at Church & Dwight (C&D), the makers of Arm & Hammer Baking Soda. While other consumer product companies spend more than $200 billion each year on advertising, C&D believes that building relationships with key constituents creates positive impressions of the company, generates more sales than advertising, and strengthens the brand.

For example, in the 1970s, C&D astutely aligned itself with social concern for the environment. Consumers were troubled by chemical additives in household products, and C&D quickly established baking soda as environmentally friendly. The company's environmental reputation is now its dominant attribute, and maintaining that reputation has served C&D well.

C&D has grown from $15 million in revenues in the late 1960s to more than $1 billion a year. Reputation management not only helped C&D grow, but also has helped define the company.

If reputation can make or break an organization, it would follow that, as the training grounds for future leaders, MBA programs would include related education.

Earlier this year, the PRSA and the Newhouse School of Public Communications at Syracuse University conducted a study on reputation management coursework available in leading MBA programs in the US. The study found that, of the top 19 MBA programs ranked by The Wall Street Journal, seven offer one course each related to corporate reputation. In contrast, 11 programs offer coursework on social responsibility, while all offer management communications and marketing courses. Top-ranked MBA programs at such schools as Dartmouth and Yale offer more than 200 marketing courses, compared with seven in corporate communications or PR.

MBA programs now have the opportunity to acknowledge the growing responsibility senior executives bear for their companies' reputations. These programs have responded to past environmental shifts - for example, they incorporated ethics and social responsibility courses in response to corporate scandals - so let's hope they rise to the occasion this time.

It used to be that you could buy a loaf of bread with your reputation. The baker kept track of your daily order, and at the end of the week you'd pay for your purchases. Today you pay for your baguette upon receipt, even if it's your neighborhood bakery. Society has become more hurried and transient, making reputation all the more important. In this competitive environment, it's difficult to rise above the fray. If you consider individuals and companies that have succeeded, I'd wager the majority have stellar reputations.

  • Megan Page is a director at Morrissey & Co., a national reputation management and PR firm based in Boston.

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