Reputation Institute: CMOs can better quantify reputation metrics than CCOs

Corporate communications leaders still find it difficult to measure the impact of their work, according to new research from the group.

Reputation Institute: CMOs can better quantify reputation metrics than CCOs

NEW YORK: Large companies that put their brand management in the hands of the CMO, rather than corporate communications officers, can better quantify reputation metrics, according to research released this week by the Reputation Institute.

CMOs generally have more quantitative tools at their disposal, which they use to determine where the company’s reputation weaknesses are. Companies that put their corporate reputation management in the hands of the CMO end up with better metrics, more tools, and a voice with the C-suite, said Brad Hecht, VP and chief research officer at the Reputation Institute.

Conversely, CCOs often find it hard to measure the impact of their work, he added.

"They can’t prove to their CEO that they’re doing a good job," Hecht said, translating into less attention from the top and fewer resources to measure and manage brand reputation. "Having a measurement in place would help them go to the CEO for resources."

The Institute reached out to 150 communications executives in 20 countries for the survey to find out what they’re doing to manage and mitigate reputation risk. It conducts a similar survey each year to study how the general population feels about the reputation management efforts of major companies.

When asked what business activities reputation executives are most involved with, 77% said corporate narrative, followed by (67%) crisis management, (64%) reputation risk assessment, and (63%) the CEO’s reputation. Corporate branding strategies (60%), issues management (57%), public affairs (51%), and CSR (51%) were also top responses.

Asked how ready their company is to manage reputational risk, fewer than half of respondents said it has (49%) "internal competencies to identify and anticipate the key reputation risks" or a (45%) "well-established structure for addressing and mitigating key reputation risks." Forty-five percent said it has a "cross-functional governance structure to manage the key reputation risks."

Hecht added that CCOs who oversee reputation management often have a seat at the table with other C-suite executives. He added that in Europe, reputation management is included in company quarterly financial results, but is regarded as an intangible in the U.S. However, recent corporate crises make it clear reputation management is real and has impact.

"Volkswagen was fascinating," Hecht said, noting that the lead story on CNN’s homepage the day the crisis emissions story broke was that ratings agencies had downgraded the company because they perceived an erosion of corporate reputation. "More than two thirds of the reputation of a company has nothing to do with the products and services."

He added that attributes like the perception of a company’s workplace environment, governance, whether it is open and honest, transparent, perceived as ethical, and if it has a positive societal impact are increasingly important.

"Those attributes have consistently increased in importance since 2007," Hecht noted. "What’s happening is it’s not enough to be a good product provider. The expectation is that you’re also a good company."

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