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Hanover - Uncertain Times Require Uncommon Sense

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15 Jan 2019

It is regularly said that we live in an era when businesses are more closely scrutinised than ever.

This may be true, but it is relevant only in the sense that business must expect and prepare for scrutiny when setting a strategy.

Reputation is a driver of commercial success. Clearly, the very top of any organisation needs a clear idea of the role that reputation will play in the successful delivery of their strategy.

How can it be a catalyst for success? What is the risk?

Smart CEOs will increasingly establish reputation as a metric within their organisation, and track it.
Yet many organisations do not track reputation in any meaningful manner.

These organisations are more likely to be caught unawares when they find themselves suffering the consequences of a ‘reputation gap’.

This occurs when the impact of a business’s actions is not perceived by consumers, stakeholders, policymakers or regulators to match the stated intent of that business.

Put simply, key audiences are left thinking that the business is saying one thing and doing another.

There are three key things to consider here.

First, businesses are large and complicated organisations – each one will have issues that they are dealing with. A reputation gap is about perception of intent.

Second, this brings us back to the scrutiny that businesses face.

Of course, a CEO will face pressure on quality and competence – and rightly so – but in today’s world, what is increasingly under scrutiny is a company’s values.

Business values have historically been a fluffy afterthought, dreamed up in a workshop many floors away from the CEO’s office and put onto a poster somewhere near the HR department, to be forgotten.

Today, they shouldn’t be.

Perceived values are the lens through which audiences judge the intent and impact of a business’s actions.

They need to be articulated and understood through the business at all levels.

Third, these values therefore cannot be distinct from action if a business is to narrow its reputation gap.

Now that applies most obviously to direct actions – do not promote yourself as a responsible employer while sourcing your products from a sweat shop – but also, increasingly, through company culture and individual actions.

For CEOs and other business leaders, this means recognising that in today’s world, their personal behaviour can have a major impact on their business’s reputation and therefore have a significant impact on the long-term success of that business.

The vast majority of industries will no longer accept the type of CEO that ran the business as a personal fiefdom, one where common rules of decency or respect did not apply.

We’ve all seen several examples of this recently, expect more to follow.

For communicators, it means that to give our best counsel we need to be helping to set and communicate business values through all that we do. And to do so effectively, given the above, we must be immersed in business objectives and strategy.

If we do not know this inside out, we cannot ensure that our communication best serves that strategy – deploying reputation as a catalyst for success, minimising risk and driving better business practices.

Gary Cleland is deputy managing director, corporate at Hanover

This article was originally published in PR Week.