Your company has no singly more valuable asset than its reputation. Yet because of its intangible nature, it is an often overlooked or side-lined one by managers more caught up with short-term goals like increased revenue, which can be easily measured and seen.
Paul Argenti, Professor of Corporate Communications at Tuck School of Business at Dartmouth, says companies need to be cognisant of what he terms their “reputational risk”.
Argenti says companies that communicate or take actions which are out of alignment with their stated mission and values are putting their reputations at risk. With brand trust at an all-time low, consumers – Millennials in particular – are looking for brands they can trust. Argenti urges companies to be authentic in their business dealings, to act according to their stated goals and values, even when it means taking a blow in the short term.
Think, for example, of recalling a widely sold faulty part, ceasing to sell a high-grossing product that has recently been proved to be harmful, or withdrawing from a particular market for sanctioning reasons. These actions may cost the company excessively in monetary terms, but long term they protect the values and reputation of the company, and their worth is therefore incalculable.
Argenti believes that companies can evaluate their reputational risk by answering the following two questions:
Once you’ve answered those questions, be directed by them in policy and strategy, even I the immediate cost or inconvenience seems high.
For those unconvinced of the value of placing reputational concerns above all others, consider the following pay-offs of having a strong, tried-and-tested reputation:
A final point from Argenti about safeguarding your brand’s reputation is to be careful what your executives and spokespeople say. Many companies have landed in hot water not because they are doing anything wrong, but because their communication has been misguided. In a world of social media where things can quickly go viral, you don’t want to speak flippantly, thoughtlessly, or speak out of turn, as the damage can quickly escalate outside of your control to contain it.
The adage “Say what you mean, and mean what you say” will stand you in good stead as a guiding principle for communications that will protect – even bolster – your reputation.