What's the Value of a Good Reputation?

For businesses, organizations, people, and even governments

I have seven posts as working drafts, but this seems to be a more timely topic.

“Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing.” - Abraham Lincoln

Our food communication class mostly covered corporate communications, something intimately familiar to me since the first two decades of my career, but still interesting (for me at least, I cannot speak for the rest of my class) in the context of food businesses.

Reputation follows an organization’s Ethical Principles, often filtered — or distorted — by the organization’s communications program. Solid principles lead to a positive reputation. If you fudge on the principles, or if your communications program can’t overcome less-than-stellar principles, then your reputation slides.

For my business, Kakao Chocolate, we only use all-natural ingredients, which to us means no artificial flavors, colors, preservatives, or sweeteners. We also pride ourselves in “high-touch” customer service, which means we come out from behind the counter for every customer and offer them a sample, and to help them find the best confection they’re seeking. It also means that, for example, if an online order falls through the cracks, we make up for our mistake by shipping the package overnigh, even for Saturday delivery.

The graphic list accompanying this post is from Boston-based RepTrak, which conducts a complex yearly survey to measure and rank the reputation of large global businesses. It fascinates that a toy company leads the pack, and has for several years. The first food company — the German honey business Meile — doesn’t show up until #13, preceded by a bunch of luxury and consumer electronics brands. Miele (Germany); Barilla, Ferro, and Lavazza (Italy); and Danone (France) are the only food companies in the top 59. At #60 comes the highest ranking American food business, Kraft-Heinz.

RepTrak quantifies reputation in seven ways, which are important for any organization, including governments. I left the list in mostly the original RepTrak wording, and the italics are mine. Take a look, ponder them, and let me know how you think it might apply to something that might be recently in the news. Again, don’t just think about companies — also consider governments.

1. Products and Services: Quality products and services can profoundly shape a company’s reputation. This is a highly-visible area with which stakeholders arguably interact the most. If a company’s products and services fail to meet stakeholder expectations, reputation will be low, as will revenue.

2. Innovation: Where is your company heading? How does it evolve? Forward-thinking and creatively inspired companies are more highly regarded.

3. Workplace: Workplace culture has never been a more integral part of hiring and retaining talent. With unemployment at an 18-year low of 3.8% attracting the best people for the job is tough. Compensation packages, benefits, work/life balance, on-boarding and continued training are must-haves.

4. Conduct: Conduct measures your company’s ethical behavior, transparency, and fairness. Companies must be strong in this area if they want to consistently earn a license-to-operate by stakeholders, particularly regulators and policy-makers.

5. Citizenship: A company that scores high in Citizenship takes an active stand in making the world a better place, most frequently through environmental and social efforts.

6. Leadership: Leadership primarily points to the effectiveness of how a company is managed. Is its vision and mission clear? Is there accountability for when things don’t go quite right? Companies with CEOs who align with the company’s purpose outperform those who are less visible.

7. Performance: Although, perhaps surprisingly less important than some of the other dimensions of late (see Figure 2), numbers matter and performance and profitability are undoubtedly key indicators of reputation success.

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