Who's Responsible for Your Company's Reputation?
A number of years ago some enterprising deal makers proposed a series of opportunities for a chain of funeral homes to their CEO. From a financial perspective, it looked like an attractive proposition: the terms were good, the demographics pointed to a growing market need, and the fragmentation of the industry suggested major opportunities for continued consolidation. When the idea was presented to the CEO however, he asked how the reactions would be if they would be perceived as overcharging a bereaved family. In his opinion, the deal did not pass what he called the "reputational smell test".
Today Toyota is suffering from a series of quality problems, which is especially devastating for a firm that has built its reputation on quality. These began innocuously as a concern about floor mats that jammed the accelerator pedals of certain models and then escalated into full-scale recalls of its most popular cars, a temporary shutdown of sales and manufacturing, and possible government fines and legal actions. As a result, Toyota's reputation has plummeted. Whereas two years ago, 80% of Americans saw Toyota as a company that built quality products, that figure now hovers around 20%.
Reputation is a "soft" concept that most managers and employees don't feel is their job to manage. Instead they view it as the role of senior executives, or of functions like corporate communications, marketing, advertising, or public relations. However if reputation is important to your company, then building and maintaining it may need to be part of everyone's responsibility. If that were the case at Toyota or BP, perhaps some engineers or designers or testers would have discovered and reported the problems before they came to life.
Nobody knows how much a reputation is really worth, although many would say that it's priceless. The one thing we do know, however, is that once a reputation is tarnished, it takes a lot of hard work, and a long period of time, to regain its shine.
- Our consultants provide council and advice, to help you manage all threats to reputation.
So how important is reputation to your firm – tell me, do YOU see it as part of your responsibility?
