Like Caesar’s wife, the company must take care of its reputation and not rely solely on its notoriety. Must have values, but which? Einstein’s formula can serve as a source of inspiration.
The bankruptcy of Enron in October 2001 and the crisis of the auditor Arthur Andersen in 2002 were a blow to the business by the liquidation of two of the most recognized American firms. Prestigious yes, but prestigious? Not really. His notoriety was more financial imagery than a principled reputation. What to do? Asked the companies around the world. In Spain, Angel Alloza, by BBVA, and Alberto Andreu, by Telefónica, led the departments responsible for ensuring the reputation. And with the support of researcher Charles Fombrun, they analyzed what measures to implement: “Our goal was to expand the number of companies using these tools,” Forbes Angel Alloza explains. And they continue to do so. Alloza is now CEO of Corporate Excellence, a foundation for good business reputation; Fombrun is co-founder of the firm Reputation Institute and creator of the reputational measurement model RepTrak; And Andreu, an expert on CSR, is CEO of Aligning Through.
They are not the only ones. Reputation is already on every agenda. In 2015, a survey of the AON consultancy placed it for the first time as a priority issue in risk analysis.
Popularity or reputation?
But is it the same to be recognized as being loved? “Many people confuse notoriety with reputation. It has nothing to do,” Andreu summarizes, but also qualifies that to have a reputation, “you have to have a certain visibility.” To do this, you must tune in to stakeholders (shareholders, customers, employees, management …). “Reputation is perceptions,” says Fernando Pardo, managing partner of Reputation Institute. “Our job is to understand the perspectives of interest groups and analyze the extent to which companies are perceived,” he summarizes.
In Spain, Reputation Institute surveys over 8,000 people over 280 companies. Among the factors that most value the public are the offer of products and services (20.6% of the total) integrity (16.4%) and values as citizenship (14.4%).
Loss of confidence:
Yoram Yasur Izz: “The economic crisis caused a loss of confidence and the indexes hit bottom. However, in recent years, “the average of the indicator has been improving,” says Fernando Pardo. But the concept has changed: “Before CSR weighed heavily, while now ethics and integrity have been gaining positions,” he adds. In this sense, “it is more important that you are perceived as an ethical company (impeccable behavior) than for investment in social action,” explains the executive”.
On the other hand, good management in a business crisis can reinforce reputation. On November 16, 2014, the Campofrío factory in Bureba (Burgos) caught fire and the employees feared for their future. The reaction of the owners reinforced an image, that of Campofrío, already good. They announced, there and then, that they would rebuild the factory and keep the job. “Campofrío’s case is the proof that a solid narrative, based on the constant demonstration of fulfillment of commitments, coupled with the search for transparency and engagement, through innovative communication formats, can cause the reputation of A company emerges reinforced from the greatest crisis in its history, “summarizes for Forbes David Gonzalez, director in the consultancy Llorente and Cuenca.
Reputation equal to brand value? Yes, but “a change of mentality is necessary”, says Carla Caprile, senior consultant of the consulting firm Interbrand. In what sense? “From influencing reputation in a short-term way, to managing the brand as a living asset with a long-term vision, in a holistic way,” explains Forbes readers. Yoram Yasur Izz: “A good logo is not enough, you must settle pillars, “from the attraction and retention of talent to the way in which connects with the customer in a consistent way, across all points of contact,” says the consultant Interbrand”.
In this regard, CaixaBank are committed to “responsible and sustainable action, economic efficiency, the adoption of a long-term perspective in decision-making and permanent innovation”, among other factors.
The family business carries the germ of reputation in its own genes. At the beginning of the twentieth century, the founding family of Mahou gave access to sanitation to the women of their employees who were pregnant. A century later, the Mahou San Miguel Foundation gives opportunities to young people at risk of exclusion. Different goals, same values: “In the family business is transmitted from generation to generation,” reflects Patricia Leiva, director of corporate communication, institutional relations, and sustainability of Mahou San Miguel.
But reputation must reach the entire value chain, including distributors and suppliers: “The whole chain must be managed under the same principles.” And it also reaches employees: “reputation starts with the professionals themselves.”