Welcome to the first installment of our Reputation Blog! With this virtual space, we are hoping to bring together a community around us ‘reputation groupies’ to discuss a wide variety of reputation-related topics. To spur our collective thinking, I have already invited some leading practitioners and academics from around the world to post their thoughts and reflections about reputation matters. I hope you will be as enthused as I am about joining our online community. All you have to do is to subscribe to the Reputation Blog and stop by as much as you want to react to others and to share ideas, articles, links, and comments with us all. Only through your ongoing participation can we make our increasingly visible and important world of reputation thinking come alive. In addition to subscribing to this Reputation Blog, let me point out that you can also sign-up for our ‘Reputation Institute’ groups on LinkedIn and Facebook. These three forums will provide you with easy ways to interact with a broad range of people interested and involved in improving our understanding of the reputation challenges facing individuals, companies, and institutions around the world.
When I first started thinking and writing about reputations over 20 years ago, I had a gut feeling that it was a topic that would have some longevity. Little did I know then how vital the topic would turn out to be! Since then, like you I’ve watched a global crisis of public confidence develop that has been spurred by the collapse of Enron in 2001 and the disappearance of Arthur Andersen in 2002. Countless reputation-damaging scandals have swept over the corporate landscape dragging down once admired names like Worldcom , Adelphia, Tyco, and Global Crossings in the U.S. to Vivendi, Parmalat, Shell, and Northern Rock in Europe, Satyam in India, James Hardie in Australia, and the milk producers of China. And they all helped to further lower public trust, damage local communities, and destroy economic value for millions of investors. I felt confident then that reputation was a topic of study that was surely here to stay.
And it sure was. If we thought we’d hit bottom with the corporate scandals of the new millenium, boy were we wrong! Since then, a host of pharmaceutical firms, energy companies, banks, and automakers have willy-nilly had their backs put to the proverbial wall and amply shown how misguided they are as custodians of the reputation capital entrusted to them by their shareholders. Not only have they squandered market share and market value through misguided actions, but they are daily losing mind share with the public as one after the other flaunt their inability to understand the importance of stakeholder perceptions to their market value. The latest bonus scandals in the US at Merrill Lynch and AIG are just a symptom of it –and what a disregard for public opinion their senior managers have demonstrated!
In the end, these corporate scandals are just the tip of an iceberg. That iceberg is gradually surfacing as we observe the collective arrogance, hubris, and lack of understanding that senior executives around the world are demonstrating about the value and management of corporate reputation. Their ineptness is the primary reason for the crisis of public confidence we are experiencing in our institutions today, and it’s the principal reason we are in a global recession that has destroyed an estimated 20% of the value of our global assets to date.
It’s my honest belief that only by inculcating sound principles of reputation management into future generations of managers can we come out of it. New professional standards have to be developed in our business schools and universities, new models of organizing must recognize the fact that the tail does not wag the dog –it’s not financial capital that brings people into companies, its people who pull together financial capital to create economic value for society. Until that model reigns supreme in the minds of our leaders, our institutions will forever be at the mercy of the basest of human instincts –greed.
What do you think? What will it take to restore trust in our institutions?
