We asked our reputation experts to share their thoughts on the state of the reputation economy as we transition into 2017. What were some of the highlights of 2016 and what can we expect in the year ahead?
Kasper Ulf Nielsen
Executive Partner, UK & France
Through the reputation research we have done over the past 20 years we have underlined the strong link between reputation and behavior, and this was clearly displayed by a number of reputation based decisions. The general public in the UK and the USA showed their lack of trust, respect, and admiration for the political establishment by voting to leave the EU and elect Donald Trump. They acted based on their emotions and added a new level to reputation management from a societal perspective. Companies, organizations, political parties, and governments need to build trust and respect with their citizens, voters, employees, and customers to secure the support they need to achieve the results they are looking for. And this requires a much better understanding of what these stakeholders expect and how they perceive you.
My prediction is that this trend will continue in 2017. Consumers, employees, citizens will continue this quest for more fair, honest, and transparent actions and communication. This will push companies and organizations to integrate reputation thinking into the decision making process.
Director, Nordics & Germany
Highlights from 2016 …
During the year, we have witnessed a number of shifts in reputation business practices. The majority of leading global companies seem to have understood the importance of measuring stakeholder perceptions, and the vast majority of them are now doing it, albeit in a variety of ways. The key challenge has been in moving to market-level integration of the insights, and using the outside-in perspective for actual course-correction in the strategy.
This has not been straight-forward because there is a lot of research in the market that is not really actionable – basically, historic reports with charts and numbers that are hard to interpret. Secondly, you need to have the appropriate forum internally in the company to process and act on the evidence. Thirdly, the insight is often not anchored in a concrete set of ongoing business problems or opportunities; the knowledge base is stand-alone in nature, and perhaps highly accurate as such, but without a strong link to the strategic ambitions of the company, it will remain under-leveraged.
The shift from annual studies to ongoing tracking programs is making a big difference to address these challenges. Those companies who continuously track and benchmark their reputation can better determine how to prioritize actions that have the most impact, and will know what matters most when it comes to act quickly and decisively in a crisis. This may not come as a surprise in today’s world, where social media has made it possible for news to travel around the world within minutes, and the perception of who you are as a company has a direct impact on sales, stock price, and license to operate.
What will the reputation economy look like in 2017 …
Historically, it’s been difficult to measure the positive financial impact of the corporate communications department, and therefore ask for more resources to do more. Generally speaking, CMOs have had more budget and more quantitative tools at their disposal than CCOs. We are seeing a substantially growing number of CCOs opt to use reputation scores to evaluate the effectiveness of their corporate communications initiatives.
One of the changes we foresee for 2017 is that reputation metrics will be much more widely used as proof points that corporate communications actually contribute to shifts in supportive behavior in the marketplace, thus the results of the company – specifically whether its key stakeholders intend to buy the products/services, recommend the company, invest in the stock, work for the company, and give it the benefit of doubt in case of a crisis. Also, more global companies will be adopting these soft metrics to gauge the performance of the C-Suite beyond hard dollars, specifically rational and emotional reputation dimensions, attributes, or a weighted index thereof.
With a robust and actionable reputation tracking programs in place, the CCO can establish the necessary credibility at the executive team level as a business strategy advisor. There is a unique chance emerging for senior communications officers to elevate their role and contribute to the corporate agenda and decision-making, taking a fact-driven approach to provide that guidance.
The ground-breaking political events of 2016, led by Trump’s election to the US presidency and the UK’s decision to leave the European Union, have served to re-inforce the power and importance of reputation. Events like these demonstrate the need for politicians and companies alike to listen closely to the expectations of their stakeholders, and to communicate with a firm degree of authenticity. In the corporate world, we’ve seen the power of reputation influencing the downfall of leading British companies like Sports Direct and BHS, but also supporting the progress of other major brands like Aldi and IKEA.
In 2017 we should expect to see a greater focus on corporate governance and fairness in business. Movements like Stop Funding Hate will gather pace, and companies will need to respond to these pressures to maintain their authenticity. In an increasingly polarized economy, the debate over corporate tax and executive pay will move from words to deeds. Those companies that take the lead in tackling perceptions of corporate greed could find a stronger reputational platform as a result.
For communications and marketing leadership, having your pulse on stakeholder needs and expectations has never been more important, especially as global brands compete for mind and wallet share on social channels, and consumers and investors increasingly look at corporate behavior aka CSR as a reason to buy or not. This is why reputation data and know-how is foundational to brand and product strategy. And why our RepTrak system is being used more and more as an approachable framework for both viewing and managing stakeholder insights across all channels.
For these reasons, 2017 is shaping up as the year when brands double down on getting a “whole view” of stakeholders and look to turn all the information they are collecting (from both big and small data sources) into more actionable insights that inform executives decisions as well as the “everyday work” of front line employees. This means not only new investment in services and tools to facilitate data blending, but also new techniques for wiring up existing programs to show how they boost visibility and drive business impact. The result: better insight that can lead to better consumer experiences, more engagement, more feedback – and ultimately more innovation.