Best practices to implement in your organization
In a climate where true product differentiation is difficult, the regulatory landscape challenging, global partner ecosystems vulnerable, and the pressure to hire high-potential talent intense, a company’s reputation is increasingly recognized as a business asset that is central to maintaining and growing business value.
Despite this recognition, however, corporate competencies around reputation measurement often lag. Even executives with sophisticated and smart market research portfolios find themselves asking, “How do you measure corporate reputation?” With a practice dedicated to helping clients understand and manage their reputational equity and risk, Nielsen has identified a number of best practices in reputation measurement.
Driving Business. Like any asset, reputation should be measured and understood relative to your company’s business goals. Long term, reputation measurement and management are most effective when reputational equity and risk are clearly linked to business outcomes of business-relevant stakeholders and their specific, measurable business-supportive behaviors. In these organizations, the stakes are recognized as too high to measure reputation in order to simply work toward a higher rank or score. Scores provide good rallying cries, but have far more gravitas when they meaningfully link to where the company is going.
This means that any measurement instrument (and potentially the research design overall) will necessarily evolve, as refreshed business plans require the company to understand reputation in new ways, and as there is a change in the answer to: what do we need our reputation to do for us in the coming year? Companies with the most effective reputation measurement programs avoid nostalgically trending last year’s carrot and instead allow the metrics to evolve to match their goals.
Linking reputational equity and risk to real, current business plans activates the C-suite and creates powerful relevance across global operating teams. We understand the human inclination for a score, but the most successful reputation managers compel their organizations to drive their number because of its clear ability to impact their own shared success metrics.
Broad Stakeholder View. Most market research has a clear stakeholder in mind, and clear questions like: “How can we convert non-customers?” or “How can we improve our relationship with distributors?” Reputation measurement, however, requires a company to consider—even if only for a moment—all the stakeholders across its reputational landscape.
There are many stakeholders with the ability to impact a company’s license to operate, and from a practical perspective when it comes to reputation measurement, there are often too many. With company goals as a backdrop, early measurement design discussions should work to prioritize stakeholders to identify the most important subset to include in the research. When it comes to stakeholder selection, there are many practical considerations worth discussing with a seasoned measurement partner—one fluent both in conducting research among elite stakeholders and in common pitfalls companies face. Together, a collaborative discussion can identify a design that brings together what the business needs (goals, current stakeholder relationships, etc.), what the business can handle (real assets in place for implementation, real appetite for data, stakeholder owner engagement internally, etc.), and what makes sense (feasibility, timeline relative to planning cycles, cost, etc.). When it comes to stakeholder selection, organizations with best-in-class measurement programs rationalize what is ideally measured with what makes sense for their internal assets and climate.
Avoid being a company that only measures its reputation among the general public when the core challenge its reputation must support is the intensifying permit-related restrictions in key communities where it has operations. Although the public’s view is interesting and likely actionable, understanding reputational equity and risk among community influentials, for example, could be a worthwhile complement in order for the findings to inform the business’ core growth challenges.
Their Lens, Not Yours. Reputation measurement must take into account the truism that each stakeholder evaluates your company’s reputation through the lens of what matters to them. Likely, there are things you take pride in about your company, but it is likely (very likely, in fact) that these are not the things that drive your reputation in the eyes of your stakeholders. A regulator’s lens is different from that of an investor or prospective future talent… and all are different from your own. This means that the measurement program must be designed with the appropriate breadth that would allow it to identify the lens through which they evaluate you according to their yardstick.
So although it may be tempting to simply do a deep-dive study on whether your company is seen as innovative, for example (if this is what your company and its employees actively strive for each and every day), a better reputation measurement plan is to understand the impact of a broad range of dimensions that could drive your reputation, one of which is innovation. The same can be said of ethics, which are, of course, important to a company’s reputation. Although ethics are increasingly a driver of reputation (particularly in emerging markets, where how a company engages with society is highly important—even more so than how it performs and delivers), framing the analysis through a broader set of dimensions is essential to allowing the stakeholder’s own lens to be reflected.
We have seen specific instances where, in one world area, ethics was primarily about transparency, where in another, it was dominated by themes of community engagement. For some other stakeholders, it would not be a key driver at all and could most productively impact business relationships if framed via the language of thought leadership or a strong executive team, for example.
A range of reputation dimensions are important to include in a measurement program, but how each is brought to life in the research instrument will (and should) vary significantly by industry and by stakeholder, and should reflect a company’s own unique history. The framework of reputation dimensions offered here is useful and based on years of reputation measurement, yet there is surely not a one-size-fits-all list. Best-in-class reputation measurement programs that take into account a broad range of reputational dimensions have the necessary stakeholder relevance and deliver true, contextual actionability.
Setting Priorities. Reputation measurement analytics should give the gift of focus to reputation managers. By delivering a concise and actionable view of what drives your reputation (in the context of real business plans, for a specific stakeholder, in light of what matters to them, to lead to the behaviors you need), reputation research should shine a bright light on where resources should be allocated and how existing programs and initiatives should be nuanced to best lead to successful stakeholder relationships.
Smart analytics that identify areas with the greatest potential to amplify reputational positives and neutralize negatives should be a key outcome of all reputation measurement. Without the focus this affords, the broad range of issues measured becomes a laundry list at best, and paralyzing at worst. Weak performance on any one dimension of reputation, for example, only elevates to a priority if that dimension is a significant trigger for a stronger reputation. For effective companies with a mature reputation management competency, the analytics that are part of reputation measurement are socialized and internalized, becoming far more than a messaging platform. They become a filter for business decisions around resource allocation, communication planning, operational investments, training, and so forth.
Organizational Readiness. Optimally, measuring a company’s reputation requires notable engagement from across the corporation. Although often it is corporate communications or a similar team that spearheads activities, work like this can’t be done effectively in a silo. This holds true at the front end relative to reputation measurement and the back end relative to reputation management.
There are many reasons why this is the case. Reputation is owned by a wide variety of individuals and functions across any corporation, including the Board of Directors and a variety of senior executives whose daily focus is on stakeholder relationships (investor relations, government affairs, supply chain leadership, etc.). Executing action plans requires engagement from communicators and operational teams around the world, and often, a cast of agency partners makes valuable contributions to this process. Add into the mix the benefit of leveraging research from disparate parts of the organization (customer loyalty, media/social metrics, HR surveys, syndicated studies, and so on) and the need to work beyond traditional silos becomes readily clear.
This is a tall and often difficult order for many organizations to fill, and rarely is collaborative nirvana even probable. As one might expect, that’s just fine. A few patterns are evident in the corporate environments that are the most effective for reputation measurement and management, and these provide a few useful guardrails:
- There must be an executive sponsor. The most challenging context for these activities is when there is a lack of visible, real engagement by the C-suite. Reputation management must be endorsed from the top.
- Some organizations move quickly, digesting information, developing strategies, and implementing plans. Others take longer to move through this cycle, with consensus sought at various points. The right cadence and timing of measurement must align with practical appetites, yet still inform key planning calendars.
- The efficacy and impact of reputation measurement greatly benefits from the input of a cross-functional team. Reputation Advisory Councils or the like—entities that can be efficiently tapped at defined and time-bound points during research and action planning—work well in many environments. These venues give broad teams a voice in the measurement process, often organically resulting in members becoming ongoing advocates for the company’s reputation management efforts across their diverse roles and activities.
Measuring corporate reputation effectively delivers actionable strategies to corporations in order to proactively manage one of their most important assets and points of risk. This enables research-based decisions to inform what can otherwise be an amorphous or historically “program-driven” discipline. This is a productive and pivotal time for the practice of reputation measurement, as companies around the world seek to align their research insights portfolio with the recognized importance of reputation in maintaining and driving business growth.