THURSDAY 15 DEC 2011 1:56 PM
REPUTATION NATION
In a permanently connected world, a business might succeed or fail on the strength of its reputation. A new study with Lexis, The Recommendation Agency revealed just how important reputation is to UK business now. Molly Pierce reports
Reputation is at the heart of modern business. A recent transatlantic study showed that 99% of private equity professionals believe that an organisation’s reputation is directly linked to its commercial success, so Communicate teamed up with Lexis, The Recommendation Agency to look at the reputation of business and businesspeople in the UK, and how reputation functions in companies on a day to day basis.
We polled senior communications professionals to find out how reputational matters were perceived in their companies, and the results indicate that as important as reputation is currently, it’s only going become more relevant in the future.
The reputation of business within the UK is strong with analysts, politicians, and investors: the majority in each of these groups perceives UK business as good or very good. However, UK business doesn’t have a great reputation, according to our respondees, with consumer activists, the general public, charities and NGOs, the media, and trade union.
In particular, our survey showed that 47.1% thought that the media and other influencers would rate the reputation of UK business as poor or very poor. The media and other influencers were also cited as the most important driver of reputation, so that low rating becomes concerning.
The audiences that drive reputation – and the media’s place at the top of that list – also show that businesses can’t just concentrate their reputational efforts in one direction. The importance of maintaining internal engagement is illustrated by the third-placed ranking of e
mployees as reputation drivers, and customers (ie those who are directly interacting with the brand) are still more relevant than the public as a whole. Activism doesn’t come off well, either: consumer activists, trade unions, and charities and NGOs all place in the bottom half of the rankings.
The individual responses contributed in the survey on the factors influencing reputation also brought up the recurrent issues of transparency, particularly when it comes to the financial structure of business
es and senior staff. Greater openness on the subjects of executive remuneration, and sensitivity to the wider economic context, would greatly benefit the reputation of business in the UK.
The survey also looked at how opinions about business are cultivated at the moment, and how this might develop over the next five years. Currently, word of mouth dominates opinion-forming, with 52.9% finding it very influential, followed up by off line media platforms such as TV and print, which 41.2% found very influential. Almost 20% thought that annual reports weren’t influential at all when it comes to getting information and developing opinions about a business.
The forecast for influence in the next five years, however, showed that while word of mouth will remain at a steady level of influence, online media may overtake it, with 54% predicting that it will be very influential by 2016. Recommendations over social media will also flourish, while the ability of traditional media to form opinion may decrease.
Just under half of the respondents to the survey currently measure their company’s reputation, citing a wide variety of metrics that range from media and sentiment analysis to stakeholder research.
In terms of how business is valued in the UK, around 82% believe that its value to society is underestimated, and 72% think that it has become an easy scapegoat. In a recent speech given by James Thellusson, head of corporate affairs at Lexis, he suggested that if business were a public institution or a government department, it would be asking itself: “How can we make our public engagement better?”
The first step according to this survey is through education: 52.9% think that improving the understanding of business in schools would have a great impact on the reputation of UK business. True to results elsewhere in the survey, the idea of making sure that business was better reported on in the media could also improve UK business reputation.
In fact, this question demonstrates above all that greater visibility for UK business – through media relations, stakeholder dialogue, public figures to champion business and represent it at a policy-making level, and more investment in communications – could have a positive effect on its reputation in many ways. Reputation as a factor for successful business isn’t going anywhere: isn’t it time that you invested in yours?
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