“A good name is better than great riches,” a philosopher king said 3,000 years ago. That translates in a more market-savvy way to, “A good reputation is worth great riches.”
How? Because a corporation’s good name, its reputation, has value that generates profit. Conversely, as Volkswagen has learned, a hit to their reputation due to their “Dieselgate” scandal will cost billions of dollars in fixes and fines, thousands of jobs, and tens of thousands of lost sales.
The fact of the matter is simple. In most cases, you and I are most likely to do business with people or organizations we trust. And in a global marketplace where relationships can be fragmented and distant, trust is built on reputation in the marketplace.
In light of the Volkswagen scandal or other examples of poor morals and integrity that seem to pop up every day, is it any wonder then that people ask, “Can I trust this company enough to do business with them?” How often have you done business with a company whose products, services, or social responsibility turned out to be so disappointing that you vowed never to do business with them again?
What does a perception of ‘untrustworthiness’ mean to you? And your business?
The lack of trust also contributes to weaker ties between workers and the companies for which they work, which in turn has a significant impact on corporate profitability. How much? Well, in one survey of publicly-held corporations, the three-year total return to shareholders of trustworthy companies (as determined via in-depth surveys of corporate transparency and governance) was three times higher than that of the average (less trustworthy) companies.
When you add the loss of employee trust to unethical business practices, the response is natural. Shell-shocked consumers and business-buyers alike are taking a deeper, more measured look at a company’s reputation before making a purchase or investment.
Reputation Quotient (RQ) measures trustworthiness factors
The term Reputation Quotient (RQ) was coined by Dr. Charles Fombrun, Professor Emeritus of the Stern School at NYU and the founder of the Reputation Institute. Dr. Fombrun has done extensive research with companies around the world to understand the roles that their reputations play in their success. Fombrun and his group learned that the most successful companies all have one thing in common: Strong reputations, or high RQ.
Today, the concept of reputation measurement for business is broken down into six attributes, capturing the perceptions of all stakeholders: consumers, employees, and investors. Understanding its impact, RQ measurement is widely used by savvy businesses and pollsters alike.
- Emotional appeal
- Products and services
- Vision and leadership
- Workplace environment
- Financial performance
- Social responsibility
My guess is that Volkswagen would score pretty dismally right now in most of the above attributes. And it will take years for them to improve their scores. So, what can you do to avoid a melt-down like theirs, or improve your reputation in the marketplace?
Improving your RQ: Start with your message – and what you do to back it up
To some degree, reputation management is a science based on one simple concept: your stakeholders’ perception is your corporate reputation.
Knowing then that your reputation is a solid — and reasonably manageable — contributor to your bottom line, how do you build it up? Your reputation is based on the signals or message you send to your stakeholders. It’s not just the words – it’s all of the actions as well. And that includes your products and services, vision and leadership, etc. So, building your RQ can be approached as a three-step process to first identify, build and manage your message:
Step 1: Determine Your Message
In their landmark book “Positioning,” Jack Trout and Al Reis make the unassailable point that success is first and foremost dependent on knowing who you are and what you (want to) do that’s different from anybody else. Unearth your unique promise of value. Learn what separates you from your peers and is compelling to those who need to know about you so that you can expand your success.
This is, for many in the staffing arena, sometimes difficult. For example, all too often you (and more importantly, your customers) hear something like, “Our quality service differentiates us.” Does it now? Can you prove it? Do you have metrics that quantifiably demonstrate that quality?
The point is that you have the ability to prove your point of differentiation from every other staffing or recruiting firm that makes a similar claim.
Step 2: Construct Your Message
Build a communications plan to express your brand. Your brand position must be one that everyone within your company and every stakeholder – both inside and outside of your company – can and will buy into. Here, believability is all important. You cannot make claims you cannot substantiate in both word and action. Remember that your stakeholders will determine by their perceptions as to whether or not your message is true.
Then, identify the tools that you will use to communicate your unique promise of value so that you will become consistently visible to those around you. As a staffing and/or recruiting agency, working with human capital is your area of expertise. Use it. Leverage it. Integrate that expertise into every part of your message.
Step 3: Orchestrate Your Message
Manage your brand environment. Integration is the key here for staffing and recruiting agencies. You have to create and manage a single, consistent message that is repeated over and over again until the name of your firm becomes synonymous with the message you’re delivering.
This means that everything must work together. By everything, I mean everything that is remotely business related. That includes your advertising and public relations, products and services, contingent employee benefits, staff employee benefits, the vision of management, and community service programs. You must ensure that everything that surrounds you sends the same on-brand message.
While you’re working on building and maintaining your own reputation, it would be a good idea to look closely at the reputations of the customers and suppliers that you do business with. Determine if their reputational values are in sync with yours. This can help you from becoming entangled and pulled down through association with those that have poor reputations themselves.
Do it right, your firm will be known as THE staffing and recruiting firm candidates and customers will want to work with. Because you have a good reputation.
Do the right thing, and profit
A high Reputation Quotient is more than just highly desirable. It generates real profit through a strong, consistent and believable message that’s backed up by the actions of management and employees. Accordingly, developing and maintaining a high RQ should be a principal component of your business strategy.