This document discusses how companies are increasingly linking executive compensation to reputational performance in order to hard-wire reputation into the core of business operations. It argues that reputation management needs to go beyond risk assessment and messaging to proactively improve reputation through actions and behaviors. Regular quantitative and qualitative research with stakeholders is needed to understand a company's reputation and integrate reputational metrics and goals into business planning and decision-making. Tying reputational scores to pay will help ensure reputational issues receive sufficient attention from company leadership.

1. Hard-wiring reputationperformance into the business
The commercial value applied to reputation is leading companies to
adapt their business models and link remuneration to reputational
performance
When it comes to reputation management, good practice has traditionally
involved understanding and assessing the reputational risks, monitoring the
media and planning and preparing for potential issues and crises which may
emerge. This tends to involve messaging, scenario planning and media
training.
All very important, but the emerging consensus is that reputation
management should go a decisive step further, demanding a more proactive,
less defensive approach. Indeed, the term reputation management should
perhaps be discarded and replaced by reputation improvement.
It is generally agreed that a company’s reputation is judged primarily through
its actions and behaviours, and not through words alone. There is also a
discernible shift with companies moving from a shareholder to a multi-
stakeholder approach. It follows then that reputation management must be a
corporate discipline, sitting at the heart of the business, and not on the
periphery as the sole responsibility of one of the functional departments, be it
risk, compliance, CSR or communications. Reputation management has to be
a shared responsibility and goal across a company, requiring buy-in and
leadership at the most senior level, if it is to be successfully embedded in a
business. Sophisticated advertising and marketing will only go so far.
To manage your reputation effectively, you first have to understand it. If
reputation management is to become a core discipline for a company, then it
has to conduct regular research, quantitative and qualitative, with all the
stakeholders who help to shape its reputation and have an impact on its so-
called licence to operate. These aspects should cover a range of topics and
could include consideration of an organisation’s products; its ability to
innovate; its strategic intent; the quality of its management team; the level of
customer service; its culture and ability to develop its people; and its focus on
sustainability.
Such research should complement and not duplicate any research already
being undertaken by organisations, be it investor feedback, shopper
questionnaires or employee surveys, and should be supported by competitor
and industry benchmarking and regular tracking of an organisation’s
reputation within both traditional and social media.
The delivery of robust metrics around a company’s reputation is critical.
Actions and decision-making to do with its reputation need to be supported by
data, not hunches. It makes for more informed debate and discussion around
the boardroom table and difficult conversations are best handled when
backed up by statistics.

2. Once metrics are available and deemed to be sufficiently robust, it is
important that these become integrated in to the business planning cycle so
that reputation actions and key performance indicators can be factored in. In
this way, reputation management becomes an active management tool. Too
often, companies spend time and money on commissioning research reports
around reputation, for them to gather dust.
A signal that reputation is becoming fully embedded is when reputation is built
into the company’s business model and reputational performance is directly
linked to remuneration. When people know that reputational scores can affect
their pay, reputational issues quickly receive more attention.
There is no silver bullet to all this, but if a company’s leadership team accepts
that reputation holds real intrinsic value, is committed to improving its
reputation, and a sensible measurement dashboard is adopted, real progress
can be made – with big commercial benefits.
Ben Morton is a co-founder of SIFA Strategy. He is a former Vice President of
Communications at the Carlsberg Group, Director of Communications at
Heathrow Airport and a Director of Communications at CDC Group.
For more information, please visit our site at www.sifastrategy.com