Reputation is a relationship capital

Scholars and practitioners continue to grapple with the concept, issue and practice of reputation management. Many have questioned whether it is important in organizations whose primary goal is a healthy bottom line.

During my past three decades of managing reputation – sitting in board discussions and senior management meetings, reputation has certainly attracted an increasing attention. And in those years, more and more senior executives are placing value and importance to having a good reputation.

There is a growing acceptance that reputation may not be identified, yet, as an asset in annual reports and balance sheets but it affects investor confidence, employee attraction, supplier behavior, regulatory attitudes and a myriad of stakeholders. While not yet an official entry to the income statement, reputation has already elevated its stature in the hierarchy of corporate objectives as a relationship capital.

At the core of this relationship capital is the organizations’ ability to create and sustain strong relationships with stakeholders and its community. This is where and how organizations achieve corporate, business and societal goals – by improving the lives of people while sustainably operating businesses.

Reputation built on mutually beneficial relationships with stakeholders is the necessary condition for building, maintaining and renewing resources, structures and processes over time, as organizations can access critical and complementary resources through the relationships.

Indeed, reputation is fast becoming a license for organizations to operate.

However, not all executives understand that managing reputation is about “control” i.e. the reputation of any organization is truly impacted and influenced by its performance, behavior, policies and people among others but, ultimately, it is its stakeholders, audiences, consumers who decide what the reputation of the organization actually is.

What we must all remember is that reputation is a fluid tool that needs to be managed well. A good reputation is earned through hard work and built over time but it can be quickly lost through misfortune, incompetence, missteps among others.

I spoke to some senior executives about their thoughts on reputation management. Mr. Kishore Hemlani, founder of Faberco Life Sciences Inc., said that reputation is important because it compels and motivates his company to do what is right all the time. He said keeping one’s reputation requires authenticity that is grounded on corporate and moral values his company stands for.

For her part, Ms. Cathy Salceda Ileto, VP for corporate communications at SM Retail Inc., said that a big part her purview as public relations and reputation management executive is to make sure the brand of the various organizations she worked with in SM is valued and recognized in key circles and in communities where they have presence – creating a positive impact across the various stakeholders inside the organization and even beyond their spheres of influence.

Mr. Suiee Suarez, VP for reputation management at Aboitiz Power, said the ultimate measure of reputation is trust. To ask how important is reputation, is to ask how important is trust to a person or a company. The tricky thing about trust, according to Mr. Suarez, is that it has to be earned, and it has to be nurtured.

Indeed, as all these senior executives stressed, a robust corporate reputation is valuable to all organizations – a reputation that embodies integrity and generates trust among consumers; strengthens presence in industries; appeals to high-quality job candidates and improves employee retainment; protects your brand during times of crisis and attack; and fortifies a strong positive image to vendors, suppliers, and partners to achieve partners-of-choice status.

*Ron F. Jabal, APR is the chairman and CEO of PAGEONE Group (www.pageonegroup.ph) and the founder and president of the Reputation Management Association of the Philippines (www.rmap.org.ph)