A Reality Check For Corporate Reputation
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Holmes Report
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A Reality Check For Corporate Reputation

Corporations have a long way to go to maximize their reputation with an increasingly demanding public.

Holmes Report

Corporations have a long way to go to maximize their reputation with an increasingly demanding public according to the Global Corporate Reputation Index, which measured corporate citizenship and performance across 6,000 companies. For most companies, citizenship scores lagged in comparison to basic performance attributes such as quality and innovation.

The Index, which was based on 40,000 consumer interviews across six countries (Brazil, China, Germany, Japan, Russia, and the United States), indicates that companies have an opportunity to strengthen their reputation by demonstrating and communicating their commitment to the consumers and communities they serve.

The model is a new way to look at corporate reputation as distinct from brand. Core attributes like quality, service and innovation are scored to create a market performance indicator while personal attributes like caring, friendly and service to the community are scored as a citizenship indicator, with the two averaged to create the Global Corporate Reputation Index. But each brand has an all important measure across geographies – the citizenship gap, which shows whether issues are a drag on its overall reputation or not. The greater the gap, the greater citizenship issues can act as a drag on market performance. It’s a new concept and new way to measure and allocate corporate resources.

Of all the industries surveyed, the tech industry earned the highest overall reputation ratings, with consumers enthralled by their innovation and vision today. However, brand performance in the tech sector outranked citizenship 72 to 55. The 17-point gap is above average, is significant and suggests that unless the tech industry begins to aggressively address concerns about issues such as consumer privacy protection and answer questions being raised about manufacturing conditions of some technology products, the gap could get even worse and become too severe to be sustained by shiny new objects alone.

The banking and oil and gas industries received the worst reputation scores – they have the most remedial work to do on their citizenship and on performance. No surprises here. But, the Index also revealed that the apparel and accessories industry needs to do a lot more. Of the industries surveyed, it has the largest gap (19 points) between performance and citizenship, indicating the lasting concerns that consumers have about how the products are manufactured.

Different countries tended to have their different favorite industries. For example, in the United States, where many of the personal care companies included in the Index were based, the personal care industry had the highest average reputation score whereas the auto industry led in Germany and the tech industry in Japan.

And emerging markets like China tended to be very brand and reputation focused. The new middle class is likely to be even more focused on such attributes, making citizenship a global, not just a local, responsibility.

As one CEO said recently, in today’s world, doing well can be viewed as detrimental rather than successful, and that points out the ever growing need for companies to pay greater attention to their citizenship scores and the gap – even great innovation and performance will fail to count if companies don’t act responsibly enough on all fronts.

Mark Penn is the worldwide CEO of Burson-Marsteller and CEO of Penn Schoen Berland. The Global Corporate Reputation Index was conducted by Burson-Marsteller, Penn Schoen Berland, Landor Associates and BrandAsset Consulting.

 

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