Paul Holmes 17 Jan 2011 // 2:30PM GMT
Risk communications guru Peter Sandman has an intriguing essay (which I probably should have linked to earlier) on corporate reputation, which turns out to be one of the most important things neutral members of a community think about when considering whether they approve or disapprove of proposed new mines, factories, etc. That’s shouldn’t come as a surprise to public relations professionals, but Sandman’s way of thinking about reputation might. He starts off summarizing the majority of the literature on the subject: “Just about everything I have read about reputation assumes that it’s a single variable. It has components, of course: how trusted, admired, or liked you are; your products and your customer service; your environmental and social performance; etc. But these components can all be summed into a single dimension, where good reputation is on one side of the scale, bad reputation is on the other side, and zero is in the middle.” We’re all familiar with the “trust bank” metaphor: “Events that damage your reputation are withdrawals. Events that improve your reputation are deposits. Reputation management means making sure deposits exceed withdrawals.” So far, so familiar. But Sandman is not sure that reputation works this way. “I don’t buy it,” he says. “I think organizations (and individuals) are much better off conceiving of ‘good reputation’ and ‘bad reputation’ as separate variables.” Companies—WalMart is an obvious example, and one he cites—can be both loved (by those who welcome low prices) and hated (by those who worry about social impact), and increasing the love (by lowering the prices further) may only exacerbate the hate (the more successful company may have even more of an impact on the community). His conclusion: “Reputation management, in short, is two jobs: trying to be more loved and trying to be less hated.” (Actually, his conclusion is that it is more than two jobs, but to learn more about that, you really should read the entire article.