Last week we addressed the relationship between trust and sustainable business. Great dialogue followed. This week, and in light of the latest News Corp “news,” we decided to add an additional factor into the equation- reputation. We asked several experts to comment and received some thought provoking answers from a variety of macro/micro, stakeholder and philosophical perspectives.
We asked the following question: How do you view the relationship between corporate reputation and trustworthy business practices in the context of sustainable business? Is this a chicken and egg issue?
First the macro perspective…Dr. Leslie Gaines-Ross, Chief Reputation Strategist at Weber Shandwick believes that
The bedrock of corporate reputation is trust. Trust is the oxygen that allows reputation to exist. Without it, reputations would suffer.” Trust is all about credibility and without credibility, reputation does not stand a chance of being built. Today, reputations are built on the belief that a company will do the right thing, treat its employees well, build safe products, deliver on its promises and will be well governed.
Next, two similar stakeholder perspectives…According to Elliot Schreiber, the President and CEO of Brand and Reputation Management,
Reputation is a stakeholder's expectation of value vis-a-vis an organization's peers and competitors. Each stakeholder has different expectations of value. For example, employee expect, among other things, a good workplace and fair compensation; a customer expects a product or service that is considered "worth what's paid for;" and an investor expects a good return on their money. By promising and meeting expectations over time, the organization builds trust with its stakeholders. The more organizations differentiate their value with their various stakeholders versus competitors, they build a trusted relationship that creates both a barrier to competition and a hedge against reputation risk should a crisis occur.”
Following a similar theme, Linda Locke, Principal at Reputare Consulting views the relationship between reputation, trust and sustainable business as follows:
It’s been said that executives have two jobs - to grow revenue, and protect reputation. Those focused on reputation must feel like Sisyphus -- except they are pushing uphill against an avalanche, the rock is orthogonal, and their backs aren’t what they used to be.
Reputation isn't about PR and marketing - it's about the business decisions that impact stakeholder perceptions. If stakeholders feel the company does not have their best interests at heart, they will stop trusting the company, and ultimately stop doing business with it.
Trusted organizations can attract better business partners, drive premium pricing, hire top employees, and may get the benefit of the doubt in a crisis. They are more likely to have the freedom to operate in the way they choose. And, their business is more likely to be sustainable through good cycles and bad, because their stakeholders trust them.
And finally, Charles Green, the Founder of Trusted Advisor Associates adds a philosophical perspective-
Sustainability drives Trust, which in turn drives Reputation. Reputation alone won't drive trust, because without a deeper foundation, reputation is just notoriety. It's the repeated experience over time of good practices that starts out with good reputation, but then grows into trustworthiness. And--in the long run, over time, with repeated practice--a firm that consistently does the "right thing" is a firm that is operating on a sustainable basis.
In the long run, a paradox emerges: the firms that succeed and prosper are not those who made it their objective to succeed and prosper: rather, it is those who set out to behave in a sustainable manner. Success and prosperity are best achieved as byproducts, collateral results, and secondary outcomes: service to a broader cause ultimately drives not just trust and reputation, but success as well.
Do you agree with the expert opinions above? Let us know what you think.
Barbara Kimmel is the Executive Director of Trust Across America www.trustacrossamerica.com. Her organization is setting standards for trustworthy business behavior. Share your thoughts with her at firstname.lastname@example.org.