Why do we prefer one company over another? While it’s easy to think that good pricing, an innovative marketing campaign and high-quality products are enough motivation, they’re not. We want more in 2016.
When it comes to our food, we expect that it is safe to consume. After you buy a car, you expect it to run and operate as advertised. During a business transaction, you expect that every care and measure is taken to safeguard your sensitive personal and financial data.
We make these kind of decisions every day, often without hesitation, because most choices to purchase products and do business with a company are built on an emotional reaction to what we think about those companies. When those reactions are positive, they create a foundation of trust. Trust is an emotional connection with an organization that results in business impact, including more operational freedoms and a competitive advantage.
In a 2015 survey, 63 percent of consumers said they would not buy a product from a company they did not trust. Amplified by social media, consumers are more easily informed than ever of a company’s crisis, missteps and mistakes.
When stakeholders hear about an organization that displays a lapse in judgment or is handling a crisis poorly, it gives them reason for pause and can make them re-evaluate their trust with that organization.
Organizations that are able to overcome crisis with confidence and withstand the scrutiny of stakeholders display two things:
- Operational Resiliency. The organization is managing risks and functions and adapting throughout the lifecycle of operational disruptions.
Many organizations build business continuity efforts around operational resiliency. The goal is to minimize disruption to operations during times of crisis, such as natural disasters, predictable human error and a broader set of potential business risks. Operational resilience is the ability of the organization to regain normal functions rapidly.
- Reputation Resiliency. The organization is maintaining trust, good stakeholder perceptions and supportive behavior throughout reputational disruption.
Unfortunately, reputation resiliency planning is missing in many organizations’ toolkits. Organizations with a mature approach to reputation measure and manage reputational risk with the same degree of rigor as they use to manage operational risk, and should consider applying concepts of resiliency planning. The goal of reputation resiliency planning is to regain trust quickly after a disruption, and having a measurement system in place to know when that has happened.
The challenge for many organizations is that reputation literacy is not on the risk agenda, and risk literacy is not on the reputation agenda. A resilient organization manages both the conditions and the consequences of risk.
The first step to developing a stronger reputation is to build trust with stakeholders. Who are these stakeholders? They can be consumers, employees, customers, business partners, investors, regulators, community members and others.
If stakeholders hold an organization in high esteem, it has a good reputation. An organization with a good reputation is by definition trusted. Trust enables an organization to rebound during times of challenge and stress. In other words, greater trust can enable better resiliency.
In order to create a resilient reputation, an organization needs to:
- Understand stakeholder perceptions.
- Identify the drivers of those perceptions.
- Develop strategies to understand, monitor and influence perceptions.
- Develop internal alignment around plans to move quickly when perceptions appear to be heading south.
Building an organization that is trusted and resilient – and has a strong reputation – takes an organization-wide effort. To learn more about steps you can take, including three ways to influence stakeholder perceptions, download my new white paper, Trust and Resiliency: Two Keys to a Stronger Reputation.
Linda Locke is a partner and senior vice president at Standing Partnership. Follow her on Twitter @Reputationista.
Mike Ziegler is an associate at Standing Partnership. Follow him on Twitter @mikeziegler.