Another quality of reputational value is that it’s accretive. That is, reputation is less the result of stakeholder responses to good or bad headlines and more the outcome of managing ongoing expectations. Half of the companies on the Consensiv 50 list for October have been there for at least four or more consecutive months. A news search reveals little in the way of surprises for these companies. Many — including Diageo, J.M. Smucker, ADP, Linde, 3M, and Becton, Dickinson — are known for a commitment to process controls that help ensure product and service quality and safety. These drivers of reputational value don’t necessarily win awards but because stakeholders can appreciate and value them, they deliver reputations that are less likely to suffer a negative event. If they do suffer one, they have a greater likelihood of recovering more quickly and completely.
A third quality of the table’s reputation leaders is that many of them operate in industry sectors that have detailed regulatory requirements for business performance, such as companies in energy, minerals and health-care technology. This isn’t surprising, since third-party validation makes assessment of reputational value clearer and more reliable. Shire, for example, broke through the ranks to join this month’s Consensiv 50 league table. The expectations for the biopharmaceutical company’s future success are based on established and disclosed criteria for quality, safety and ethical behavior that are in large part required by law.
A final quality of reputational value revealed in this month’s table is that it’s operational and not a result of values being claimed or attached to it through a branding campaign. Out of the 18 companies that have been on the list every month this year, nine are in business-to-business industries and nine are in business-to-consumer industries, some of which, like Roper Industries, have not run a corporate image campaign in recent memory.
We believe reputation is better measured as the expectations of business performance and quality evidenced through the prices stakeholders are willing to pay, and the costs companies will incur to earn profits. A stark disconnect exits between the money that consumer brands spend on brand and identity and the resulting financially relevant measures of value. Reputation is a business metric not a popularity contest.
Jonathan Salem Baskin is managing director of Consensiv, a reputation controls firm. He is the author of six books and has written a regular column on CMO leadership for Advertising Age since 2008. Nir Kossovsky is chief executive of Steel City Re, a leader in corporate reputation measurement and risk transfer. He is currently a Trustee of Excela Health Systems, a community-based health care provider. His latest book is Reputation, Stock Price and You: Why the Market Rewards Some Companies and Punishes Others.