On Forbes.com today, Charles Fombrun, chairman of a group called the Reputation Institute reports that corporate stakeholders attach importance to seven key indicators of performance: product quality, innovation, financial results, citizenship, leadership, workplace and governance. Further, a 1% increase in reputation produces a 1% increase in stakeholder support and a 1% increase in market value.
It's not good enough to be strong in one and weak in another; competing interests cancel each other out.
He illustrates the point by contrasting the reputation of Johnson & Johnson with that of AIG.
A related article reports on the Institute's study of 600 companies internationally, which forms the basis for these conclusions. You can check out the findings on the Top 200 List. A separate list shows how the top 153 American companies fared.
It's impossible to maintain a positive reputation when inordinant attention is paid to shareholder value on a quarterly basis. This myopic focus means that those with a vested interest in the long term - customers, partners, employees (and as we've come to learn the hard way, everyone else in the economy) - loses.
With the exception of financial results, six of the seven performance indicators are affected by how they are measured by influencers rather than hard numbers.
Influencers with authority shape our perception of a company's reputation.
The difference between what "authority" means online is very different than what it means offline, Online, authority is measured by links, hits and views of a website, while offline it refers to a person's expertise and experience.
The same is true of "influence". Online influence is measured in terms of how far a person's ideas or opinions spread over the internet, how long people pay attention to them. Offline, it's another matter entirely.
Because of the reach, scope and speed of the internet, companies are right to be concerned about maintaining a positive reputation online.
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