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10 lessons from CEOs on how to manage corporate

reputation in a new era of activism
When employees are pushing companies as hard as outside activists, and a CEO’s
reputation is directly tied to his company, these lessons offer help toward building
and maintaining good public perception.

[Image: Peshkova/iStock]

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 BY D E N I S E B R I E N
6 MINUTE READ

A changing landscape of social, political, and business dynamics is creating a new set of
challenges for CEOs. Corporations and their hard-won reputations now have as much to gain
as they have to lose from sudden changes in perception. To gain a deeper understanding of
the challenges and opportunities that lie ahead, we sat down with corporate leaders
representing almost $2 trillion in market cap, billions of dollars in revenue, and millions of
employees and asked them to share what they see on the horizon and how they are
approaching the changing demands of corporate reputation.

We view corporate reputation as the overall perception of an organization that is held by its
internal and external stakeholders—based on its past and current actions and probability of its
future behavior. Forward-thinking leaders will prioritize an always-on investment in reputation,
combining actions and accountability that connect business decisions to their impact on
reputation, which will allow organizations to build a bank of goodwill that protects their license
to operate.

Individually, the leaders we spoke to provided examples of nimble and nuanced approaches to
managing corporate reputation. Taken together, their stories offer a revealing glimpse into the
future.

Here are 10 insights that are keeping CEOs up at night, and what to do about them.

EMPLOYEES HAVE BECOME THE NEW CORPORATE CONSCIENCE

Employee support is a game-changer, but it is not a given. Armed with the knowledge that
internal pressure can effect more change than external pressure, and empowered by
generational and societal trends, employees may now be among a company’s most vocal
external critics. Companies need to treat employees as they would their customers, investors,
policymakers, and other influencers: as stakeholders critical to their reputation.

FEAR OF ANY PUBLIC CRITICISM CAUSES CORPORATE PARALYSIS FOR ANY

MEANINGFUL ACTION
Everything that companies say today is subject to scrutiny, but the inclination to say nothing—
rather than risk saying something objectionable—is not a strategy. Every corporate stance
may bring criticism, but companies need to rethink the way they view criticism by
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 acknowledging that smoke is not always fire when it comes to reputational impact, and
accepting that some criticism is worth weathering in the short term to fight for what is right
and gain reputational value in the long term.

IT’S NO LONGER A CHOICE TO SEPARATE EXECUTIVE REPUTATION FROM

CORPORATE REPUTATION
We’ve always had well-known CEOs: Steve Jobs, Jack Welch, Jeff Bezos. But what’s new is
the extent to which a CEO’s personal reputation is inextricably tied with the company’s
corporate reputation. Today’s CEO is expected to have a point of view not just about his or her
company, but about society, employees, and their relationship with all of them. CEOs need to
approach reputation as a political candidate would, with a leadership platform that balances
the need to engage on issues of the day with the long-term priorities of the business.

REPUTATION IS OFTEN VIEWED AS SOMETHING THAT HAPPENS TO YOU,

NOT SOMETHING YOU CAN ACTIVELY SHAPE
Companies that have faced reputational crises often have a similar epiphany: that they had
effectively taken their good reputations for granted until a crisis brought everything crashing
down. Reputation often does not get investment until there is a crisis or inflection point, when
it becomes clear that the lack of a strong reputation will threaten the company’s license to
operate. Failing to invest in reputation not only leaves a company vulnerable when issues
arise, but also is a lost opportunity to differentiate and gain competitive advantage.

DESELECTION BY INVESTORS AND CURRENT AND PROSPECTIVE EMPLOYEES

IS THE FASTEST GROWING DRIVER OF CORPORATE BEHAVIOR
Investors and employees have significant and increasing power to bend and shift companies
on issues because the threat that they’ll take their dollars and talents elsewhere is real.
Blackrock’s decision not to invest in companies without meaningful sustainability goals is just
one high-profile example of the pressures companies face to respond, and quickly, to the
issues their stakeholders care about: sustainability, social justice, and treatment of employees,
to name just a few. Regulatory change and legislative pressure are still factors, but non-
government stakeholders can often exert pressure faster and more efficiently than policy and
regulators. Companies need to invest in reputation at an earlier stage of their development so
that reputation can become an asset, rather than a liability.

PURPOSE IS NO LONGER DIFFERENTIATING

Defining company “purpose” has been a trend over the last decade in corporate reputation.
But purpose is now table stakes. Stakeholders assume that companies will align their interests
with society. What’s differentiating is bringing purpose forth through what the company does
every day, seeing it embraced by the businesses, and using it to help drive business
decisions. All stakeholder groups are demanding more from companies, including business
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 actions that demonstrate people over profit, leadership on non-business-related issues, and
radical transparency about how they operate.

REPUTATION IS TODAY’S EMPLOYEE PENSION

As traditional loyalty-boosting benefits dwindle, most employees aren’t looking to the future to
collect a pension, but rather are focused on finding work that provides purpose, pride, and
alignment with their values in the present. A strong reputation is a competitive advantage that
companies should position as a tangible employee benefit to current and prospective talent;
the company’s past actions and future plans—and the extent to which it is able to provide
workers a shared sense of mission and purpose—are important levers a company can pull to
attract talent or prevent talent exodus.

CORPORATE STRUCTURES DESIGNED OVER A HUNDRED YEARS AGO ARE

HUGE BARRIERS TO EFFECTIVE REPUTATION MANAGEMENT
Existing corporate structures were built for an entirely different world, a different media
environment, different stakeholders, and different stakeholder expectations. The power to
“manage” reputation is often siloed within comms, marketing, and PR, reflecting an antiquated
way of thinking of reputation as “a PR problem” instead of a business challenge—or
opportunity. Forward-looking companies are integrating business decision-making with
reputation and starting to make reputation outcomes a KPI for the C-suite.

IF YOU’RE THINKING ABOUT YOUR REPUTATION AS A SCORE, YOU’RE

DOING IT WRONG
There is no one-size-fits-all approach to measuring corporate reputation. Syndicated tools
that spit out a reputation score often test common attributes, and usually with a general
audience. Effective reputation monitoring must be tailored to each company and the specific
audiences that matter most to the company’s business and strategy, leverage a range of
methodologies and data inputs, and account for where the company has been as well as
where it wants to go.

SOMEONE IS ALREADY TELLING YOUR STORY. THE QUESTION IS WHETHER

YOU WILL
Third-party groups understand modern communications better than many corporate
communications teams, and a company’s detractors can easily and widely circulate
information—and cause reputational damage—at an accelerated pace through social media. A
company can’t make its story the dominant one simply by yelling it louder. It needs a better
story to tell, the one that is simplest to understand, the most compelling, the most credible,
the one that people can latch onto. Corporate leaders must learn from their more nimble
critics and create parallel infrastructures that are better able to counter third-party detractor
groups.
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 In short: Change is constant. Stakeholders—including consumers, the public, employees,
policymakers, and investors—are demanding more from corporations than ever before. From
Black Lives Matter to immigration to climate change, the public expects corporations to play a
role in advancing more than just their business. Corporate reputation now matters more than
ever.

Denise Brien serves as managing director of research operations for Purple Strategies—a
corporate reputation strategy firm—working with a team of researchers and analysts to deliver
integrated data and compelling insights for Fortune 500 companies, associations, coalitions,
nonprofits, and some of the most recognizable brands in the world. She has worked in
research for 20 years and has extensive experience leading quantitative and qualitative
research. Prior to joining Purple, Denise held positions in research and consulting at AOL,
Premium Knowledge Group, and JD Power and Associates. Explore more Futurecasting by
Purple Strategies insights at futurecasting.com.

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