The value of a business increasingly lurks

not in physical and financial assets that

are on the balance sheet, but in intangibles.

—The Economist, June 12, 1999

The reputation of your business is what precedes it in the marketplace, be you service or product. Building a reputation based on customer centric service, standing by your brand promise and placing an emphasis on happy customers sows dividends in the short and long term. Businesses and organizations must manage their reputation by communicating with their clients and customers and management must embody honesty, fairness, responsiveness and consistency in dealing, conducting business in a manner that ensures long-term success. People are loyal to companies they feel good about.

How you deal with employees and customers creates the reputation you develop.They are key to the success of every business. Many companies fail to understand the importance of developing and maintaining a consistent reputation as trusted, reliable and treats everyone fairly. The culture of the organization informs the perceptions of the public at large and learning how to assess what kind of reputation your organization has improve upon your approach each employee, customer and client, each of whom has an influential ability to impact the reputation for better or worse.

If the reputation of an organization is tarnished, it is a lengthy and expensive job to shift negative perceptions that have been created by the key constituencies. Management must strive to communicate clearly to employees a culture where they expect them to treat each other and everyone they come in contact with while representing the company in a manner that is consistent with the brand values. When employees deviate, it is important to re inforce those expectations and that behaving in a manner inconsistent with the culture is unacceptable as the values and perspectives build the reputation perception.

Reputation management has become a necessity since the sweeping uptake of social computing. Reputation management criteria facilitate and automate the process of determining trustworthiness, a central component to all meaningful human interaction, especially interpersonal relationships.

Reputation is generally an outworking of character or behaviour, i.e., what an individual or organization is reknowned and is different from image or branding for the fact that the earlier can be created and the former is an identity that evolves. Reputation management is customarily executed in the monitoring of commentary, often derogatory, around dissatisfaction. However, true relationship management should seek to leverage the good testimonials to augment the standing and perception of a brand, person or service.

Reputation is either:

Excellent

This mean that the organization have obtain the highest position on the spectrum that makes its reputation to be impeccable and this mean that all the indices that ensure the best corporate governance are present; high quality of service/product, strong corporate compliance, strong brand values and communication, anticipate and manage risk properly, relate well with all stakeholders (internal and external) without any major friction, fulfills contractual agreements, communicate effectively, learn from others mistake and above all have clear and transparent vision, strategy, plan and be trustworthy.

Good

Organizations that belong to this category have almost everything that were mention in the excellent category but one or two of them may be missing, this is where some of the companies belong to and example are Johnson & Johnson.

Bad

Organizations that belong to this section are numerous in number this is primarily because they continuously break people trust in them and they e.g. the insurance industry.

Ugly

This is the lowest depth of reputation, it always happen as a result of a high level of deception by an organization or an individual it either ruin the organization or the individuals that surround it e.g. Enron in U.S.A.

It is possible for organization to be boxed into any of the categories that they do not necessarily belong to because of being misunderstood or the fact that they are not transparent enough in their dealings with the stakeholders and this can be disastrous for the organization, proper management is needed for a company to be properly align with its reputation and justify where and how the intervention should take place.

Identifying the state of your reputation Either excellent, good, bad or ugly every reputation requires attention, the attention require are however different from each other and in other to identify the position of an organization on the reputation spectrum there are things that can serve as pointer, here are some of them; 1. High or low employee turnover 2. Reduction or increase in market share 3. Waning or increasing shareholders confidence 4. Quality of product/service 5. Customer retention is high or low 6. Media report good or bad 7. Third party rating and award is high or non existence 8. Competitors perception of your organization 9. Host community perception

All these and other pointers that contribute to indices such as corporate governance, corporate social responsibility, organization ethics/culture and the society norm are what an organization will be measured with in other to situate its reputation. With all these it should be now be clear that reputation deals with three things and they are:

1. What you do or do not do

2. What do you stand for

3. What you say, do not say or perceive to have said

This are what the stakeholders will use in judging the pointers earlier mention in order to situate your reputation, so question such as; how do you treat your staff? How does the organization respond to crisis? What is your rating like? How much confidence do your shareholder/ bank have in you? How well do the consumers accept your product/service? It is now left for your organization to know what is being said of you and align it with your brand. Reputation management is therefore cyclic and the one to be use must fit the stage in which an organization is in.

The cost of managing the reputation of an organization will adequately reduce if your preparatory reputation level is very high, reputation management could therefore take place at any of the stages of the development of an organization.How then do we manage reputation whether excellent, good, bad or ugly or in different stages of the cycle? The organization must identify all the issue that affects its reputation (reputation audit)

It must analyses each one of the issues properly to ascertain the past, manage the present and protect the future.

Trust in the world of business has evaporated as the world’s most severe economic crisis since the Great Depression is causing millions around the globe to lose their jobs and wiped out billions of dollars of invested capital. Charles H. Green is founder and CEO of Trusted Advisor Associates, the author of Trust-based Selling and co-author of The Trusted Advisor. Centering on the theme of trust in business relationships, Charles works with complex organizations to improve trust in sales, internal trust between organizations, and trusted advisor relationships with external clients and customers. He delivers seminars about trusted relationships in business for a wide and global range of industries and functions. According to Charles ‘In a world that is increasingly connected, but also increasingly impersonal, the role of trusted relationships is ever more critical.’ Charles clarifies his idea of what a ‘trust relationship’ looks like, as well as what the merits and benefits are:

What A True Trust Relationship Looks Like

‘A lot of what passes for trust isn’t. Trust isn’t high client satisfaction ratings—it isn’t even “client delight.” It’s not loyalty, as measured by retention rates. And it certainly isn’t being “client-focused,” because a great deal of client focus is done solely for the sake of such things as increasing the seller’s profitability and share of wallet.

Trust is personal, not institutional; it’s emotional, not just rational. Above all, it has to do with the firm’s intent. Is your intent to help the client, or is it to make money by helping the client? Your client knows the difference.

In one study of 2514 buyers by Bill Brooks and Tom Travesano (You’re Working Too Hard To Make The Sale, Irwin Professional Publishing, 1995), 94% of buyers who bought on the basis of needs said they would “certainly” consider buying from another provider.

And 91% of benefits-based buyers said they would “probably” do so. But in stark contrast, 99% of those who bought on the basis of wants said they would “absolutely not” consider buying elsewhere. That’s a dramatic difference – and it’s the kind of difference trust makes.

The Economics Of Trust-Based Relationships

What happens when you get 99% declarations of absolute loyalty–when clients say they’ll “never” leave you on principle? The economics are massive.

A Harvard Business Review article (Collaboration Rules by Philip Evans and Bob Wolf , 2005) by BCG suggests that the US GDP is comprised of roughly 50% transaction costs and that the primary strategy for reducing those costs is trust. 50% of an entire economy is pretty big.

Now, on a micro-level, consider what happens when a client really trusts you. Your advice is taken; your insights are sought. Decision processes are fast-tracked. The costs of auditing, legal, and tracking disappear.

Your recommendations are taken at face value. The likelihood of RFPs is greatly reduced. You get asked in at earlier stages of issues. Disagreements are sorted out in furtherance of a long term good. Information is shared between professional and client, and points of view are welcomed rather than suspected.

The payables clerk gets your checks out on time, and you’re upgraded to preferred provider status so “on time” means what it says. Pricing is accepted as “fair.”

Finally, client loyalty based on trust is far higher and stronger than loyalty based merely on things like business processes or pricing. Mechanically, this raises the firm’s profitability through reduced sales costs and higher margins. But, more importantly, it makes the firm far more effective in helping its client.

The Client Benefits Of Trust

What about the benefits to the client? Economic benefits are even greater and come at three levels. First, the direct costs per transaction with a trusted provider are lower.

Second, when a provider understands client needs, that supplier is likely to make more appropriate suggestions, to better anticipate emerging needs and to make better recommendations. Those benefits are indirect, but probably outweigh first level benefits.

The highest client payoff of all comes from the ability to trust immediately and completely the advice of a talented outside expert without spending any time or resources on tweaking, critiquing, hedging checking, auditing or second-guessing. At this level, professionals are as dependable as our most-valuable employees, yet with the added benefits of expertise and objectivity that come from being an outsider.

With that confidence in the pocket, a firm can afford to fast-track processes, make far faster decisions, and take bold actions without fear. The benefits go past mere cost reduction, and instead towards achieving significant revenue and strategic enhancements.

The business case for trust ultimately rests far more on effectiveness than on efficiency. A trust-based client relationship enables far more effectiveness in the marketplace for both parties than do conventional relationships built on negotiations, contracts, and other indicators of arms-length treatment built on self-interest alone.
The Economic Paradox

It’s tempting to ask, “If all that’s true, why isn’t everyone doing it?” The answer is, because most of us have a really difficult time being trustworthy.

If a client trusts their provider in the way described above, the provider will be highly profitable and high-growth. But, if the firm sets out to be highly profitable and high-growth by means of being trusted, it will not work. Intentions matter and intentions are critical to being trusted.

The only way to be trusted in the way I’m speaking of is to be worthy of trust—to be trustworthy. The critical element to being trustworthy is to have the client’s best interests at heart all the time. And that goes to intent.

To intend to place the client’s interests first raises some radical implications. For example:

* The purpose of a sales call is not to get the sale, but instead to help the client;
* Your focus should be on work that needs doing, not on work that you can do;
* Your ultimate strategic goals should be client service, not competitive advantage;
* You should share, not hide, your economics with your client, because transparency fosters trust;
* You should write your proposals sitting next to your client.

The paradox is: If you are willing to let go of your own short-term, self-oriented goals, you will achieve those goals. Your influence is greatest when you’re not trying to influence. Your profit is highest when your goal is not profitability by client service.

Barriers To Trust

Can it be done? Absolutely. Many successful individual professionals know the lessons of trust very well. But at the firm level, we have been seduced by the “reigning belief systems” of business: in particular, the ideas that business is about competition, and that ever-further refinement of measurements, particularly around client relationships, helps the economics.

Just because you can run division-level client profitability studies every week doesn’t mean you should do it. Just because you can calculate client share of wallet and hit rate on sales opportunities doesn’t mean you should focus on it. Those efforts turn clients into objects, means to our own ends.

Too many firms are focused too much on short-term measures and competitive definitions of success. We need to remember that the best short-term performance comes from executing on a long-term plan or set of principles. Trust is the goal. The powerful economics of trust are merely a byproduct.’

As the global economy makes us increasingly dependent on new relationships and “virtual strangers,” our professionall and personal relationships become more complex. Building trust becomes not only an invaluable investment but something without which we will not flourish.

Every business today is in the relationship business. The Building Relationships That Work program will revitalize the relationships that affect the quality and profitability of your business. Executives gain a better understanding of themselves and others so they are able to build effective relationships.


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