Definitions create Lenses

Definitions create the lenses through which we look at the world. The renowned psychologist, Abraham Maslow said that if the only thing you have is a hammer, you tend to treat everything as a nail.

I start every seminar and presentation with definitions, so that I can establish a common framework through which I can work with my audience. In particular there are a number of definitions to describe reputation and reputation risk, each serving a slightly different purpose. These need to be further explored so that you can decide on how you will manage reputation.

The classic definition is that Reputation is all that is generally believed about your character, respectability, credit, integrity or notoriety. (Latin: reputatio – reckoning). But it is not enough to guide us.

I also use these definitions that give it more meaning:

Reputation is a state of mind – A Set of memories, perceptions and opinions that sits in your stakeholders’ consciousness

Reputation is the net result of the interactions of all the experiences, impressions, beliefs, feelings and knowledge all stakeholders have about a company

So what then is Reputation Management? It is a consulting discipline that realises that Reputation is both an asset and a risk. The definition that I therefore like to work with says that Reputation Management is the building, sustaining, and protection of an organization’s good name, generating positive feedback from stakeholders and resulting in the attainment of strategic and financial objectives. It implies that there is a definite financial link between the work we do in reputation management and the bottom line.

However reputation is also the greatest risk that an organisation can face.(Think of a run on a bank). As Warren Buffett have said: ” It can take twenty years to build a good reputation, and only five minutes to destroy it”.

WE therefore have to consider the following definitions as part of our approach to building and protecting reputation.

The first definition is that Reputation Risk is the risk that an activity, action or stance performed or taken by a company or its officials will impair its image in the community and/or the long-term trust placed in the organisation by its stakeholders, resulting in the loss of business and/or legal action.

The second definition is that Reputation Risk is the loss of earnings that occur in a situation of negative public opinion. It normally results in loss of sales, share value decreases and breakdown of relationships. Many a crises have led to stock price decreases and impact in other areas of the business.

The third definition is one that I use specifically in my Stakeholder Reputation seminars. Reputation Risk emerges when the reasonable expectations of stakeholders are not met. This definition requires a different view.

It essentially involves taking a look at each stakeholders needs and expectations, matching the drivers of an organisation’s reputation and minimizing the gaps that exist.

From the above definitions it must be clear that essentially all risks and all related components of an organisation potentially impact on reputation. This implies that reputation needs to be systemically managed if an organisation wants to extract maximum value from it.