The Hindu Business Line : The most valuable asset that doesn't show on balance sheets

CALL IT goodwill, image or conscience. Companies have a name to guard just as much as individuals have. "It is still the rare company that realises the full value of its reputation," writes Ronald J. Alsop. In good times, it is reputation that enhances business; in turbulent times, it becomes "a protective halo"; and, the grim truth is that it can be destroyed "in an instant" by almost anybody in the corporate ladder."

Alsop's book titled The 18 Immutable Laws of Corporate Reputation, published by Wall Street Journal Books, is about `creating, protecting, and repairing your most valuable asset'. The blurb points out that one can find answers from Alsop to questions such as how to cope with `the many hazards in cyberspace', how to monitor `your ever-changing public image', and how to decide `when it's time to change your name.'

Well, what are the laws? Here is a sampler: Learn to play to many audiences; live your values and ethics; be a model citizen; create emotional appeal; speak with a single voice; make your employees your reputation champions; fix it right the first time; never underestimate the public's cynicism; and manage crises with finesse.

The opening scene in the book is a FedEx truck in flames, followed by the story of how the company quenched not only the fire but the inroads that media coverage would have made to company reputation. "FedEx is always on guard for threats to its reputation. A huge danger emerged by the end of 2001 in the form of Arthur Andersen, FedEx's accounting firm."

Ah, these accountants, you fret, but FedEx `reputation management radar' picked up the blips when the Enron scandal broke out. "FedEx announced that it would fire Andersen... Three days later, federal prosecutors charged Andersen with obstruction of justice, setting in motion the firm's demise."

How long does it take to repair reputation? A survey by Burson-Marsteller found average response to be 3.65 years. It can take much longer, please note. "Audi took a full decade to reverse a sales slide that began with reports about an alleged defect that caused its 5000 series models to surge out of control." One can be fooled by trickles of `positive news' as signalling a turnaround, as Xerox's CEO Anne Mulcahy tended to believe in July 2003.

Reputation can be culled out from corporate vision statements. While most companies have crated vision/mission statements, their Web sites often are silent about such statements. "Maybe they have not yet achieved a consensus within the organisation or are embarrassed by what they've committed to paper," wonders Alsop. "The CEO should write and communicate it — perhaps with the help of a skilled wordsmith at the company."

Law 11 states: "Control the Internet before it controls you." That is because the Net, though feared as a minefield for corporate reputation, provides `unprecedented opportunities for companies'. The author points out that the Netizens are `e-fluential' because they "tend to be above average in income and education" and many of them "influence public opinion." A survey found that "e-fluentials pass on positive experiences to eleven people on average but relate negative news to seventeen."

What's in a name, is not true, because law 18 gives name-change as the solution of last resort. It's, therefore, all in the name, but it takes a lot of money to get the new name stick. Also a lot of courage to allow a name that you had built over the years, at great expense, flushed out into wilderness. "You can run, but you can't hide," is a warning to remember. "It's especially true if you're still tied to controversial businesses and past crises."

Accountants would remember how a Big Four firm adopted a jarringly different name for its consultancy: "Monday". It was, after all, good for everybody that "IBM snapped up Monday, ditched the too-cute name."

The author comments that it was a wise move. Because: "In this era of corporate distrust, who would have wanted people to associate a consulting firm with the golden oldie song — `Monday, Monday. Can't trust that day.'"

So take charge of reputation management. It is too serious a task to be left solely to your PR firm.

ManageMentor@TheHindu.co.in

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