The Journal of the Medinge Group, vol. 1, no. 1, 2007

Ian Ryder
British Computer Society

Microsoft Word version

If you were offered an almost cast-iron guarantee of the route to sustained competitive advantage and a wonderful reputation would you want to know about it? Well let me try to show you what I truly believe is a very simple and easy mantra that makes it possible—but only if your organization truly embraces it as an operating (brand management) practice. Let me begin by explaining something that is really important to understand first, and the reason why the title looks the way it does.

I am very lucky to be able to see quite a lot of academic work and current “think” pieces and for some reason the marketing world, or at least that part of it which purports to write and comment on “branding”, too often makes a misleading distinction between “brand” and “reputation”. The distinction most often indicating that they are independent or can be managed independently—I must address this first so that this article makes sense!

Reputation management is brand management. The only difference is that brand management covers a broader spectrum. I have searched for some time to try and find a usable and easily understood analogy to explain my thinking here, so please allow me to take you through it. Then, as we see how business strategy, derived alongside a set of vision and value statements, is inextricably linked to brand strategy we will see clearly how these impact reputation, why employees are so crucial to that reputation and where the internal and external communications linkages need to be.

I read a paper by a very well known research organization that actually damaged the “reputation” of their “brand” for me! As part of it the author argues, ‘The brand has psychological appeal; reputation appeals to the sense of social responsibility’, which is such a confused expression that if it appeared in one of the Journal of Brand Management papers I was refereeing I would be questioning the author’s understanding of the subject!

My premise is that reputation is to brand as health is to body—allowing for the fact that no analogy is perfect.

Consider: the Body
It is a collection of 6 billion genes manifested in blood, organs, bones etc. all covered up by skin and covered in many places by hair.

The “health” of that body is affected by such things as basic construction of those genes (i.e. luck of the draw actually) but seriously impacted by diet, exercise, sunlight or propensity to drugs, alcohol, tobacco, etc.

“Health” is positively impacted or negatively impacted dependent on how we treat these things and that impact, through our “health management”, will absolutely affect “the body”—it does not exist in isolation. Further, our health is the result (outcome) of the way in which we treat our body.

However, there are things that we can do as part of our “body management” that arguably don’t affect our health, at least nowhere near as directly. We need to cut our hair, manicure our nails or treat our skin with creams to prolong elasticity, youthful looks, etc. (hasn’t worked for me yet though!)

Consider: the brand
It is a collection of lots (not 6 billion!) of “things” manifested in strategies (business, financial, marketing, HR, manufacturing, etc), systems, processes, premises, partners, products, services etc, all wrapped up and “covered” in a brand promise.

In the same way we can take reputation (health) which is also affected by the basic construction (vision, values, culture, operating model) of the business brand (Body) but it is seriously impacted by the behaviour of our people, systems and processes or the way we communicate our attitudes to such things as CSR and customer management. “Reputation” is positively or negatively impacted dependent on how we treat these things and that impact, through our “reputation management”, will absolutely affect our brand—it does not exist in isolation. Our reputation is the result (outcome) of the way in which we treat our brand.

However, there are things that we can or should do as part of our “brand management” that arguably don’t affect our reputation, again, at least nowhere near as directly. We need to manage our corporate identity, trade marks and patents, ensure we have a structured brand architecture and appropriate measurement systems in place.

I know analogies are always open to attack because we can never find the perfect match, but in all my struggles to find one to try and “dispel the myth”, this is so far the best I have found and I hope it makes the relationship clear.

Let us move on then to vision and values. Making these work in any organization is a major challenge and you really should read a book called The Committed Enterprise by Professor Hugh Davidson.1 It is one of the most readable non-fiction books I have ever enjoyed and it presents the results of a very substantial research programme looking at why many organizations fail to implement their vision and values. Two particular tables highlight some keys to success or failure which include:

Failure:
1. Agree vision and values amongst a small group
2. Develop values in a vacuum
3. Keep values vague and don’t measure
4. Allow senior management to flout values
5. Communicate inconsistently
6. Micro-manage the organization brand

Success:
1. Use vision to align and unite stakeholders
2. Establish values that build competitive advantage
3. Convert values to measurable practices
4. Communicate by action, signals and repetition
5. Macro-manage the organization brand

(See the book for the complete list.)

Just this selected list provides so much rich discussion about what impacts our ability to manage our reputation. We will refer to this later to see how the links are made.

Let us consider the more commonly understood primary elements that help to build or destroy reputations. There are three main ones:

• product or service quality;
• customer experience;
• social or environmental record.

Clearly there is a very direct impact on reputation if the physical product bought is of poor quality and fails to do the task for which it was purchased. We have all bought what we think were “bargains” from unknown branded sources only to curse later when the CD didn’t play, or the handle fell off the spade, knife, wheelbarrow, etc. But we also know that even where we are buying a solid, recognized quality brand, there is a large component of “service” in the “total customer experience” associated with that brand—it is not just “service” brands that need to watch out for reputation failures from a service perspective!

Quick example: recently I was looking to replace the Philishave electric shaver that had given me good service for about 12 years—solid product brand experience. I went to several outlets looking for advice on current models and after two experiences in well known suppliers from staff that cared less about what I wanted and knew even less about the product, I was despairing. Then I was walking through Boots (a large retail chemist) and just happened to notice that they had a section containing shavers and, as I stopped to look, I was approached by a lady who asked very nicely if she could help me. To cut a long story short, this lady knew everything I needed to know about the alternatives and handled the interaction so smoothly and in an unpressured way that I bought a model far more expensive than I had originally been considering, and I went away feeling I had enjoyed buying it!

The key morals here are:

• “product” brands often also rely on service to complete the brand experience;
• “channels” are critical and need to be part of your brand management system in order to ensure a consistent, enjoyable brand experience for your customers;
• it was the individual that made the difference.

This is all very self-evident in service businesses where restaurant staff, telephone contacts with such as insurance companies, banks etc. all make good or bad service very immediate. We have all spent much time, I am sure, spreading both good and bad observations around our networks that have either enhanced or detracted from the reputation of those brands!

And so it is that employees, and indeed the wider definition of that, which includes everyone who represents our brand and helps deliver the brand experience that drives our reputation, are absolutely critical to the process. One crushing statistic that I discovered a few years ago in the Journal of Marketing found that in the list of reasons why customers defect, whilst only 9 per cent are lured away by competition, a huge 68 per cent are turned away by an attitude of indifference on the part of an employee!

This is not rocket science! A very simple rule set says:

(a) ensure your employees understand what we mean by a ‘consistent, positive brand experience’;
(b) explain why we need to manage that;
(c) help them recognise and understand their role in that;
(d) engage their commitment to fulfilling their part in the delivery of it;
(e) make the measurement of our performance in achieving it both easy to understand and a matter of public record, so we can see we need to improve, or rejoice that we are retaining delighted customers.

All of the above we now delight in calling brand engagement or embedding.

Which leads us neatly into: what are the links across the organization that contribute to our reputation? Well we have already touched on several, but probably the single most important factor is the CEO of the organization. He or she is responsible for as much as 40–55 per cent of the image and reputation of any corporate brand (depends on which survey you look at), and is also clearly the driver and owner of the company vision and values—note I didn’t say developer of those (refer back to Hugh Davidson’s key failure list).

Common situation: the CEO says: ‘We keep telling them what our vision, values and strategy are and yet I keep seeing employee surveys telling me they don’t get it—how often do they need telling?’ (N.B. this is a genuine Fortune company CEO quote.) The answer of course, is not to tell, but to listen. Listen to the voice of your customers, employees, even your suppliers and respond to that input. Your reputation is created through them and driven by every single experience (moment of truth) they have—it is also instantly changed for the worse but only gradually changed for the better.

So, again, a very short check list:

• from any level of the organization (or brand delivery owner) up to the CEO, the delivery of the brand experience must be absolutely consistent with expected values;
• the “soft”, informal networks are the most true and valuable—listen to them and act upon them;
• your systems or processes must be designed to facilitate customer service and support in line with your values
• measurement systems are crucial. Ensure they are designed to complement and not work against each other—convergent goals. ( Jack Welch, of GE fame, had a passion to create what he called a ‘boundary-less’ culture, which is even further advanced thinking than convergent measurement, but it helped turn GE into the global powerhouse of the 20th century.)

Finally, how do we use vision and values as a route to a strong reputation through alignment of internal and external communications? I refer back again to Hugh Davidson’s list which has communications as the key to either success or failure in the actualization of making vision and values work. Once more this is not difficult although there are many companies out there who try to make it so!

Internal communications
This is not the place to review the myriad tools available to serve internal communications. However, research indicated that the relationship of satisfaction with internal communications and the percentage of those who are prepared to speak highly of the company product or services is seriously connected. On a four-point scale from ‘very low’ to ‘high’, this moves from less than 20 per cent to almost 80 per cent of employees who would speak highly. The jump from the ‘medium’ satisfaction with communication to ‘High’ is staggering though—it more than doubles!

External communications
Again there is a myriad number of ways in which companies “communicate” to their various constituencies, but the key is clarity and consistency. It is no good, for example, espousing a set of values that include care for the environment and then behaving in a way that conflicts with that (one of the problems that the oil and chemical industries have struggled with). In fact, the topic of corporate social responsibility (CSR) has grown out of that very conundrum into a major field of its own. It is not difficult to understand why when you consider just a couple of frightening facts like:

• it has taken only 30 years to consume one-third of the planet’s resources that took 3·8 billion years to make;
• in the past 50 years the world has lost a quarter of its topsoil and a third of its forest cover.

The lesson is, as always, very simple. Do what you say you will do and make sure that the messages being delivered through whichever communication disciplines you have chosen for external audiences, are the same as those being driven internally through training or induction and measurement systems.

Humanity-based strategy
As we move towards the summary, I wanted to share some thinking that began with my esteemed colleagues in the Medinge Group and which resulted in my contribution to our book Beyond Branding. Based around anthropology, this thinking has developed into what I call Humanity-based Strategy (HBS).

Take a look at the four top expectations or needs as expressed by Disney employees and “guests”:

Disney’s vision and values are legendary and they define their “Total Customer Experience” in four elements:

(a) anticipation;
(b) ‘Welcome’;
(c) the Experience;
(d) ‘Goodbye’.

Whichever way you look at this very simple overview, it is quite clear that Disney is thinking about their customers and employees as human beings and for very good reason!

HBS is a very simple, but powerful, concept with just three basic tenets:

(a) people are people first;
(b) manage the reality gap;
(c) create trust and relevance.

Since man descended from the trees we have been driven by a base set of programmed behaviours that always prevail whatever social behaviours we overlay. Your customers’ (and employees’) first reaction to any situation and brand experience will always be the human one—feeling good, or feeling bad. You simply must begin to understand and learn how to manage that.

The reality gap is simply the difference between what you think you are doing to and for your customers and staff, and what you are actually doing—there is always a gap of some kind and this can either be causing you to waste revenue or profit opportunities, or allowing gaps for your competition to enter. Learn what it is and how to manage it.

The two most powerful words in the world of customers: without trust you can have no loyalty of any kind and no “advocation” other than bad press. Without relevance, in both product or service offer and timing, you will be unsuccessful with the sale.

Your vision and values should drive your building and execution of each of these three tenets.

Summary
It has not been possible to address in depth any of the items that I have touched on in this article but I hope you have some pointers to use to examine your own situations, along with some further reading.

Vision and values “fail” in organizations either because of a “flaw” in the vision or failure of the values to create any competitive advantage. However, even if these are not flawed and do lead to competitive advantage, they are executed (and that word has a very interesting double meaning!) by your people, primarily, and supported by the systems and procedures and measurements within your company. It is no good having the best website in the world, easy to navigate, user-friendly and quick, if your distribution process (owned or outsourced) lets you down—your reputation will not survive and prosper!

The last example I will use is, not surprisingly, one that has now moved into the history books as one of the most spectacular: Enron Corporation. It is not my place or intention to question what exactly were Andersen’s values that resulted in the shredding of key papers, the action that was probably more to blame for their “crash” than the questions about their basic audit processes. But it has to be said that if they had been rigorously executing a brand management system, that was linked to the business values and disallowed any such practices because of the reputational impact of failure to conform to values, then they would not have been faced with the disappearance of what was a globally powerful brand. To link back to my opening distinction, the rapidly failing reputation (health) was bringing down the brand (body).

The guarantee!
Lest I fail to do what I am now going to implore you all to do, I did promise to let you in on the six-word secret to sustained competitive advantage through a great reputation and therefore unassailable brand.

Make a promise … keep a promise!

If you just think through what living to this very simple philosophy means, first developed way back in 1987 when I was asked to define brand management, you will realize how powerful it is. A brand is a promise, and a promise is about trust. Your vision and values act as the beacon. Then, using this “mantra” as the guiding principle for the delivery of those will ensure that whatever your business, be it product- or service-based, whatever your channels of selling, support, delivery or after-sales, your incidence of poor customer comment will be so low as to ensure your high reputation is maintained.

Perhaps the last words should come from a gentleman of outstanding credentials (Nobel Award winner) who described, way back in 1937, what business was all about: ‘Fulfilling customer needs via relationships you maintain’ (Ronald Coase: Nature of the Firm).

Says it all really doesn’t it? Good luck!

Reference
H. Davidson: The Committed Enterprise: How to Make Vision and Values Work. Boston: Butterworth Heinemann 2002.