Friday, September 22, 2006

Is 'Reputation Management' Hype?

Hack Anthony Hilton commenting on the HP debacle poses the question:

What is fascinating is that for all the yapping of the dogs the caravan moved serenely on ­ the Hewlett Packard share price which had been at a three-year high before the eruption, continued to test new high ground throughout.

The share price said that the damage to the company's reputation did not matter as long as it continued to do good business.

It raises the question of whether boards worry too much about reputation and its associated risks. It has become a cliche to say that reputation is the major risk to today's global corporation and this fear has fuelled a mighty expansion in spending on public relations to put a suitable gloss on corporate behaviour. Is it money which needed to be spent? The Hewlett Packard experience would suggest not.

Well, a simplistic view. But very close to home. Hilton, of course, has a shabby mind and can't grasp the role of Public Relations, imagining it as the sort of spin he puts into his stories and which he calls 'Journalism'.

We can start off with how to define an organisation is it the nexus of contracts (Coarse) or Nexus of conversations (Sonsino) or the nexus of relationships (Phillips)?

If of contracts, the contract between the board, shareholders and employees is all that is holding the company together when the simple contract of trust is brocken. If of conversations then for some stakeholders these must be trivial and irelevant to their needs now and trivial does not seem to matter to the shareholders or does it. But if of relationships then they are more powerful than the board might believe and the company can survive.

So this is more about relationship management that reputation management.

Among the values attributed to an organisation are elements of trust which are among many more. Some are brand values (owned by people not companies), some are about needs fulfilment, some are social and the most powerful are emotional. It is a treasure trove of many values.

The Relationship Value Model makes it clear that reputation is about what the organisation does not what it says.