Rethinking Reputation Risk: From Values to Value
“Corporate culture — how to improve it and how to stop it turning bad — is back at the top of the boardroom agenda after the CBI was rocked by rape allegations from two women who worked there.”
Emma Jacobs and Andrew Hill, in an article for the Financial Times, argue the “CBI scandal has prompted business leaders to re-examine their culture and treatment of staff.” They note that, “Corporate culture — how to improve it and how to stop it turning bad — is back at the top of the boardroom agenda after the CBI was rocked by rape allegations from two women who worked there.” I hope they are correct, but I have my doubts.
An unnamed retail director is quoted, warning that “a business can do very well financially with a shitty culture . . . but at some point it falls over.” Whoever said that is correct, of course, But few directors, and even fewer retail directors, seem to know this. It is also somewhat telling that the source did not wish to be named. Daily we hear examples of the problem of toxic culture. They seem pervasive. And even more so in certain sectors like retail and finance. ????
"Good culture is not simply a way of avoiding bad outcomes, but a force to improve performance: “Values should save you money, but they should also make you money,”
In the article the authors cite comments made to them by Antony Jenkins who took over as Barclays chief executive in 2012 following the Libor scandal. Apparently, he remains convinced "good culture is not simply a way of avoiding bad outcomes, but a force to improve performance: “Values should save you money, but they should also make you money,” he said.
The title of the article is “how to stop the corporate rot,” and its focus is on spotting the signs. But the authors suggest, “After-the-fact investigations often show bad behaviour has been openly tolerated or even encouraged by senior management.” And “even if the chair is uncomfortable with behaviour in their organisation, the temptation is often not to disrupt the business if it is doing well financially.” In these comments we are starting to really get to the root cause of the problems.
Elliot Schreiber is a former director of, or advisor to, many multi-national corporations and author of "The Yin and Yang of Reputation Management: Eight Principles for Strategic Stakeholder Value Creation and Risk Management" (Amazon).
He will be shining a spotlight on these issues during the programme I have been developing with him. “Rethinking Reputation Risk: From Values to Value.”
Elliot echoes the sentiments expressed by Antony Jenkins when he says, “"reputation is not based on good PR or marketing, but rather is determined by each stakeholder differently according to their own needs and interests. Reputation and risk both begin inside the organisation with its values and culture."
The programme, starting in September, is offered entirely online for a global audience of busy directors and executives. Over a ten week period on-demand content will be discussed in weekly live streamed dialogues with Elliot and a series of guest thought leaders.
Joining Elliot as a guest for the first session is Judy Samuelson, Judy Samuelson is founder and executive director of the Aspen Institute Business and Society Program and author of "The Six New Rules of Business: Creating Real Value in a Changing World" (Amazon).Judy contrasts each New Rule with the equivalent Old Rule The first of the Old Rules says, “hard assets determine value” and “value today is equal to a discount of the future value of fixed assets and cash flow.” This contrasts with the first of the New Rules: ?
If reputation, trust, and other intangibles drive business value it is essential to know how reputation and trust are earned. As Elliot says. The answer is by ensuring that the values of the organisation are lived values that drive its behaviour; that they become virtues.
They are not driven by rhetoric and platitudes conveyed in communications from marketing and campaigns or by public relations messaging. These disciplines claim responsibility for “Reputation Management,” but doing so makes no sense and. Recognising this will require all directors and executives to rethink reputation risk.
JOIN US FOR THE START OF THE PROGRAMME ON THURSDAY SEPTEMBER 14TH for the first live session, “The Case for a New Approach to Reputation Management.” DETAILS
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Corporate Reputation Speaker & Trainer | Management Consultant | Specializing in Reputation Management Best Practices | I advise organizations on building, protecting, and enhancing their reputations.
1 年Corporate Culture remains one of the 3 top reasons for Reputation Risk. The problem though is that whose domain is interventions to change it? If we go by the belief that waterfalls flow top to bottom the it is leadership. Culture change is also the domain of OD and Organizational Behavior experts, as well as PR, HR and Governance. Changing culture requires systemic interventions. Joyce Wycoff wrote in her book “TRANSFORMATION THINKING” that thinking within an organisation?is defined as the mental activity of every member of the organisation…all the idea generation, learning and skill development, exchange of information, communication and problem solving that make up the intellectual capacity of an organisation. (Intellectual capital is the sum total of what everyone knows in the organisation). ? To transform culture and thinking patterns, attitudes and behaviors will need massive communication and OD style interventions.
Engineer, researcher, author, AI, LLMs, patient monitoring, healthcare innovation, digital transformation, business and care delivery models, strategy, preparedness
1 年This is a timely article. My admiration and congratulations for shining a light on this issue. It’s a tough one for corporations because they face systemic contradictions. The first is in setting standards of characters for managers, executives, AND board members. Character is a tangible intangible that follows people across time and social dimensions. Yet, as you correctly point out, people of questionable character do succeed and sometimes become icons. The challenge for organizations is in demanding both character and performance by making it clear that both are requisite characteristics of their management and leadership. Then we have executives who fail to perform and still walk away with unimaginable wealth. Some laid off workers in troves, while securing performance-free standards of compensation. Where does this fit? Finally, there is the issue of ‘reputational risk’ as a coporate objective. Frankly, if you need to put a Dollar or Pound value on reputation, then you may well be losing the war before the first battle is fought. Ethical people behave ethically without requiring financial compensation. So do organizations. Ethics and values are their own ends, not means to greater wealth. Good luck, Paul!
The Blended Capital Group - ESG, Governance, Strategy and Finance Integration Leadership Focused on Impact Delivery
1 年Thanks for sharing. This will be fantastic, worthwhile for anyone to attend. Elliot S. Schreiber, Ph.D. Is a worldclass expert on corporate reputation risk, his insights are penetrating. All business leaders should care, given that reputation is a corporate asset that brings significant value and advantage. Stakeholders that trust a company are stakeholders that collaborate. Trust requires listening, values, consistent behavior. Trust is about meeting expectations. Conversely, stakeholders who don’t trust are conflict issues waiting to happen and barriers to collaboration. Reputation is a critical advantage once it’s thought of in terms of impacts on stakeholder interactions.
Founder & Head Coach – Economic Engagement | Strategic Planning | Employee Engagement | Performance Management
1 年“Values should save you money, but they should also make you money,” Great observation Paul. What customer or employee wants to work with jerks they can't trust? This led to the demise of the once great GE. Companies that have excelled for year like Apple and Capital One have great cultures, as is the case for many smaller, less known companies. Our research with Harvard Business School on culture, which we call Economic Engagement, that is partnering with employees to serve customers, shows that companies who do have double the profit growth of their peers. More details can be found at https://www.inc.com/bill-fotsch/a-key-strategy-to-double-your-profitable-growth.html
Some 20 years ago, I carried out an experiment with a very old-style top-down public sector organisation with management which was uninvolved, rather than bullying. We got volunteers on both sides for junior staff to mentor senior staff on a one-to-one basis (organised by the brilliant Sue Lownds). For those involved (including me), it was an eye-opener, not just at the personal level but also in the shared experience of the junior mentors, e.g. in relation to behaviour at & effectiveness of meetings. It was a pity that it wasn't carried forward for longer, as, of course, those managers who were either over-confident or insecure about their performance didn't volunteer. I do believe that things like this can work well as challenges to a particular culture.