Reputation data can be a lever for strategic organisational change
Steve Shepperson-Smith has had a career of over 20 years in PR both in agency and in-house. For the past decade he has worked in global corporate communications roles and is a Director of the Chartered Institute of Public Relations. Here he looks at the importance of reputation measurement in the work of PR professionals.
The latest reputation measurement reports show a clear international leadership role for public relations (PR) within businesses as we exit the pandemic.
Reputation is now a significant driver or corporate value. Reputation Dividend estimates that reputation now underpins around a third of the combined market capitalisation of the FTSE 350 - £823 billion of shareholder value and in the US, around 30% of market capitalisations - US$11.2 trillion of shareholder value across the S&P 500.
Public relations teams, in-house and agency, usually play a key part in reputation management for businesses but seem to less frequently to also measure it, using quantitative data as a lever for strategic change.
The pandemic unlocked a sense of civic responsibility in organisations that is of growing importance in driving both higher reputation and differentiation. The PR industry has long argued that it can be the corporate conscience but can now quantify the value that has to the bottom line.
RepTrak, which measures reputation across 50 countries, found that the top 100 companies it monitors increased reputation by 2.5% year-on-year in 2021. This “strong” global reputation score is now at its highest point, maintaining a positive trajectory since 2018.
Global RepTrak 100 Reputation Score 2015-2021
‘Citizenship’(as RepTrak calls it) has moved from one of the least important drivers of reputation in 2015 to the third most important driver for global companies, including Lego, Rolex and Ferrari, six years later.
The recognisable pivot of business to become better corporate citizens is also increasing trust in those organisations.
Edelman’s 2021 Trust Barometer found that business is now the only institution seen as both competent and ethical. As trust in information sources has hit record lows, it is a huge opportunity for the PR industry that companies guarding information quality have 5.8% increased likelihood of trust. That is a strong challenge to anyone in a business wanting to stretch the truth in a news release.
Business is now more trusted than government in 18 of the 27 countries that Edelman surveys and 68% of its respondents believe that CEOs should step in when their government does not fix societal problems.
2021 Edelman Trust Barometer
The PR industry desires to work at a more strategic level in organisations. Practitioners should think not just about measuring outcomes rather than outputs, but shift budget towards reputation surveys that can help PR teams to take a fuller part in management discussions about organisation-wide strategic change.