Article 26 Apr 2019

Dircoms and the challenge of reputational management

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There has been an undeniable evolution in corporate communications, which has changed in parallel with an increasingly demanding hyperconnected world that provides and consumes an immense amount of information. Against this backdrop, it is possible to look at the current role communication managers play and see how it is likely to change in the near future—or sooner—to make them the heads of their companies’ reputations.

Traditional communications manager: if you identify with this description, be worried

As a field, communications has traditionally acted in response to company goals of sharing messages regarding the organization, its philosophy and its values. Under this, the Dircom’s daily duties include organizing corporate events; preparing basic messages and news releases; acting as a company spokesperson; and managing relationships with the media, collaborators and other stakeholders (both internal and external) to reach predetermined communication targets.

This definition comes from the idea that communications is an administrative, or even operative, task rather than a strategic task in its own right. If your duties fit in with this description, be worried; you may soon cease to be valuable to your organization.

The “reputation” factor was always there, but we did not see it until the day it was discovered

Reputation is often built silently, without any direct indication it’s there or of the contributions it makes. The Dircom’s job is to manage that reputation and bring out its value to highlight their company’s good performance and growth.

There is another common, though undesirable, scenario that also reveals the importance of having an integral strategy to shield, protect or rebuild reputation: times of crisis. These situations require the company to rely upon contingencies to avoid losing the trust it has cultivated within the community and the associated negative impact on business.

Reputation is what the CEO does and says in the present, future and past too

In this information society, where individuals can produce and access content immediately (not to mention influence and distribute it), companies are more at risk of being criticized or judged according to their actions. There are two ways this happens: a company can build its own reputation and manage it for its stakeholders to assess, or it can let everyone judge how it does things without providing its own perspective.

CEOs used to be concerned only with behavior, not communications, but it is no longer possible to separate these concepts because how I communicate is how I behave. Therefore, communications has become a transformational force that forms part of a company’s behavior; now, it’s storydoing (telling it while it’s being done).

The Chief Reputation Officer

We live in the era of ethics, in which companies are perceived and ranked according to their behavior. Now, whether they are fair, ethical and sustainable adds value to their management in the eyes of stakeholders. In this context, the Dircom’s job takes a leap forward to focus on getting the company positioned in terms of its reputation—the essential intangible asset that will sustain and protect the organization’s leadership.

We are talking about becoming reputation strategists. The Chief Reputation Officer (CRO) leads the corporate communication strategy, working to consolidate trust and boost credibility in line with the company’s goals, target storytelling and storydoing toward stakeholders, generate interactions, listen to what people say about the company and analyze and evaluate its results. Along the same lines, positive reputational ratings work as a good indicator, showing that the company does things well and successfully communicates what it does. It’s a reflection of a sufficient focus on communications.

Even if you did not identify with the above, you still have time! Bring on the challenge

According a poll conducted by PwC (quoted in the Reputation Institute portal’s blog) that surveyed CEOs across the world, most senior managers are not entirely satisfied with what is available in terms of the information necessary to help them understand corporate reputation. This falls within the CRO’s mandate. Advising the CEO is a new challenge, and it requires professional development for the Dircom.

Companies like Nestlé or AB InBev could be considered benchmarks in terms of reputation management. While taking care of communications, their teams work on strategies that enable them to climb the reputation rankings, holding and maintaining the top positions at both regional and global levels.

What should you do if your CEO underestimates the importance of managing reputation?

It is no coincidence that the companies at the top of the global reputation rankings are those who most value trust. Each one of realized the importance of being valued and respected a long time ago. One example is LEGO, who ranks second worldwide in terms of reputation.

According to Mantener identidad y reputación corporativa (Maintaining corporate identity and reputation), an article published by Forbes February 2019, some recent studies valued intangible assets at over 70 % of total assets—and the only ones that cannot be duplicated.

If your CEO does not yet see the value reputation has for the company, these arguments will help begin to change their mind, making them reflect on this asset’s strategic value. In practice, you should begin to seriously evolve and develop your contribution by linking reputation to the business.

Carlos Llanos
Managing Director in Ecuador
Llanos holds a Master in Marketing and Commercial Management from the Universidad del Pacífico and a Degree in Information Sciences specializing in Journalism from the University of Piura. He has over 17 years’ experience as a consultant, during which time he has designed and developed communication strategies in the areas of finance, technology, mining, energy and hydrocarbons, mass consumption, professional services, tourism, construction and infrastructure, health and beauty, telecoms, entertainment and more. During his time with LLYC Peru, Carlos has managed Consumer Engagement initiatives and projects for clients like Backus AB InBev, BELCORP, Ésika, Huawei, McDonald’s and Saga Falabella among others.
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