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A company’s reputation does not necessarily have to be good or bad, the main thing it has to be correct.
The business community’s attitude towards reputation management has changed in several steps within the framework of Ukrainian business practice. During the times of economic growth reputation was confabulated and stories were told that it was the key factor of market compounding. During the times of “improvement” everything was decided by backroom dealing. Following the latest calamities – a financial crisis followed by a social and political one – reputation risks and benefits have become everybody’s preoccupation again.
Such fluctuations just stress that reputation is a paradoxical asset. One can develop it painstakingly and lose it practically in no time, or one may not develop it at all but become a “star” by a twist of fate.
However, reputation monetizes itself really well transforming the public opinion into profits and long-term competitiveness. The Sony Corporation that invariably belongs to a hundred of the most respected companies in the world scrambled out of losses in 2013 after the previous five years of recession: it finished last fiscal year in the black and restored 60% of its previously lost capital position.
According to experts, in respect ratings “consumer” corporate brands gave way to groundbreakers whose price is not so firmly fixed to profitability – only to expectations. And expectations are advance trust, the result of correct reputation. Neither good, nor bad, but correct.
A simple example. The Rothschilds and the Rockefellers are usually spoken about in a harsh, unkindly tone. They sort of create and destroy empires and juggle with the exchange rate. A controversial reputation. But as it has been created for dozens of years it is stable considering twists of fate. Correspondingly, it is the target reputation because it is profitable. At least for the Rothschilds.
One of my personal discoveries made not so long ago is the antifragile theory by Nassim Taleb, which is a scientific description of his “Black Swan”, that is some events threatening stability: entrepreneurs’ ups and downs of enormous force. The fragile arises when a painful feeling caused by losing an asset is greater than a pleasure of acquiring a matching asset. Antifragility arises in the opposite situation.
Correct reputation is bound to be antifragile and excessive like that of the Rothschilds. Its forging starts with assessing a reputation risk but not its benefit. Because it is to have an anti-crisis safety bag and be run by the system based on hyper-compensation (be ready for the worst and consider the best a just reward). Only in this case it will be antifragile. Frgaile reputation breaks during the very first crisis, antifragile reputation can stand practically all cataclysms and only grows stronger.
A reputation of any kind is built up in a saturated information space. That is why we should not go over the top seeking antifragility. Criticism is often the best way to increase reputation assets. Bill Gates’ criticizing welfare initiatives of Google aimed at providing the Internet to poor regions in Africa did not influence stakeholders’ trust at all. But it generated additional interest.
The same refers to the epidemic of fakes that has swept the world recently. An innocent but inconsistent with our target reputation fake irritates, a libelous campaign makes blood boil. Yet repelling information attacks successfully only improves one’s reputation. What should be done in a situation of the kind? First of all, keep calm. Have your reputation risks audited, assess your potential aggressors’ arsenal of “information missiles” – media resources, experience and traditional methods of their PR team’s work. And be a “hawk of peace”. On the one part, you should have your own “information missiles” arsenal at hand. On the other part, from time to time you should conduct campaigns for enforcement of your potential aggressors to peace. Nobody can prevent you from informing the society about their antisocial behavior.
Taleb has a good notion. People who deal with their reputation in the wrong way and who react to criticism nervously are named by him “bumps-that-depend-on-words”. Life won’t end tomorrow morning. So we should welcome its challenges as an opportunity to secure antifragility getting the best of changeability and diversity of the information space.
http://forbes.net.ua/magazine/forbes/1372127-hrupkost-sily