Insight: corporate reputation

The company makes more than profits through the efforts of its employees; it
makes good vibrations or bad. Employees perform some important functions to
which most managements pay too little attention. As many of these services are
totally unpaid and can make a big contribution to commercial success, this may
not be the wisest approach.

What are these valuable, voluntary tasks that employees undertake for free?

First, whether you ask them or not, they put out messages about your operations
to all the audiences upon whom you depend for success. Second, they can tell you
what these audiences think about your organisation.

With imagination and management skill, this goodwill and powerful feedback
can be a bonus on top of their paid-for efforts. But however many listeners,
viewers or readers the communications may reach, no audience is as important as
your staff.

If personnel are not briefed and accept ownership of the corporate stance,
then external communications will be undermined as soon as this credibility gap
is exposed, as surely it will be.

Employees are a powerful part of the company marketing. They project messages
about the company and embody the brand. In a service business it is vital not to
underestimate the role that employees play ­ and their central role in creating
and managing reputation.

Why brief analysts, inform shareholders, woo institutions, persuade
customers, flatter legislators, or court journalists if you keep in the dark
those who have committed their working lives to the company? The influence of
employees (for good or bad) can be very significant. Poor employee relations can
bring down the company, while a well-motivated team can dramatically improve

Employees are the living face of the organisation and must project the values
that reinforce the reputation. Steve Gates, managing director of Denplan, runs a
company that provides sophisticated services to the dental profession. ‘As in
any service sector, you depend upon good relationships and a strong reputation.

Clients will only work with people and organisations that they can trust.
This means that every employee must not only believe in the company values but
also must project and demonstrate the reality of these in everything they do.’

Gates does not think it is sensible to allow this goodwill and understanding
to develop on its own. Everyone on the team reflects the values that the top
managers project. If customer care or integrity are slogans on the walls and not
part of management attitudes towards the business and the customers, then
standards of service delivery can go astray.

‘Good, consistent and continuous two-way communications across the whole team
is the only way to make sure everyone owns and is committed to the qualities
that make the company special,’ he asserts.

In Denplan, as well as communications being part of everyone’s job, the whole
company regularly goes away from the office for in-depth and candid reviews of
company policies, progress, new developments, issues, problems and solutions.
‘Our colleagues know they can say what they want to say and not just what the
bosses would like to hear. That way we are all always dealing with reality.
Therefore our service is not some conceptual idea, it is real and relevant. And
our client retention levels of close to 100% seem to confirm that these policies

The late Leonard Pool, chairman of Air Products, once told me that companies
rarely have the ‘wrong’ people, more often the wrong management methods. After
all, Sir Iain Vallance and his team created the BT success with largely the same
employees that had made the organisation an inefficient, work-to-rule,
unresponsive megalith.

But success is not permanent or guaranteed. Later, the same teams became
complacent and transformed one of the world’s largest telecoms operations into a
sad shadow of itself.

How was Asda changed from the who-cares to the customer-is-king style? This
success profited managers and shareholders alike, as it attracted Wal-Mart to
buy the company. The differences lay in the management, and the business
environment in which they could work.

There are, however, other factors affecting success which are equally as
important as good employee relations. Third party publics upon whom the
organisation depends are likely to form opinions based upon their observations.

For example, their decisions to invest in the company, write favourably about
it, lend to it, work for it, listen to it or buy from it will often be affected
by the attitudes of those closest to the reality ­ the employees.

Coordination and consistent messages are essential to creating a
well-informed and motivated workforce. To some degree, the corporate reputation
is dependent on listening and adopting, not just talking louder.

One of the best contributions that your employees can make is to act as the
eyes and ears of the organisation. You need to know what they see and hear when
dealing with customers, competitors, factory neighbours and other groups.
Everyone in the organisation is a member of the PR team. They should be
listening to public comments and feeding them back, as well as putting out
positive messages about the company.

Feedback systems play their part and there are many excellent books on how
these work ­ as well as organisations, such as The Work Foundation, which advise
on setting up team briefings and information feedback processes. These are
beyond the scope of this book, but there are some communications principles that
managers should consider.

Remember that the more open you are in briefing and providing information to
employees, the closer the coordination that you will need between internal and
external communications. This is one reason why these two aspects of public
relations are better coordinated through one person.

From long experience at the top in business, Sir Edwin Nixon, when deputy
chairman of NatWest, offered a word of caution: ‘Spend as much time as you can
on communications but, whenever you are communicating some important message
internally, you must assume that what you say will be transmitted externally,
sometimes to the press, sometimes in minutes, but certainly within 24 hours.

Write nothing internally without considering its impact in the public
How can the company ensure that it understands what people really think so

that communications are addressing the real issues and shaping the actual

A listening philosophy starts at the top. Leaders must lead but it is no sign
of weakness to listen before leading. Those who consider they know best, without
input, risk making mistakes; good decisions depend upon the views of others who
may be better informed or closer to the action. The listening chief can be truly
decisive; he or she can participate in all policy discussions because the views
of those affected are known. The listening chief listens!

Listening is an infectious habit. It can spread throughout the company and be
made part of the business culture. True listening ­ not the synthetic artifice ­
has kept Unilever, Cadbury Schweppes, Microsoft and Procter & Gamble at the
top. Listening proved a key factor in the recovery of Microsoft when it
underestimated the internet revolution. Lesser organisations might have failed
and missed this massive opportunity.

Checking the balance is simple. What would you want to know if you were an
employee? What would you like to know? What would you accept that you should not
know, for reasons of confidentiality, commercial sensitivity or otherwise?

However, the needs of employees in relation to information are rather different
from their legal rights.

At present there may be no statutory right for employees to know about the
anticipated development of their company, but it might be a very realistic need;
such information may ensure that they understand and support management plans.

Equally, employees might want to know what investments are likely to be made
that will affect their jobs. Where commercial factors or stock exchange
regulations limit the information that can be provided, employees will
appreciate this being explained.
The corporation needs trust and it should have the confidence to trust its
employees. And those who have tried will confirm how surprisingly loyal and
confidential employees can be when brought onto the inside track.

Pamela Taylor, then BBC director of corporate affairs, recalls how she
encouraged the director general to brief the top 160 staff on confidential
plans. This was at the time the BBC was going through controversial changes.
These senior managers included journalists in the news business (some of whom
were concerned about the direction of the BBC’s plans). Everyone respected the
confidence and there were no leaks.

Of course, directors will need to have a clear view of the information that
has to be provided by statutory right, union negotiation or trade precedent;
that should be provided in the interest of good understanding; and that is
confidential and does not have to be freely available until it is appropriate.

To build a company-wide public relations force requires skill and dedication.
Even if employees are content and well motivated, they may not see it as part of
their job to be positive in their discussions. A good moan may be a diverting
pastime but criticism of the company by one of its own can be damaging.

Do not make the mistake of thinking that information alone is enough.
Information is often not enough to change opinions or to foster the right
attitudes. It is quite possible for employees to know what the policies are but
not have an understanding of why they’ve been adopted. They may even resent

In one study, 45% of the workforce of a US company were not familiar with the
corporate mission, widely published in literature and proudly displayed in
receptions ­ but not presented properly internally. More seriously, even when
shown this, almost 55% either did not agree or felt the company was not
operating in the way it professed.

Communications should be organised so that employees are briefed directly and
ahead of getting the information through other channels. To be told about
developments one day and to read about them the next day in the national or
local paper gives this news a special interest ­ and treats the employee as a
trusted confidant. Reading that same news one day and being briefed on it the
next is demeaning and can create massive resentment.

Stock exchange rules on insider trading may prevent a company from briefing
employees in advance ­ but with planning, the workforce can be briefed virtually

Of course, shareholders and employees may want different information. Some
staff may require additional explanation if they are to understand fully the
significance of the developments. They will certainly want to know more about
how business and financial performance affects their jobs.

Sir Richard Branson, maintains that in running a company the priority must be
employees ­ even ahead of customers. If employees are well informed, supportive
and well motivated, he suggests that they are more likely to provide the levels
of customer service that keep clients coming back for more.

And if customers are getting the levels of service they want, this is more
likely to generate the returns to shareholders. Many companies reverse this
order and put little weight behind forming and motivating their employees ­ who
actually generate the profits.

When a policy decision needs to be presented, employees should be treated as
a priority. They need to have the opportunity to discuss such policies if they
are to implement them effectively. Employees should only be asked for their
views where the directors are likely to take notice of these in formulating
decisions. Where a policy has been decided, it is an insult to ask people for
their views.

Clearly, it is legitimate for a company to say: this is our policy, this is
why we have developed it, we would like to discuss this with you so you can
explore any areas of confusion and, when we have done that, we will be asking
for your support. That’s enlightened leadership, but it is not consultation.

This is an extract from Corporate Reputation, the Brand and the Bottom
Line by Roger Hayward published today by Kogan Page ISBN 0-7494-4408-8

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