I believe that the dollar value of improvements to a company’s reputation is difficult to quantify.

By its nature, reputation is an intangible and complex concept. It takes a long time to build up but it can be destroyed instantly. Reputation is used so casually in celebrity cultures to claim certain unique traits that some individuals may have. No company would claim that reputation does not matter. I tried at one point in my presentation to argue that reputation must be identified as an asset on the balance sheet.

If something is so important to the extent that it affects the confidence of investors or your staff, customer behaviour and your sales then it qualifies to be on your balance sheet.

There is a fine line between success and failure when it comes to reputation. Reputation can easily be classified under capital; some scholars have termed it a part of relationship capital.

It’s also not easy to manage; it can easily be dented by an overzealous customer service representative or an irate security guard. It can also be built over many years of diligence.

Take for instance, Malaysia Airline is battling to repair the massive damage to its reputation due to widely publicised incidents involved two of its aeroplanes this year alone.

Prior to the two incidents the airline had managed to fly without any incident with the last recorded incidents occurring in 1995 where they lost 49 passengers and in 1977 where a total of 100 people died.

Experts believe that it will be very difficult for the airline to recover from the current crisis.
They also contend that the manner in which it handles the two issues will have a huge bearing on whether it will be able to rebuild its reputation.
However, it is becoming increasingly difficult to control the flow of information due to the advancement in technology.

While technology has given companies a tremendous advantage to disseminate information it has on the other hand been their major undoing in terms of crisis.

A lot of information has been released via twitter, whatsapp and the media on the two incidents, which has not helped the airline’s efforts to salvage its reputation.

A good reputation is very useful. It helps your company on a lot of things including optimising shareholder value through attracting customers and high quality staff.

Many people confuse a brand and reputation, they are different. A brand is created by an organisation.
It is a well throughout and defined process that is controlled by management. On the other hand, a reputation is defined by the outside world, that which the external world attributes to your organisation.

A brand and a reputation may not be cohesive. We might define ourselves as an organisation that meets a certain need while the world may see us differently.

Past behaviours as well as future actions normally reflect in many cases what the organisation reputation is.
If these are brought together with the standard measurement of what the marketplace is dictating then we know that we have tried to address the value of a company’s reputation.

If you have a reputation of supplying sub standard mechanic spares, then you decide to upgrade your procurement policy, you will need time to acquire a good reputation of supplying quality products because you are being judged by your previous performance.

Balance the equation, don’t be too fearful about denting your reputation, you can never operate a successful entity always fearing that something will go wrong , rather always consider what opportunities can be realised by your actions.

According to the 4th annual Reputation Quotient survey, Harris Interactive rated 60 large American companies based on six key characteristics including product quality, trust, social responsibility and how employees are treated. Coca-Cola , Apple, Disney, Google, Johnson were amongst the top 10.

Reputation is as fluid as water, a good one is easy to lose, a bad one is hard to lose. This may be the time for enthusiasts to try and value reputation.
I may have to write a thesis and a paper to convince insurance companies in Zimbabwe to value our reputation.
Would they be prepared to offer a premium to cover reputation or maybe the moral hazard is just too great to cover.

Till next week, may God richly bless you.

Shelter Chieza is an Advisor in management issues. She can be contacted at [email protected]

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