Why there is no second chance when it comes to reputation

...and what the People Team (HR) can contribute to corporate reputation.

Reputation is a small word with an enormous impact – and a particular property as well. Duden describes reputation as [good] standing, with synonyms including recognition, good name, and esteem. Strikingly, there is no plural for the word. Could this imply that there is only one reputation? And if so, that would certainly once again highlight the delicacy required when it comes to handling reputation.

Let’s use recruitment and hiring to illustrate. Naturally, reputation begins with the application process. While many things can, and often do, go right in the recruitment process, just as many things can go wrong. For example, it’s likely that you know someone who applied to a (supposedly) brilliant company full of anticipation – only to experience bitter disappointment when coming face-to-face with the company’s culture. That’s precisely what recently happened to a friend of mine after applying to a start-up whose products and job ad had entirely sold her on the opportunity.

Of course, she wanted to be part of the innovative company! After a second personal interview and being told they would get back to her within the next few days, nothing happened. Even after following up, weeks later, if they had decided on someone else: “radio silence.” And just like that, my friend suddenly didn’t find the products so intoxicating and the company anything but attractive. Worse, from the company’s reputational standpoint, she recants this story to all her friends and acquaintances. The outcome: a catastrophe for the company’s reputation, not to mention the business. Not one person in her entire circle of influence is willing to buy products from this company.

The takeaway? A strong reputation is precious. It can take what seems like an eternity to earn but be completely destroyed in a single instant. It is a decisive advantage to be aware of one’s reputation as well as the intrinsic connection with employer brand and managing appropriate. This not only means keeping an eye on employer reviews on sites such as Kununu & Co but proactively strengthening the employer brand and avoiding potential shitstorms altogether. No wonder it is considered a competitive advantage when it comes to winning over employees, customers, and other stakeholders. A positive reputation is like oxygen for an employer brand: it breathes life into it.

Reputation is "contract-relevant”

Companies enter into all sorts of contracts, some explicit, others implicit. Well-defined purpose, structures, and goals, as well as consistent integrity and reliability, all pay off in terms of a good reputation. These fundamental elements should also be reflected in the employer brand. Employer branding must deliver what the reputation promises. After all, candidates cannot be lured over the long-term by inconsistencies and empty promises. Transparency, credibility, and relevance, on the other hand, reinforce and help to ensure that employees, customers, and all stakeholders are happy to enter into a long-term psychological contract with a company.

The value of a consistent employee experience

If reputation and employer brand match, tasks become personal concerns. Employee “commitment” has a positive impact on a company’s productivity and bottom line. Therefore, a consistent “employee experience” plays an essential role in consolidating reputation and strengthening commercial, corporate success. At the heart of this are three questions:

as an employer, how can I align my customer promise with the employee promise and make this an inspiring and relevant experience for employees on a day-to-day basis?

what leadership behaviors are needed to achieve this?

which employees fit best into our corporate philosophy?

Potential employees no longer choose an employer solely based on product brand. Instead, they evaluate the company’s overall reputation and how that aligns with their personal values – and this trend is only likely to strengthen. Gone are the days when fancy, glossy brochures blinded prospective and current employees. A company’s investment and financing strategy, as well as its stakeholders and image of individual managers, are playing a more significant and prominent role in assessing an employer’s attractiveness. Today, younger people in particular, are interested in knowing not how and where a potential employer invests its money but by whom finances it. And as scrutiny from all sides increases, violations regarding promises sustainable and fair production of goods or the involvement of financial backers in dubious dealings have been the reputational undoing of some companies.

Reputation - A collective responsibility

Reputation is an ongoing affair and should involve representatives from each business unit across an organization. COVID-19 and the measures taken as a result have made the seemingly impossible possible, namely shifting centralized, top-down decision-making to more inclusive approaches which encompass companywide leadership. It has also given us an impressive demonstration of how this can be achieved: Companies formed so-called crisis teams within a very short timeframe and appointed knowledge holders from the entire company to this team to find solutions together. From my perspective, such approaches should be leveraged post-crisis and transformed into permanent “councils,” empowering organizations better to manage the various internal and external needs and demands, and thus reputation.

An efficient alternative to this is establishing the role of a Chief Reputation Officer (CRO). The CRO’s job is to alert management to potential reputational risks and opportunities. The CRO keeps an eye on everything that is happening around the company; she or he analyzes, anticipates, and acts in an interdisciplinary manner to positively shape the company’s reputation and avert what could harm it.

Reputation officer as a role model

A CRO does not necessarily have to be a separate or even additional position. The role can be implemented and filled in an SME on a rotating basis, and it is, in fact, often advisable to do so. Under this model, qualified job holders from HR, communications, PR, risk management, or other trusted advisors and storytellers take on the role for a defined period of time – for example, one year – and then pass the baton. The rotation principle has some significant advantages:

several functions assume responsibility for the topic of reputation on an alternating basis and thus actively shape positive corporate reputation from different perspectives.

the role model allows one person to focus on the overall reputation of the company.

the temporary assumption of the role allows new impulses from different perspectives.

the role model prevents the respective role holders from being overly constrained and criticized, as other managers also “hang their hats” on an alternating basis (checks & balances).

the alternating role model is an effective personnel development tool for the respective role holders and can be used as part of talent development at the management level.

Conclusion

In today’s digital age, more than ever before, companies cannot afford a bad reputation or a tarnished employer brand. The goal must be to actively, consciously, and consistently cultivate a reputation for a higher company value rather than only focusing on its importance when threatened.

And this is precisely where the People Team (HR) can provide valuable contributions through objective, insightful input, and professional services. Just as a corporate body or legal entity can be held responsible for a business offense, your name is inevitably linked to the company’s reputation. It is therefore advisable to regularly put yourself in the shoes of potential employees and customers. What is your expectation? Do you, as a company, as the person responsible for People, act accordingly? Simply answering these questions can be pretty revealing by itself.