Actively managing your company’s corporate reputation is no longer optional. Just ask Facebook. The company has suffered reputation setbacks over the past year and a half following a series of allegations and missteps; from proliferating fake news, to data and security breaches, to lags in leadership, Facebook’s reputation is now severely compromised.
Our firm’s data shows that Facebook’s reputation took a hit in late 2017 and has been in free fall for much of 2018. This has resulted in Facebook lagging behind in the U.S. technology sector by around 10 reputation points (on a RepTrak® scale out of 100) for much of the past year, while also seeing higher levels of market devaluation relative to peer companies and U.S. markets: In the first three months of 2018, Facebook’s valuation decreased by 14 percent, compared to a four percent drop for the S&P 500 overall.
Reputation key performance indicators (KPIs) should be:
- Holistic: Providing a clear view of the company through the eyes of all stakeholders and is consistent with its past, present, and future.
- Measurable: Expressed as a number that shows reputation trends across the company, industries and locations.
- Actionable: Affected by a range of variables that influence reputation and behavioral intention.
While the reputational impact of a crisis is clear, what is less obvious are the reputation gains that can be achieved by companies that choose to proactively protect and manage their corporate reputations. Companies with strong reputations outperform their competitors, seeing a 2.5 times better stock performance compared to the overall market. They are employers of choice: 57 percent of the general public would choose to work for a company with an excellent reputation....
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