In B2C customers buy from brands, but in B2B they buy from people. This is why CEOs need to focus on reputation. If you’re a CEO leading a B2B, how do you unwind your personal reputation from company reputation? Which comes first? How do you manage both? Which should you prioritise?
These are questions I’ll be exploring in a short series, but first …
Let’s take a brief look at reputation
Charles Fombrun is the reputation scholar who articulated that good reputations create wealth. In his 1996 book Reputation: Realizing Value from the Corporate Image, he shows that reputation ‘is a form of intangible wealth’ that accountants call ‘goodwill’ and marketers call ‘brand equity.’
Fombrun’s definition of corporate reputation is ‘a perceptual representation of a company’s past actions and future prospects that describes the firm’s overall appeal to all of its key constituents when compared with other leading rivals’.
While his definition is quite simple, he does note that it is an ‘aggregate’ – of a cognitive perception of its ranking in comparison to competition in the same industry, a personal perception by each of us as individuals, and a conglomeration of all multiple images held of that company by all its constituents. This idea of reputation as an aggregate makes it hard to pin down. Later academics call this ‘multiaspect’.
Then add stakeholders
CEOs are communicating to a wide variety of stakeholders, including employees, customers, investors and the general public (who are potential future employees, customers and investors). John Jeffcock, author of The Suite Spot, includes the environment as a CEO or Board stakeholder, which speaks to the environmental pressures all companies face.
What employees want (stability, an annual inflation-matched pay raise, a path to promotion) differ from what investors want (growth and returns). Add customers, who in B2B, tend to have long-term, complex, expensive engagements, and the intricacy of being all things to all people starts to emerge.
However, that’s fine when everything is stable.
What if there’s a crisis?
The potential for crisis is everywhere and all around CEOs. It can be generated by any of the stakeholder groups, or by the unknown. Crisis differs from reputational risk in that it is an active situation of threat, characterised by emergency and lack of time. This time pressure often leads to bad decisions that later need to be rescinded or walked back, which has reputational effect.
Don’t forget social media
When Fombrun was writing about reputation in 1996, Mark Zuckerberg was 12 and social media as we now know it did not exist. His definition of corporate reputation focuses on past actions and future success – but it leaves out the now. Social media brings reputation into the present and makes everything CEOs say and do immediate and heaps complexity onto how the ongoing conversation between business and society.
It's complicated, people
With this level of complexity, lenses being trained on CEOs, people watching and waiting to see how they respond and what positions they take, it is no wonder that some CEOs feel threatened and shy about communicating.
CEOs are expected to contextualise their companies’ positions on a raft of complex social justice topics. In business, they face disruptors, the drive to keep innovating, the post-Covid fallout of navigating distributed work, as well as the challenge to keep customers happy and business stable.
However, silence is not an option.
It's a matter of how. What is the path CEOs need to take to earn reputation for themselves and their business in order to meet customer needs, garner employee support, change behaviours, demonstrate growth to investors and engage with external, often critical, voices?
I'll be dealing with these in a follow-up post.
Charlotte believes that in the attention economy, strategy and story need to be symbiotic.