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 productivity.

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 work.’

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 domain.’
How can the company ensure that it understands what people really think so
that communications are addressing the real issues and shaping the actual perceptions?

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 them.

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 simultaneously.

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 £19.95

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