FiftyOneZeroOne

Who “owns” reputation and relationships?

Posted on: June 28, 2007

In research I have been undertaking, two of the topics were the management of reputation and the management of relationships. One of my respondents, a top corporate communications person in a multinational firm, responded with a very good question – “Who is the owner of the relationship: the PR professional or the business line?” Acknowledging one of the favoured models in public relations is “PR = relationship management” (Bruning & Ledingham), he has raised the very challenging question of how can this model be operationalised.

Although public relations academics and practitioners are staking out this ground as their own, the reality in the maze of relationships between an organisation and its stakeholders is that they may not be able to control or even substantially influence this field. For example, they could do so in the relationships between the organisation and government and with communities in general but it is almost impossible to “manage” the relationship between a sales force and its customers, purchasing staff and suppliers, and the Chief Financial Officer and bankers. These are crucial relationships to the performance of the organisation and are “owned” by those who are responsible for, in this case, sales, purchasing and finance. 

In a recent Harvard Business Review* paper on reputational risk, Eccles, Newquist and Schatz propose that one person is put in charge of reputation in each organisation. Although 84% of respondents to an Economist Intelligence Unit survey in 2005 said it is the CEO’s job, the authors say, “the CEO does not have time to manage the ongoing process of coordinating all the activities that affect operational risk [including reputational risk]” (p.110).  

This person will be responsible for “assessing reputation, evaluating reality, identifying and closing gaps, and monitoring changing beliefs and expectations” (p.114). For this task, they suggest the COO, CFO or those with responsibility for risk management, strategic planning or internal audit as “they have the credibility and control some of the necessary resources to do the job” (p.114).

But what of the claims of PR/corporate communication people? “In general, those whose existing responsibilities pose potential conflicts probably shouldn’t be chosen. People holding top “spin” jobs such as the heads of marketing and corporate communications, fall into this category” (p.114). 

What strange logic. Why would the COO, CFO and functional managers not have “conflicts” which affect their bonuses and position within the organisation or their ability to take an objective view? As the heads of marketing and, especially, corporate communications are in contact with the widest range of stakeholders unlike the inward-facing senior management staff, surely they are best suited to the task of monitoring reputation and coordinating responses. They usually have a greater set of research skills than operations and financial senior management, too. 

What’s your view on this model of the single person to monitor and manage reputation and organisational relationships? Can it be operationalised or is it a coordination task? If it isn’t the CEO, then who should be responsible? 

* Eccles, RG, Newquist, SC and Schatz, R (2007) Reputation and its risks, Harvard Business Review, February, pp104-114

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7 Responses to "Who “owns” reputation and relationships?"

Tom – It seems to me that reputation and relationships are less operational than cultural: Much like values, you can’t really communicate them; you have to demonstrate them. The consideration of corporate reputation needs to be part of an organizational way of thinking, not merely an executional element.

With regard to relationships, audience/stakeholder would seem to be the determining factor — there could be a set of tactics that help to govern how leaders in the the organization work with people. But surely each of those leaders has to have a commitment to fulfilling the strategic objectives associated with each stakeholder — through the relationships with each.

Accountability rests with the CEO (who, ideally, should be more outwardly focused than inward) to attain the objectives related to both reputation and relationships. Whether he or she must be the operational manager for those things seems a moot point.

Sean: Thanks for the comment. Although you’re right in one respect – reputation and relationships have an intangible, ever-moving, ever-changing aspect, they do nevertheless have an impact on operations. A loss of reputation reduces the freedom of operation of organisations, especially if they become more closely regulated.

You’re right, too, that reputation is bestowed by others but aspects of reputation can be monitored by organisations and responses made, hence the HBR article’s proposal for someone we could call “chief reputation officer” although that’s an oxymoron.

Can your CEO manage all aspects of reputation? He or she is ultimately responsible but is it a realistic task to monitor and manage it along with all the other roles. I don’t think so, but should it be handled by senior management with no up-to-date knowledge of the width of external stakeholders? I think it should reside with those whose main functional and strategic roles are communication-focused. (You’d be great at it).

Tom, at the risk of blowing trumpets, I have a number of papers on the subjects and a current discussion on Toni Muzi Falconi blog (http://tinyurl.com/2h58aw) going on right now.

It does not matter in the least who ‘owns’ the territory. If PR keeps burbling on about reputation and CSR it just plays in the puddles instead of occupying the high ground. So be it.

Sean is right about the significance of relationships and values.

Organisations have value systems. They may be about products, services, employment practice, financial governance etc. and the values evident in such systems are adopted by people who form a nexus of interest. Sometimes these are internal sometimes external and sometimes a combination of both.

Where people in common subscribe to a range of these values they form their own group – a nexus of relationships (subscribing to a greater or lesser degree to the values). Most organisations believe that their nexus of relationships has the CEO at the top. It is a delusion for these nexi come and go wresting control, (forming, morphing, growing and shrinking) from the dominant coalition from time to time internally and externally. CEO’s need to be able to mange these groups which form as departments or inter departmental groups and, with ubiquitous communication available, at any and every level in the organisation.

The strategic and operational direction is embodied as values which work when they attract subscribers into a nexus of relationships based on common interest in the values. How many mission statements can we see that are painfully at odds with reality and the success of the organisation ( think Enron).

It is upon these values and these relationships that external relationships are built and sustained.

Where then lies the practitioner? At present I guess mostly in articulating the values of the most vociferous group (nexus) in the organisation that they are exposed to. Is it the CEO or is it the product manager? Practitioners then spread the values around which attracts people who subscribe to the values internally and externally. Hopefully, for most, this will result in an acceptable, if poorly understood, effect.

But there is a much more important role that can be played. It is in the exposure of the values that optimise value for the nexus of relationships that makes up the organisation. But these are values held both internally and externally.

Relationships have value and optimising this value is, in my book, where academics can help practice.

I realise that every economists and accountant, lawyer and salesman wants part of this space. The psychologists, sociologists and HR department want space at the tough too.

The winners will be those who interpret the theory to best effect. It would be useful if it was Public Relations so that the practice of public relations can use communications capabilities to better effect but applying the theory to practice separates out PR from communication (It is possible to have relationships without managed or assisted communication).

The papers are:

“Relationship Management” The Gauge – New York 2004
Relationships are the core value for organisations: A practitioner perspective Corporate Communications: An International Journal 2006 V11. No 1 pp 34 – 42
“Towards relationship management: Public relations at the core of organisational development” Journal of Communication Management 2006 V10 No 2 pp 211 – 226

David: Thanks for the feedback and the guide to the papers and the Toni Muzi Falconi blog. I don’t we can dismiss the question over who “owns” reputation as you do. It’s a live issue in organisations as shown by the question posed to me and in the HBR paper. I accept and write in papers that reputation is bestowed upon an organisation and is an holistic process within that organisation, but someone (person or function) has to monitor the reputational standing. The HBR paper says it should be handled by a disinterested person but there is no-one in an organisation who is totally objective about it. So my suggestion is that it should be a function of those who are is contact with the widest range of stakeholders and that’s likely to be communications or marketing.

It’s taken me a while to get back to this. I apologise.

One has to accept that ‘reputation’ is a live issue among managers of organisations.

However, the management responsibility is reneged on in too many cases.

I picked at random a web site (a bank as it happened). It is typical of many corporate web sites. The first sentence on the site says:

“People need different things from their current account and that’s why we’ve designed a range of current accounts with features to suit the needs of all our customers.”

The cynic in me says:

Mostly people want some core assurances when they use a current account – like fair service charges. So customers need a number of things in common. I could get VERY cynical and suggest that there are some gullible customers who get a raw deal out of the designer account approach.

They have designed a range … for their customers… So? That is why they are customers does this mean that customers who want something else had better shove off?

Does this statement infer that non customers had better watch out – there is nothing here for you?

My point is that who ever is responsible for ‘reputation’ cannot see that the value systems that are pasted on the front door of their biggest retail outlet (the web site) is not taking its values very seriously if in a few seconds I can rip their key statement to shreds. And, compared to the 1.1 billion potential visitors to this company’s front door, I am quite benign.

Does this reflect on the dominant coalition?

You bet!

Has the ‘reputation manager’ any teeth?

Nope!

Do managers really take an interest as you describe in the HBR paper?

In truth, it does not look like it when I am in a cynical frame of mind and visit their biggest branch/web site. It looks and feels like muddled thinking, kiddology or self-delusion, or all three. Both barrels are smoking and point south.

Who owns reputation? The CEO who makes it clear that hype and spin are not an acceptable alternative to corporate values only has to say it once. That small statement is, in itself, a value system and while the CEO is at, or is mostly at, the nexus of the values of the organisation the words are law.

By letting spin loose and then nailing it to the front door, the CEO looses the place at the head of the organisation’s values and hands it over to the marketing department’s copy writer. Who now has control of the company value systems?

Meantime, when we try to measure reputation is slips though our fingers. It is holistic, it is awarded by a huge range of publics who, from one moment in time to another in the context of environment and interactive capability deploy their values (a Social Frame) and adjust their their view. Reputation is very intangible. Values less so.

Does it really need a dispassionate observer to monitor reputation and if so how?

Or is a much tougher person needed who asks who the devil is in charge of the values? Copy writer or CEO?

Until the value systems are sorted, one might suspect that reputation is inconsequential or at best frail. Without value system coalitions (relationships), there is no organisation, with muddles values, the coalitions fracture. The pay cheque and CSR bling are then not much more that a bribe to keep the edifice up while the revolving door churns PR advisers.

Hmmm… sort of prescient, I regret to have to point out. It seems that when there there is no-one in an organisation who is sufficiently intellectually robust to be totally/sufficiently objective about reputation, the organisation is best in public ownership with the intellectual honesty of politicians in charge of reputation (as well as operations).

We do have some new work to do on the nature of transparency as well. Which is another debate.

David, I don’t follow your logic. To suggest that organisations with reputational problems should be in public ownership under the control of politicians is like putting arsonists in control of fuel supplies. Unless I misunderstand your comment andyou are being heavily ironic or sardonic, your solution just takes us back to the massive problems that arose from nationalisation in the Wilson era that resulted in industrial relations breakdown and 25% inflation in the mid-1970s. It’s bad enough now but we don’t have those factors to deal with.

My original point was more related to the management of organisational relationships with a range of publics and stakeholders.

The discussion point came from a top corpcomms director in a TNC who was questioning whether PR people could legitimately claim to be the organisational relationship custodians. His point was that these responsibilities were shared on a functional basis with the PR function having an overview on monotoring of relationships and reputation but not necessarily on management.

I don’t think the drastic change in the world financial situation has changed the case he made other than to dramatically sharpen the need for robust relationships and attention to reputational detail.

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