GLOBAL: Reputation is regarded by business leaders around the world as a top priority, but a new survey shows that four in ten admit that their own organization is vulnerable to risks in this regard.
The British Standards Institute (BSI) surveyed 1,263 senior executives across ten business sectors in three regions (UK and Ireland, USA and Asia Pacific) for what it claimed to be the world’s first benchmark of Organizational Resilience.
Out of the 16 elements that make up Organizational Resilience, reputational risk was seen as the most important, ahead of financial aspects, leadership and vision and purpose – a finding that highlights the vital role CMOs and their teams can play.
But despite this recognition of the significance of reputation to the long-term success of their business, 43% of respondents believed their organization was strongly susceptible to reputational risk.
The perception of the level of reputational risk was found to vary by geography. Globally, 62% rated their organization’s current reputation as excellent or very good, but this figure rose to 75% in the US and fell to 55% and 56% in the UK and Ireland and Asia Pacific respectively.
“It is encouraging that business leaders understand that success is measured by more than market share,” observed Howard Kerr, Chief Executive at BSI. “However, our culture of instant communication means that reputations can be destroyed in minutes,” he added.
Ironically, it is a PR firm that has most vividly demonstrated this recently. After being expelled from the UK industry trade association, Bell Pottinger was last week put into administration as many of its clients had left in protest at its role in a secret campaign to stir up racial tensions in South Africa.
Separate research from Reputation Institute has shown that reputation drives business results: for companies with an average reputation only 23% would buy their products, but this grows to 39% if the reputation is strong, and to 77% if the reputation is excellent.
“The impact from reputation on the business is massive, which is why the leading companies in the world are managing this asset in a systematic way” said James Bickford, Reputation Institute's Managing Director.
The BSI study also reported that horizon scanning was the least important aspect of resilience, with one third believing their organizations are average to poor at this function.
Data sourced from BSI, Reputation Institute, Guardian; additional content by WARC staff