Insight Corporate Excellence.

1. Insights
Strategy Documents
I18/2012
Communication
Reputation: the Future of
Corporate Communication
Understand the new circumstances, adapt to them and win: communication and
public relations are now at a turning point, and if they are unable to understand
the new rules of the game and adjust to them, they may lose their leading
position.
Paul Holmes, a journalist and editor of the A company with glass walls will soon become a
prestigious The Holmes Report has never worked reality, because according to Holmes, everything
in the communication sector or PR agencies, but is that is said, done and thought by an organisation
very familiar with this industry: he has been writing is subject to close public scrutiny like never before.
about the industry for more than 20 years, he saw it Managers responsible for Corporate Communication
growing, transforming and superseding advertising and Public Relations of companies have to be aware
in the task of building and defending brands – in the that any individual, the mass media or an NGO
way advocated by the expert Al Ries–. can at any moment take interest in the activities of
the company and that in the globalised world any
However, the radical change in the digital action may have unexpected negative repercussions
environment and the society brought about the need for the reputation of a brand.
to understand its impact on brands and organisations,
which puts the communications industry in a In the past, the financial press only reported about
vulnerable position, forcing it to face the new the changes in the market value of listed companies
challenge and turn it into an opportunity to survive. or employee actions against the employers due to a
Otherwise, other important actors in companies, labour conflict. Nowadays, more attention is paid
such as marketing, HR and advertising professionals to the environmental damage, treatment of the
in large U.S. companies,will be promoted to the employees, the type of leaders in the management
position of Communication Directors. This was committees, to the reports like, for example, an
described by Holmes during a conference held by the advertising campaign carried out by this or that
Association of Communication Directors in Madrid. brand that was misleading and/or insensitive to the
feelings of social minorities.
The era of transparency
Daniel Goleman coined this term to refer to the The brand is not only what you say,
current moment, when the need for open and but also what others say about you
honest communication without borders is required The idea that important information about a
by the society and different stakeholders, both in the company is provided by Communication Directors,
business and political environments (a good proof of PR or advertising agencies stayed in the World
this trend is the recent phenomenon of Wikileaks). 1.0, where the digital impact of communities,
The document was prepared by Corporate Excellence and contains references to the statements made by Paul Holmes (journalist and
expert on the sectors of communication and public relations, author of The Holmes Report) during the conference organised by the
Association of Communication Directors in Madrid, on February 21, 2012.

2. Reputation: the social networks and interconnectivity of different control the situation, and this is exactly what’s
Future of Corporate stakeholders was not yet present. happening in the World 2.0.
Communication
The number of stakeholders has increased, Consumers, employees and clients speak openly
furnishing them with greater control – in terms of about brands because no one can control what
opinion – over the companies. They share their they say. This means exactly the loss of control by
experiences and views of companies – and slogans the brands. The rules and principles of the brand –
are not sufficient any more – making their reactions stakeholder interaction are now different: they are
unperceivable, quick and hard to monitor. In this about dialogue, integrity, transparency, authenticity,
sense, the role of the employees comes to the fore, honesty, commitment…
as they can evaluate their own experience with an
organisation and compare their opinion with the
reputation gained by the brand among external “A company with glass
stakeholders: after all, they are responsible for walls will soon become
fulfilling the promise made by the brand, because
the behaviour and attitude of the employees has a reality, because
more impact on the consumers’ opinion than any everything that is said,
advertising campaign.
done and thought by an
The new social media are accelerating this trend, organisation is subject to
at the same time becoming a source of important
competitive advantage for the communication close public scrutiny like
professionals in the sense that it enables them to never before”.
expand their responsibilities, traditionally focused
on relations and managing the dialogue. But this
In order to achieve engagement and involvement
may be possible only if they manage to generate
of stakeholders, it’s necessary to establish a
positive and attractive content with a social
more direct, clear and transparent relationship
impact, like the one achieved in the past with the
with them. It is still important what brands say,
help of advertising.
but their actions are much more important for
defending and determining the reputation. And
Until recently, it was believed that the brand was
stakeholders base their opinion and awareness on
the only message made the by a company. And in
the perceived reputation.
such context it’s no wonder that advertising played
such an important role. But everything has changed:
now, the brand is not only what you say (intended Reputation Manager and Cutting
projection of the identity or creation of an image), Across the Divisions
it’s also what others say about you (unintended The implications of these changes for the companies
projection of the identity or perception of the go far beyond communication and directly
reputation), especially if the company does not affect the financial, legal, labour and operational
Graph 1: Valid Metrics Framework Template
Communications/Marketing Stages
Key Area of Knowledge / Interest / Support /
Communication Awareness Action
Understanding Consideration Preference
Communications Phases
Public Relations
Activity
Intermediary Effect
Target Audience Organization/
Effect Business
results
Source: Paul Holmes, Dircom, 2012.
Insights 2

3. Reputation: the activities. That’s why some American companies of reputation management in order to attain
Future of Corporate start establishing a new role that reports directly corporate excellence.
Communication
to the CEO and is responsible for relations with all
stakeholders and whose task is to tell the CEO what In order to ensure the implementation and to
he or she sometimes doesn´t want to hear. demonstrate the impact of these activities, it
is essential for the world of Public Relations
This new function expands the role of the Chief to improve the mechanisms of measuring the
Communication Officer in the sense that it no effectiveness. So far, only insignificant amounts
longer covers only what the company says, but also of money were invested in the research on this
what it does, its strategic decisions taken by the matter and development of the models apart from
top management which affect the experience of the traditional evaluation of press clippings and
different stakeholders at different points of contact monitoring comments on the Internet.
that they have with the brand. That’s why persons
in this role in addition to being professionals in
communication, should have good knowledge of
“The brand is not only what
the business in general. you say (intended projection
of the identity), it’s also
Below are seven key responsibilities of this post:
what others say about you
1. Develop synergies between different departments, (perceived reputation is the
overcoming traditional divisional structure of
the organisations. true identity)”
2. Ascertain that the values of the Brand are
Holmes advocates a unified model of measurements
shared and implemented by them in their daily
focused on the business of the company - a standard
communications and interactions with the
similar to the one used by the Association for the
stakeholders.
Measurement and Evaluation of Communication
3. Transmit these values securely, naturally and
(AMEC) – which would relate the impact of
credibly together with the organisation and
communication to business results. Holmes also
outside its scope.
supports the concept of the Net Promoter Score (NPS),
4. Contribute to understanding the market, the
suggested a few years ago by the American expert Fred
society and the expectations of stakeholders
Riechheld. This index measures recommendations of
in order to achieve their favourable judgement
the brand made by persons in one´s immediate circle
and support.
(friends, relatives, colleagues, etc.) and correlation of
5. Align different messages and policies of the
this index with the results of the enterprise.
company in order to achieve full coherence.
6. Achieve alignment between the identity and
corporate culture of the brand, the business Conclusion: the golden age of
strategy and the reputation of the company. communication and public relations
7. Facilitate permanent improvement and The next ten years may become the golden age for
transformation of the organisation by means corporate communication. Public Relations are now
Graph 2: Leveraging Net Promoter Score
On a scale of 0-10, How Willing Would You be to Recommend [GE Money] to a Colleague?
10
9-10 Promoters
9
8
7-8 Passively
Satisfied 7
% Net
6 % Promoters – % Detractors = Promoters
5
4
0-6 Detractors
3
2
1
0
Source: Paul Holmes, Dircom, 2012.
Insights 3

4. Reputation: the at a turning point, moving from the primitive role of Creation of value for the owners of companies has
Future of Corporate a transmission channel for announcements made by to be compatible with creating greater value for the
Communication companies to a channel of communication between stakeholders and the rest of the society.
the stakeholders and the brands that enables the
company to monitor their concerns, suggestions, The era of business and life transparency and
expectations and desires. ethics suggests a radical change in the interaction
between organisations and their stakeholders,
Clients, employees, shareholders, consumers and where sincerity, honesty, integrity, credibility
users are now the new owners of the brands. The and engagement are key in the relationship
most important issue now is their reputation and between the brands, their environment and the
the opinion that these groups have of the brands. rest of the society.
Insights 4

5. ©2012, Corporate Excellence - Centre for Reputation Leadership
Business foundation created by large companies to professionalize the management of intangible assets and contribute to the development
of strong brands, with good reputation and able to compete in the global market. Its mission is to be the driver which leads and consolidates
the professional management of reputation as a strategic resource that guides and creates value for companies throughout the world.
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