Why Executive Reputation Is Important: How the C-suite Affects Your Brand and Bottom-line Revenue
A company’s success depends heavily on the level of trust consumers have in the business. Whether it’s the quality of a product or a company’s commitment to eco-friendly practices, a positive reputation is critical for the longevity and profitability of a business. One of the leading influences on a company’s reputation is the executive’s reputation.
Defining Reputation Management
Managing your company’s reputation involves constantly monitoring how customers perceive your business’s various aspects. Because of the digital age we live in, a good reputation is either supported or sabotaged by online communication. This is either in the form of social media comments, online reviews, or other consumer outlets.
A company’s success is tied to an executive’s personal brand. Knowing the weight of their actions or speech means emphasizing more than just brand management. Managing a CEO’s reputation is just as important. The exposure from platforms like TikTok, Instagram, Facebook, Twitter, and more makes prioritizing reputation management more than just a good suggestion.
Since CEOs are the company’s most recognized or public faces, any opportunity for the public to make a judgment or create an opinion of the CEO must be carefully managed. Social media is often the filter through which the public assesses a company’s and CEO’s reputation. Every online activity should support and promote the company’s mission and values.
Online reputation management involves building, managing, and maintaining the perception of the business, brand, or related individuals through online channels. It’s similar to public relations in that all activities are to create a positive outlook for your company’s brand. A favorable brand perception leads to building your company as an industry authority, increasing the consumer’s trust and generating more sales.
Online reputations come under fire from negative consumer comments, unfavorable search results, or damaging brand mentions. With so many opportunities for negative publicity online, managing a brand’s reputation depends on how thoroughly the management team can identify risks.
In addition to the impact of the executive or CEO’s decisions or behaviors and the online presentation of a company, the reputational damage can come from any discrepancies between what the company has done or said and what the customer perceives has been said or done. Things that negatively impact the company’s reputation include cyber-attacks, regulatory breaches, employee indiscretion, product liability cases, and more. Any damage done can ruin a company’s market value.
Deciding the Role of CEO Reputation Management in Reputation Management
Business leaders face constant scrutiny from consumers, the media, and regulatory agencies. Their reputation is one of the company’s most significant assets, making reputational risk a serious threat to the success of a business. Reputation management services proponents argue that a company’s value hinges upon protecting against reputational risks. Given the high profile exposure that accompanies CEOs and the influence held over company decision-making, managing their personal reputation is the first step in protecting company value.
As CEOs learn to manage their risks by taking control of their reputation, there are some basic goals to establish when managing their own brand narrative. These include:
Establishing a clear company vision
Displaying honest and ethical character
Taking a motivational and inspirational approach to others
Practicing strong internal communications
Caring for the company culture and employee well-being
Demonstrating a global business outlook with a contact focus on the customer
These are just a few of the company values an executive must determine and uphold to protect their reputation. Although public appearances play a role in reputation, any presence on social media is a reputational risk.
Managing Online Reputation
In the past, financial and industry analysts had the most significant influence on the public persona of chief executives. Their input shed light on corporate decisions, but this information was often well beyond the interests of the average consumer. Thanks to the digital age, the average consumer gets the credit for negatively impacting shareholder value.
It’s not just about what the CEO says using online accounts. It goes further into what isn’t said, as well as the audience, the location, and so much more. When people develop strong opinions about what they perceive is happening, social media is often the first place they express them. This is usually in the form of critical social media comments, poor company reviews, forums dedicated to the discussion, personal blogs, and more.
The serious impact of the CEO’s negative or positive reputation on the entire company makes any public or online exposure a concern. The CEO’s online presence is undeniably connected to the company’s online image and the overall perception that brands should take CEO reputation management seriously. Making reputation important could be the deciding factor between long-term success or bankruptcy.
Cultivating a Positive Reputation
It doesn’t take long to find examples of reputational damage from the comments or actions of business leaders around the globe. In an instant, a well-recognized brand can face significant backlash. So much so that there is a devastating drop in the company’s market performance. A few names associated with bad press, angry customers, and terrible results on a Google search include Lululemon founder Chip Wilson, BP’s former CEO Tony Hayward, and SpaceX founder Elon Musk.
It takes a lifetime to build a CEO reputation, and one ill-timed or ill-worded online comment to ruin it. With a CEO reputation management strategy, the focus isn’t just on what is said but when, where, and who it’s spoken to. Consumers, employees, and stakeholders alike appreciate when business executives respond to incidents and problems promptly. The company’s ability to bounce back from challenges depends on how well corporate leaders respond to the situation.
Influencing the Corporate Reputation Through the CEO’s Online Reputation
It’s common for CEOs to have separate social media accounts from the company’s accounts. Even though there is a separation, the CEO is expected to adhere to the rules of corporate social responsibility in order to protect the company’s image.
The basic tenets of CSR include:
Respect for the law
Respect for stakeholder interests
Respect for human rights
Respect for norms of behavior around the world
By considering personal reputation as an influencing factor on the corporate reputation, brand ambassadors can develop a strategy that improves both their own social perception and that of the company. While a personal brand is separate from a company’s, CEOs don’t have the luxury of cultivating their image without worrying about the impact on the company.
Strategizing How To Improve Revenue Through Reputational Risk Management
Financial success and long-term profitability hinge on successfully developing CEO reputation. Statistics show that over 81% of consumers do online research before buying. This is why cultivating an online reputation is essential. In addition to a company website or social media presence providing the information consumers want, e-commerce accounts for just over 20% of global sales. Missing the mark on the online narrative means money is lost or left on the table. Fewer sales result in revenue loss, but over time, a stagnation in sales jeopardizes the company’s growth and longevity.
Online Reputation Management Using the CEO Reputation
Guarding the company’s brand requires managing reputational risk for the CEO. Any time the CEO receives bad press, the entire company’s reputation is at stake. Not only does this lead to a potential decline in sales from damaged customer loyalty, but it can also affect the opinions of company culture in the minds of prospective employees. This could lead to recruiting, onboarding, and retention challenges within the company. Paying close attention to the online conversation and activities of company management, particularly how they’re playing out in search results, helps eliminate these potential risks.
Enterprise Risk Management and the CEO’s Reputation
Global executives can use ERM to preserve their reputations. ERM is a strategy that looks at risk management across the whole organization but starts with a top-down approach. In this method, executives identify, analyze and prepare for any harm, losses, dangers, or other complications that interfere with the company’s operations and objectives. Successful management could take one of four approaches or a combination of several concerning risks. These include the company’s capacity to:
Regarding the CEO’s reputation, there identifying the acceptable level of acceptable risk is the starting point for developing strategies to avoid, reduce, share, or accept risks. Practically speaking, a bad reputation is hard to manage because of the many uncontrollable risks coming from consumers, media outlets, personal decisions or behaviors, litigation, and more.
Managing Reputational Risk Using Google Alerts
Some CEOs make the mistake of avoiding reputational risks by avoiding online activities. Rather than controlling their narrative, they simply refuse to have one. This practice is just another business risk since it allows someone else to control the information associated with a reputation. Reputation monitoring using Google tools gives you first-hand access to any uses of a particular name. An immediate response can help control the narrative, whether the mention is associated with misinformation, damaging content, or positive remarks.
Gaining Advantage in the Quest for a Favorable Reputation
Company executives can protect their reputation in media coverage or online channels with a few tips. Consider the positive impact of these actions.
1. Create a Visible and Active Persona
While being a CEO comes with a certain amount of notoriety, it’s important to cultivate a highly visible but socially responsible profile. Consumers want leaders to pursue business opportunities addressing socio-economic conditions, act in a manner that promotes equality and inclusivity, and address causes or organizations that make a positive difference for humanity.
2. Purchase Your Domain and Your Name
Any dot com, dot net, dot info, or other related domains must be personally owned by the CEO or high-individual. This also needs to happen with social media accounts, even if there is no plan to utilize the platform. This puts protections in place that guard how the name is used and what it is associated with.
3. Engage in Responsible Behaviors
A CEO or high executive is rarely afforded any privacy, even concerning their personal life. Make a concerted effort to only engage in responsible behaviors, whether this is how your tweet, comment, or post online or how you act. Private matters, such as lawsuits, arrests, or poor judgment, are often splashed across the internet. Develop good communication skills when dealing with online connections or the media, and exercise self-control even when away from the public eye.
If customer feedback or unfavorable search results reveal the company has a negative online reputation, take a hard look at the corporate leaders. It could be that one or more individuals personally have a negative reputation, thereby bringing down the perception of the company as a whole.
People like to do business with companies they trust. Before the Digital Age, word of mouth was the primary source of trustworthy information about a business. Potential customers would ask their friends or family about their experience with the brand before buying a product or service. In the Digital Age, potential customers gain trustworthy information […]