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A Paradox in Shaping Corporate Reputation

By Mark Weiner

Wal-Mart ranked at the top in a number of corporate reputation lists, yet the company was dogged by the discovery of undocumented workers in their stores. How does a company such as Wal-Mart succeed in light of such news?

Corporate reputation rankings are derived from an amalgam of company characteristics such as leadership and financial performance. Fortune’s America’s Most Admired Companies ranking features eight key attributes, The Reputation Institute’s RQ tracks six factors and The Delahaye Index tracks five reputation silos with 30 overall subcategories. As such, a particular company such as Wal-Mart may perform relatively poorly on a particular measure, such as “Employer of Choice,” while excelling on another, such as “Quality and Value of Products and Services.” In other words, companies have many opportunities to succeed and fail, but if they can generate more visibility and awareness for the measures on which they perform well than they do on those measures upon which they perform less successfully, they can emerge victorious.

The Walt Disney Corporation

In late 2003, The Walt Disney Corporation was embroiled in a boardroom squabble. However, the incredible success of "Pirates of the Caribbean" and "Finding Nemo" engendered enormous favorability and widespread goodwill. The company might have performed poorly on a factor such as “Quality of Leadership” but the movie properties caused a factor such as “Quality and Value of Products and Services” to soar. The net result: Disney was a winner in 2003. The absence of such blockbuster success in the first quarter of 2004 hurt the company’s ranking a bit, but not materially since the boardroom buzz diminished.

For every Walt Disney Company or Wal-Mart, there is a company that consistently performs at the highest levels: FedEx, Johnson & Johnson, Home Depot and General Electric, for example. These companies manage to perform well in all attributes and in most corporate reputation studies, year after year.

Performance vs. Visibility

Much more interesting are those companies who perform well in reputation studies but who tend to pull their rankings from performance rather than visibility. Using the Delahaye Index and Fortune’s America’s Most Admired Companies rankings as the foundations for this analysis, Massachusetts Mutual manages to excel among the senior executives and analysts who drive Fortune’s rankings, finishing second among life and health insurance companies. However, in the Delahaye Index which is based on the quantity and quality of news coverage, Massachusetts Mutual ranks 98th out of 100, simply because the company lacks the visibility required to elevate its position (the company appeared in opinion-leading media only 32 times in Q2, 2004 compared to the top five companies who generated an average of 5,000 stories during the same time period). Ironically, Massachusetts Mutual accomplished the much more difficult task of generating the highest quality stories of any company in the Delahaye Index. For some reason, the company prefers a more introverted stance rather than publicizing its clearly superior performance.

As far as we know, there is no ranking for America’s Least Admired Companies, but just a few years ago, the list would have been filled with some highly recognized names: Enron and MCI WorldCom come to mind. These companies have suffered greatly for their misdeeds, but other companies from that time have improved their performance. Ford Motor Company, for example, has emerged among the top ten in the Q2, 2004 Delahaye Index, putting its debacles with Firestone behind. Similarly, Tyco and K-Mart are generating improved performance.

The remaining question is “what can you do about it?” The best insurance of a good reputation is performance. In their book “Fame & Fortune,” authors Charles Fombrun and Cees B.N. Van Riel state that reputation is driven by five characteristics: visibility, authenticity, consistency, distinctiveness and transparency. The best companies exhibit these characteristics in everything they do. But first, when the company performs and succeeds in its business, visibility follows. When all the necessary characteristics come together, the result is an excellent reputation.

Mark Weiner is CEO of Delahaye Medialink, the leading global research-based public relations consultancy. Delahaye provides a variety of research and evaluation services that includes media analysis and survey research, as well as research and advisory services to public relations, marketing and communication professionals. Mark is a frequent lecturer on measurement topics for the Conference Board, IABC and PRSA. Most recently, Mark was elected Chair of the Measurement Commission for the Institute for Public Relations (IPR). He can be reached at mweiner@delahaye.com.