This post originally appeared on Communication Director
Abraham Lincoln once famously said:
“Character is like a tree and reputation like its shadow. The shadow is what we think of it; the tree is the real thing.”
While Lincoln surely referred to people rather than organizations, it would make good sense to extend this allegory to the business world. And with the recent proliferation of the concept of corporate reputation, it seems fair to ask ourselves this: Are we dealing too much with the shadow and not enough with the tree?
In other words, and using more common business terminology, the question is about perceptions vs. reality: how much can be achieved by “managing” perceptions rather than reality, or better yet – how can we once and for all eliminate the gap between the two?
Mind the gap
Let’s start with some definitions: “Reality” can be described as the way a company actually behaves: the way its employees perform their work and how they’re treated by the company; the company’s products, prices, customer service and culture; its relationships with suppliers, partners, and other stakeholders; and so on. Typically, the larger the company is, the more complex and multi-layered its reality is.
“Perceptions”, on the other hand, are what people think and feel about the company. They are not just based on personal experiences – but also on what people hear, see, or read about the company, whether from the company’s own communications or from third parties like the media and experts.
Reality can often be well-hidden (ask anyone who thought they knew Volkswagen before September 2015), opening wide reality-perception gaps. And these gaps can prove costly: when they’re in the company’s favor, meaning that perceptions are better than reality, they represent a substantial risk – when symptoms of reality come out (and they always do in the current world of transparency and scrutiny) the company’s reputation and business will suffer tremendously due to people’s disappointment, as in the case of VW. If the gaps go against the company, and reality is in fact better than perceptions, then the company is not winning the levels of recognition and advocacy that it should.
From “looking” to “being”
So, what can business leaders do? And how can functions that are today responsible for the company’s reputation – like Corporate Affairs or Marketing & Communications – adapt? It’s true that these functions are already changing dramatically these days, going from reactive to proactive communication and stakeholder engagement and adding new skills and competencies in the areas of strategy, organization, digital media, and data analysis. These changes are important and substantial and will undoubtedly make the work of these functions more strategic and professional. But they’re still more about the shadow than the tree.
To really make a difference, business leaders need to start dealing with the tree – the company’s character. Increasingly, those responsible for their company’s reputation need to start seeing themselves as initiators and facilitators of company-wide efforts to shape the reality of the company in line with its stated ambitions and the stakeholder perceptions it wishes to have. These efforts must involve all areas of the business:
- HR: to help shape culture and behavior that support the company’s character
- Marketing and Sales: to ensure the way products and services are defined, promoted, and delivered is consistent with the company’s character
- Strategy, Finance, Technology, and Legal: to allow the company’s character to guide decisions on growth, budget allocation, systems, and procedures
- Operations, R&D, and Supply Chain: to include the company’s actions across geographies, business units, and supplier relationships in the effort to behave “in character”
- Communications, Public Affairs, and CSR: to connect the company’s messages, sustainability activities, and stakeholder relations to its character
- Senior Management: to help bring it all together and provide endorsement, oversight, and commitment
The role of the CEO
This responsibility ultimately lies with the CEO, and it’s he or she who should encourage and facilitate collaboration within the corporate environment across functions and business units. Without achieving real alignment between departments and respective executives, the task of “reputation managers” to eliminate the company’s reality-perception gap is nearly doomed. Yes, they can do a lot to try and impact perceptions through communication, but at the end of the day, the shape of the tree will always cast its true shadow. Formal processes and management tools are required – such as collaboration forums and KPI systems – but it’s active CEO endorsement and corporate executives’ “soft power” that will enable them to work with others in the organization and forge strong and effective alliances.
Corporate character is not just an attempt to replace “brand” or “reputation” with a new term. As Lincoln observed, it’s what actually matters. Communicators cannot build and shape the company’s character on their own – they need the help of other teams, executives, and departments in their companies. Managers need to get better at building these relationships – and business leaders need to get better at helping them. They can start by realizing that if you want a beautiful shadow, you need to grow a spectacular tree.