Losing Trust

You’d recall the famous words by the founder of the German market leader Bosch; Robert Bosch that goes: “ I would rather lose money then trust”. Many years have passed since he said those words but it is obvious that Bosh cares as much about their reputation today as they did then.

Reputation of Companies and Organizations

In today’s business World everything moves faster than it used to, if consider that the Fantastic FAANG (Facebook, Amazon, Apple Netflix, and Google), some of the largest companies in the world and none of them existed before 2000, it becomes even more difficult to fathom what will happen in the future when things move even faster than they do now. And in these fast rise and falls, reputation plays a large role. Today, the net worth of a company is not only measured in money or other tangible assets. A lot is riding on technology and market perception. For this reason reputation management is more serious than ever.

A company’s reputation is very closely linked to the culture of their place of origin. Subjects that may deteriorate reputation in a Western setting may not be as important in the East. Although they are both similar companies in the tech World, the perception of reputation for Alibaba and eBay is quite different. On the other hand the blurring lines in the global business world ensure that there are some common concepts accepted no matter where you are in the world.

Sometimes the event causing this loss in reputation might have occurred without the knowledge of management, but since this is a sign of bad management, it is similarly degrading to not be aware of such problems.

For example recently Volkswagen has had a major blow to its reputation because of the manipulation in 11 million cars in order to pass emission tests. Just in the US they’ve been fined 20 billion dollars and the CEO resigned, but worst of all their reputation score was lowered from 62.46 to 54.57. While this scandal, which later had echoes in different automotive companies, didn’t have much effect in Turkey, it is still a big loss considering the potential customers with a regard for the environment.

Similarly, the scandals that came to surface one after the other starting with Hollywood’s famous director Harvey Weinstein has turned the industry upside down.

https://www.theguardian.com/film/2017/oct/11/the-allegations-against-harvey-weinstein-what-we-know-so-far

These and similar events remain in the consumer’s consciousness for a long time even if the company has successfully handled the situation, therefore it is of the utmost importance to take precautions.

What Causes a Loss in Reputation?

A loss in reputation can be caused by certain financial scandals, social relations, behavior towards employees, not acting in the best interest of the customer, ignoring harm done to the customer for a long time and other such big mistakes. Recently, past cases of sexual harassment are making headlines It is of course possible that the accusation is not true or is an attempt to harm the company, but in many cases these events have happened in the past and then were ignored or covered up. This kind of cover up is another reason a company could lose its reputation.

Even the NOBEL Prize can Lose Reputation

One of the most respected organizations in the world, the Nobel committee has been involved in scandals this year. Founded 115 years ago by Alfred Nobel, the inventor of dynamite, the Nobel committee choses and rewards the highest achievements in several different fields. Its raison d’être is choosing people who have benefited humanity the most.

This is not just an organization with a good reputation but one that brings a good reputation to the whole country of the person who receives these prizes. For starters there is the issue of giving prizes to people who don’t sit well with the public, such as the Nobel Peace Prize, or the surprise created by giving the prize in literature to Bob Dylan for song lyrics. This year the sex scandals within the committee has caused their objectivity to be questioned. Then, for the first time, it was announced that there will be no prize in literature this year. This decision caused question marks on whether there are problems in raising the prize money of 1 million dollars, and caused a big reputation loss for one of the most highly reputed organizations in the world.

https://www.theguardian.com/books/2018/may/04/nobel-prize-for-literature-2018-cancelled-after-sexual-assault-scandal

What are the precautions you can take now, against your company losing its reputation in the future?

Finding Your Core Values

Everything that constitutes the main line of work for the company should be done perfectly. The values that create this company must be made known and recorded in the DNA of the company. These values, which have been understood and applied by the management, must be relayed from the ground up without anything lost in translation. For this reason these values must be explained during the first orientation training, and most importantly the management must set a good example.

For example, as Turkey’s first payroll outsourcing firm one of the most important value of our company is that we obey the laws and regulations regarding payroll applications to the letter and create out service around this solid base. Similarly, it is out golden rule to have the highest regard for our client’s benefit. These two rules are given the utmost importance in all our operations.

Locate those People Who don’t Fit in With the DNA of the Company

Whether it be a manager or employee, any new recruitment must be followed with a light touch during the first adjustment period, for about six months after receiving a training on the values of the company. My policy here is this; silently watch the employee or manager after they have received their training. Give the person opportunities to prove themselves in a good or a bad way. A great manager I’ve once had while working in finance has given me this advice when I was reluctant to confront a manager who has been falsifying his travel expenses. He asked me to be calm and said this: “You must provide everyone with enough rope to hang themselves”.

When you give people freedom and when they feel comfortable that they can act as they want, they will show their true face. Because no matter how much you discipline someone, if they don’t have these values in them you will only see a facade. Any serious training on how absolute the values of the company are, should only be given after first finding the people with a good character by allowing them some freedom.

Policy of Open Communication

Create an open communication policy within your company and revisit its importance in trainings from the moment a person is hired. However, after a while a new employee can be poisoned by one or more persons who don’t follow these policies.

The stops in communication in an organization, the constant criticism of one person or one group (you can always understand these things from the tension between the groups), one person or one group secretly closing off communication are all signs for danger. Hidden mistakes, which at the time may be easy to correct, can in time turn into a much bigger problem much as a stream of water can cause a muddy pond to form if its flow has been hindered.

In time, such environments will cause events that will hurt your company reputation. Make it your priority as a manager to make sure communication channels always stay open.

This article was published in the Dunya newspaper on 3rd Auguest 2018.

 

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