In a recent piece in the C-suite Blueprint, I wrote about the fixation many businesses have with trying to measure everything (“Not Everything Can Be Measured,” May 1, 2018).
To summarize, while there is nothing inherently wrong with gauging various indicators, not everything can be neatly packaged in a numeric box. How can you place a numeric value on your company’s reputation? Moreover, how can you accurately measure that reputation unless you have executives capable of making judgments based on their smarts and experience?
There are other problems, too. Canny operators are able to make numbers sing and dance any way they choose. Pick one thing to measure while not assessing another and—poof—you’ve gamed the outcome. Perhaps the biggest cop out is that metrics are the easy way out. Almost anyone can gin up a few numbers, pop them in a spreadsheet, and call it a day.
In short, metrics are a poor and unreliable substitute for sound C-suite judgment.
What Is the Fourth Factor?
British management consultant John Elkington suggests that companies consider three bottom lines as part of his Triple Bottom Line theory: Financial, environmental, and social performance. All are unquestionably important facets of any business.
Yet his construct seems incomplete. I recommend making “Reputation” part of a new system, the “Fourfold Bottom Line” (with proper credit to Elkington for building upon his original concept).
I realize others have posited various Quadruple Bottom Lines centering on purpose, culture, the spiritual, or worker welfare. That’s well and good. For my money, however, reputation needs to be a keystone of any operation.
One supplement to these recommendations, and one more step in implementing a Fourfold Bottom Line: It is worth reiterating that dealing effectively with reputational risk involves not only preparing for potential crises, but also assessing performance once your reputational crisis subsides. That after action review is a mandatory component.
When your reputation gets dinged, you need to know how to respond. That’s why smart businesses implement step-by-step procedures and resources to help counter a variety of risk scenarios.
Firefighters, hospital workers, pilots, and police officers all train rigorously for potential calamities. So must your C-suite. Workers from the corner office to the tiniest cubicle need to be vested in your company’s reputation. Your top brass, communications staff, lawyers, and issue experts have a responsibility—financial, ethical, and reputational—to communicate effectively when catastrophe strikes. The situation may be foreseen or unforeseen, natural or human-made, relatively mild or thoroughly earth-shattering.
Avoid the Bumpy Roads
One thing to bear in mind: Your voyage to a sparkling reputation can be akin to a cruise in a new Jaguar down a newly paved expressway. Or you can go the Thelma and Louise route.
One important factor to make clear to your C-suite: You don’t necessarily assess risk to expunge it; that is difficult to impossible. Rather, you examine it in order to be aware of its impact, breadth, intensity, and probability. This conversation with your leadership can be a difficult one. They sometimes labor under the impression that the communications staff can snap its fingers and make the day sunny and bright. You and I know that’s not the real world. Nonetheless, it’s your job to help them arrive at this realization.
Impress upon them the benefits your company receives thanks to a positive reputation. The waters will get choppy at some point. if you’ve diligently banked reputational capital, people are more likely to give your new product or service a chance, believe your ads, do business with you, apply for a job in your firm, join your public policy campaigns, purchase your stock, and support you.
That’s why—along with financial, environmental, and social performance factors—reputation needs to be a part of the Fourfold Bottom Line.
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