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10 April 2009 | Paul Gostick Blog
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What Price Reputation?
This week Paul looks at why a reputation can be a company's biggest asset..

  Paul Gostick

The Chartered Institute of Public Relations says public relations is about reputation - the result of what you do, what you say and what others say about you.

Effective and sustained PR can help manage reputation by communicating and building good relationships with all the organisation's stakeholders, fostering mutual understanding and support, maintaining goodwill and influencing opinion and behaviour. Your reputation is the thing that makes you stand out from the crowd and gives you a competitive edge. Mutual understanding is critical. It is a two-way process. To be effective, an organisation needs to listen to the opinions of those with whom it deals and not solely provide information. It is no longer about telling, it is about dialogue and collaboration.

Every organisation, irrespective of size, ultimately depends on its reputation for survival and business success, whether commercial, not for profit or public sector. Reputations are earned and in a competitive market, reputation can be a company’s biggest asset. Most organisations have complex interactions with multiple parties. Customers, suppliers, partners, employees, investors, analysts, journalists and regulators can have a significant impact on reputation because they all form opinions about the organisations based on their observations of how they conduct themselves and the interactions they have with them.

The best way to establish trust in business is to keep your word and make customers feel important and valued. If your business does make a mistake do not try to make excuses and never try to place the blame back on the customer. Word of mouth becomes absolutely critical – it’s viral and can enhance or destroy a reputation.

Perception is reality and it does not matter what the ‘rules’ say, it’s what people think - whether good or bad, right or wrong - that really matters. Ultimately, these perceptions will drive their decisions about whether they want to work for, work with, transact with and/or support an organisation. The real question is do we trust them and their values.

Of course where a monopoly exists there does seem to be a little lack of concern for reputation. Just look at the mess our politicians have created with their expenses and the police with their attacks on innocent people. The court of public opinion is not looking too favourably on them right now.

Last year a survey conducted by the Public Relations Consultants Association (PRCA) highlighted a sharp decline in public trust and public perception of MPs, broadsheet journalists, tabloid journalists, magazine journalists and public relations professionals over the last ten years. In particular MPs have seen their reputations particularly tarnished with 92% of respondents saying public perception has declined.

It is not difficult to understand why the reputation of MPs is in freefall as they seem to be intent on destroying public trust. The economy is in tatters, we are in recession, banks refuse to lend money despite enormous assistance from the Government and people are losing their jobs, their businesses and their homes. At the same time, over the past few weeks all we seem to have heard about is yet another mind boggling expense claim from Smith, McNulty, Darling, Balls, Blears, Hoon, Becket, Robinson et al. (And these are just the one’s that have come to light!). In each and every case the response is that they have done nothing wrong, they just acted within the rules. The problem of course is that rules are open to interpretation.

There is a book called, "The Green Book" which MPs are meant to follow to the letter regarding "expenses & allowances". One small paragraph says: "Claims should be above reproach and must reflect actual usage..." The worrying thing is that they do not seem to be able to grasp the fact that they may have done something morally wrong, particularly in the current climate. There have been examples of personal greed, but when examined there does seem to be a systemic failure. House of Commons officials, ultimately reporting to a committee of MPs, have encouraged MPs to treat the second home allowance as part of their salary. Thus the prevailing attitude seems to be I can so I will, it is my right. Sadly, they don’t realise quite how low they have sunk in the public’s opinion.

It has now been suggested that MPs may reluctantly agree to give up some of their lavish perks, but only in return for a considerable pay rise. Such demands are likely to be deeply unpopular, as MPs already enjoy gold-plated pensions and perks which are well beyond the reach of ordinary families. This is a PR nightmare in the making.

In a democracy the MP is elected to serve the people. Perhaps those in public office should accept that they are there to serve and to that end MPs will be paid a reasonable salary and be allowed to claim reasonable actual and necessary expenses to do the job they were elected to do – represent the people. Of course, for those in the private sector whose work takes them away from home on a regular basis the answer to MPs expenses is obvious. Scrap the second home allowance. Accommodation, either rented property or hotel rooms should be booked by an approved travel or booking agency and all expenditure must be receipted.

Those in grace-and-favour homes could lose their job at anytime so it would not be reasonable to expect them to sell their own home whilst in office. Renting it out would be a reasonable thing to do as costs are ongoing and the grace-and-favour homes are taxed as a benefit in kind.

Fairness and transparency is what is needed. Maybe then, trust could be rebuilt. 

Any feedback and comments are always welcome!! 

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