Building Corporate Reputation in a Tumultuous Economy
March 10, 2023
We are almost through the first quarter of 2023. It is increasingly clear that the economic uncertainty many predicted during 2022 now has us in its grip. You only need to look at the steady stream of tech sector layoffs, including a recent Meta announcement of more job cuts to come, as evidence that organizations large and small see uncertainty in their economic horoscopes.
Businesses across the globe are bracing for whatever impact a down or even simply slowing economy will bring. At the same time, we are hearing from clients across multiple industries that these market conditions reinforce the importance of corporate social responsibility (CSR) as a business driver. There is a real economic benefit to keeping business reputation sturdy and strong. A renewed focus on “the business of the business” means CSR initiatives must be essential in building corporate brand equity—and the bottom line. Financial and reputational resilience will be critical in the financial quarters still ahead.
There is also growing understanding that the traditional ways of communicating corporate social responsibility initiatives are not as effective as they once were—those who aren’t on the cutting edge of communications strategy risk being left behind.
So where should purpose-driven, thoughtful organizations direct their resources and time to foster a positive reputation in the eyes of customers, investors and partners?
1. Connecting with Communities, Showcasing Commitments: It’s never been more apparent—community first. Companies have traditionally focused on supporting markets where they have a vested business interest. Now, they are doubling and tripling down on local commitments. This is extremely important because corporations have the resources to impact underserved populations significantly and because it is easier to measure impact and tell the story.
As governments—federal and state—seem mired in cross-aisle shouting, companies have stepped to the fore supporting local and trusted community leaders and advocates who have evolved into messengers for societal change.
2. Real Problems Addressed in Real Time: From a strategic standpoint, companies align with issues that authentically link back to business well-being and invest in those areas. The companies on the cutting edge of reputation building and management remain nimble, responding to current events and high-impact issues in real time. Companies are focusing on what they can do now to make a difference. And they are finding ways to lean into the news cycle to communicate about these investments without taking away from the existing issue-driven responsible business strategies.
As we all know, it’s also essential that these communications come from a genuine place whereby companies step up to show they are doing good for the right reasons rather than promoting contributions for the sake of good publicity. Investments in social impact spur more investment.
3. Scrutiny on the Supply Chain: Recent reports suggest that most consumers are more likely to be loyal to, or switch to, a brand that offers complete supply chain transparency. Companies setting the standard for supply chain transparency will win the battle for trust and brand equity. Additionally, recent regulatory developments may magnify the need for a clear view of the entire supply chain ecosystem, making an organizational commitment in this area a win-win.
4. Catalyzing Change Through Coalitions: We’ve said it before—coalitions are a pathway to multiply impact and make a difference. While companies continue to support numerous nonprofit partners, many seek leadership opportunities where their active involvement is tied directly to solving an obvious problem. Companies that bring together like-minded partners to catalyze change are the ones that stick in stakeholders’ memories.
It’s a new paradigm of reputation management in the marketplace. Scrutiny is higher than it has ever been. Customers and other stakeholders expect more of the companies and brands they patronize and seek to build relationships. Having a clearly expressed social impact message and a carefully crafted strategy centered on a genuine desire to do good and make a difference is critical.
Conscientious organizations need to look at the competitive landscape and evaluate where the opportunities lie. What are competitors doing, and how can organizations deviate from traditional communications methods and get creative to differentiate? Leaders think through their spokespersons and strategies to maximize their social impact commitments and create maximum reputational benefit.
These are critical questions to ask, and if you pay attention and look to set the pace, you will chart out a clear direction and authentic engagement.