I recently came across an interesting conversation at the Reputation Institute about the role of leadership in reputation management (and development). The starting point for this is that RI estimates that roughly 2/3 of a company’s reputation is determined by company factors rather than product factors (And on a side note: RI also has found that the impact of leadership and other company factors on overall reputation has been increasing in recent years, while product factors have become less important). One element of this is obviously the company’s leadership – and I guess we can all name a few CEOs or entrepreneurs who through their behavior, vision or creativity have greatly impacted their company’s reputation (think about Steve Jobs, just to name one example). RI’s research related to its RepTrak Pulse has shown what role strong leaders play in forming a company’s reputation. 4 key factors are:
- They put a face to the entity.
- They make sure to target specific stakeholders with relevant information from reliable source.
- They show how vision supports corporate practices (and I would also say vice versa).
- They mitigate a crisis.
So what does then make a leader strong and how does this add to a company’s reputation? the RI team discusses four aspects to look out for:
- Is the leader appealing?
- Is the leader surrounded by excellent managers?
- Is the company well organized?
- Does the leader or leadership team have a clear vision for what the company offers and its future?
The research indicates that the impact of leadership on a company’s reputation has been increasing, and that leadership actually has a positive impact on the role of all other company factors that influence reputation:
Download the accompanying research which also discusses 2 great examples (Microsoft as an example of good leadership and Wells Fargo as an example of poor leadership) here: