Is local really lekker in corporate reputation?
American businesses and researchers have been at the forefront of conducting reputation surveys for many years. One such example is the American Reputation Quotient study compiled by market research firm Harris Interactive and released at the end of 2012.
According to the study, the drivers of the most reputable businesses are:
• Outperforming the competition;
• Admiration and respect;
• Trusting the company;
• Playing a valuable social role;
• Whether it is a good company to work for; and
• If there is a good feeling about the company.
The Top Companies Reputation Index (TCRI) conducted by Plus 94 Research in South Africa is based on a similar model to the American study in that it also targets the most visible companies. The Top 30 companies included in the local study are those with the highest advertising spend in the preceding year.
The inclusion criteria for businesses outside the top 30 ad spend category, was being in an industry in which one or more top 30 players are involved or some other tactical industry generally considered to have high visibility. Compared to Americans, South Africans are more generous when rating businesses.
The best performing business in America (Amazon.com) had a reputation score of 82.62, while in South Africa the best performing business (Coca-Cola) had a score of 91.2.
While they expect a lot from businesses, South African consumers are a lot less sceptical. However, they are more likely to walk away from a brand if it disappoints them.
Another international survey, the 2013 Edelman Trust Barometer research, sampled 26 000 people from 26 countries. It measures the state of trust around the world by looking at trust in institutions, industries, leaders, and the impact of recent crises in the banking and financial service sectors. Many analysts equate a good corporate reputation to that of a trust-worthy organisation. As such, the study found that corruption, fraud, and wrong incentives driving business decisions impacted trust levels the most.
It also found that while small business is the most trusted organisations in the west, big businesses ranked higher in emerging economies. Edelman feels that focusing on five performance clusters (engagement, integrity, products and services, purpose, and operations) will see companies improve their trust levels.
The key lesson that decision-makers need to take from the Trust Barometer, Edelman says, is that trust is fragile and the way people perceive the behaviours of an organisation become the anchor on which trust (and reputation) is measured.
The South African perspective
Mark Victor, partner for risk advisory at Deloitte, says South African companies take corporate reputation very seriously and is on par with international trends.
"Depending on the industry, some companies are more proactive when it comes to risk. Stakeholders form a critical component of this. For example, a private company is not all that concerned about finding funding or improving a share price. But as soon as you enter the territory of a multi-national, then corporate reputation has a more significant impact on finances," he says.
Victor says that the growth of social media in South Africa means that companies need to start taking this platform more seriously. "Social media cannot be ignored. Companies need to have a concise strategy that can handle issues fast. With the public playing a more active role when it comes to brand engagement, companies need to understand the potential risks that social media open them up to."
When it comes to comparisons with international markets, few fare as well as South African Breweries (SAB).
"SAB is the birthplace, and a subsidiary, of the SABMiller group, which is the second biggest brewer by volume in the world. We are proud to be part of one of the world's leading brewers with more than 200 beer brands and some 70 000 employees in over 75 countries," says Robyn Chalmers, head of media and communications at SAB.
Clothing, footwear and textiles retailing group Edcon believes that one of the reasons why Edgars is so successful in the corporate reputation stakes is that its "tipping point" strategy aligns it with global best practice. Feedback from customers has been positive and the brands it offers and choice of product are well-aligned with the best available globally in its defined market segment, says the company.
Marcus Sorour, general manager of marketing and communications agency Waggener Edstrom South Africa, believes that doing good in the local market also contributes to a strong reputation.
"Our corporate citizenship is at the core of our reputation. For example, the agency takes its role in local communities seriously and is committed to contributing and creating meaningful value for society in ways that are aligned to the business's strategies. Full-time employees are eligible to take up to 16 hours a year to volunteer for an organisation of their choice," he says.
Sorour believes that pro bono work such as this is another effective way for companies to show their support to organisations that advance causes which the company values. Employees are provided with meaningful opportunities to make a difference in the world while developing skills and gaining life experiences. From its side, operator MTN believes that keeping abreast of global trends is good.
However, South African industries, particularly telecommunications, are dynamic and resonate with the rest of the globe from a technological and innovation point of view.
"Our LTE (long-term evolution) infrastructure and our investment in fibre optic cables such as the West Africa Cable System and the national long distance fibre optic cable are putting South Africans at the forefront of opportunities that exist in the digital era," says Serame Taukobong, chief marketing officer at MTN South Africa.
Maya Makanjee, the chief officer of corporate affairs at Vodacom, agrees on the innovation message and says the country is doing a fantastic job in terms of innovation and growth.
"Prepaid is one of the models that have come out of South Africa and have proven successful throughout the world. "The country is positioned very strongly in telecommunications and innovation globally," she says.
For her, this innovation and strong corporate reputation comes down to good people.
"If you do not have the right mix of employees and skills, then companies and their products and services become a thing and not a culture." And culture is definitely something South Africans can relate to.