The annual Top Companies Reputation Index (TCRI) has been released, rating the most reputable businesses in South Africa. The research, which is partially funded by the Mail & Guardian and conducted by Plus 94 Research, assesses the reputations that companies have established with South African consumers.
The M&G supports this initiative because the growth and development of a country relies on businesses that can channel investments towards creating sustainable communities, and such investment relies heavily on reputations.
Becoming an admired company with a good corporate reputation takes years to achieve. For a company to succeed, it is crucial that it is respected by its customers, staff, suppliers, shareholders and community.
The research, which looked at 22 industries, had three categories of rating: industries with a score greater than 85, those with scores of 80 to 85, and those with scores below 80.
Banking was the highest regarded industry sector in South Africa for 2013. It seems that, although the country's banks have received their fair share of criticism, the industry demonstrated its robustness during the 2008 global financial crisis and retains a good reputation overall.
The value of transparency H
onesty and openess are important to a good reputation. It's not only about communicating good news or corporate social responsibility investment. Equally important is communicating when things are not going well, when the company makes a mistake or when it is putting together a plan to rectify problems.
Corporate reputation is built on being open and offering a consistent experience that helps stakeholders fall in love with a brand.
"Actions speak louder than words and marketing communications is one of the many tools a company must focus on to build trust," says Marcus Sorour, general manager of marketing and communications agency Waggener Edstrom South Africa. "The way in which we consume information is constantly evolving and becoming more democratised. Listening and measurement tools enter the market place constantly and enable communicators and marketers to evaluate and assess corporate reputation."
Sorour says that many organisations lack structural communication that could help them to react fast enough.
"There are many case studies that have shown a corporate reputation being shredded under the noses of the executives, but the communication structure and decision-making of the organisation could not respond fast enough to the growing negative perception. Marketers should think less about brand identity and more about brand personality."
Increasingly, brand personality is becoming more important. Brands that do not speak directly to their clients and stakeholders are in danger of losing market share. Consequently, it is logical that brand personality becomes an essential part of delivering on the brand promise.
Media to the extreme
Analysis and reputation management are more than only understanding the products and market of an organisation.
Jaco Pienaar, chief knowledge officer of media analysis and research company PEAR, says it is also about understanding where media type and footprint fit in.
"Reputation can not only be measured by a few figures. It needs a balance between public opinion, editorial, and marketing. If an automotive company, for example, promotes product quality through advertising, excellent governance and service delivery through editorial, and then completely or even partially ignores what consumers are saying on social media, then there is a clear brand disconnect, which will filter through to reputation on a wider scale," he says.
While there is a general understanding of the importance of corporate reputation and an acknowledgement that anything can happen to impact it, companies often react to something happening rather than addressing it proactively.
Mark Victor, partner for risk advisory at Deloitte, says corporate reputation is about the tone of the organisation's leadership and the culture of doing the right thing when nobody knows about it.
"It is about the code of conduct of an organisation. Culture is set from the top and driven down to the rest of the employees. Reputation impact is not always about bad things happening, but about being unethical and how to respond to it," he says.
The most reputable businesses are rated on a list of nine qualities:
• Products and services
• Financial performance
• Workplace environment
• Corporate social responsibility
• Vision and leadership
• Broad-based black economic empowerment
The total score of these qualities consist of disaggregated individual statements comprising of a reputation measure scored out of 100. The scoring from the previous two years is showing an upward trend, indicative of how the public is endorsing the performance of corporate South Africa.
While these qualities measured reputation, it is interesting to note that being successful at the company's core business, and thereby achieving financial success or recognition, were inextricably linked to the reputation health index achieved.
Communication is the key
Coca-Cola South Africa and Standard Bank, the two highest rated businesses, had financial performance and corporate social responsibility as the values that contributed to their achievements.
The primary difference was that Coca-Cola's main driver was its products, while Standard Bank's perceived financial performance was the bedrock of its reputation.
What was more pronounced for Standard Bank and less so for Coca-Cola was its ability to communicate effectively with its stakeholders.
For Vodacom and MTN, recognition and communication were crucial. These businesses were successful in part because they were recognised as successful and respected for their achievements. Communicating efficiently with all their stakeholders was an important pillar for their survival.
The two businesses differed in their performance in that MTN was noted more for its products and services, while Vodacom had its workplace environment as a considerably important pillar of its success.
Retailer Pick n Pay's reputation was anchored by its products and services, workplace environment and financial performance, but it was also recognised for its track record.
Fundementally, South Africans expect companies that excel at what they do to achieve even greater success in the areas of communication, being socially responsible and communicating well.