Referred to as the “Oracle of Omaha,” Warren Buffet, one of the richest and most respected businessmen in the world, once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
A good reputation is a valuable business asset. I like the way Ronald Smith, at Buffalo State College puts it, “Reputation is part of the social capital of an organization, arguably its most important public relations asset.”
Today, people do more business with companies that act ethically and do more good. Research (UK RepTrak™ 2012) shows that 69% of people’s willingness to say something positive about an organisation is influenced by their perception of the company, and just 31% by what they think of the company’s products and services.
As Ron Guirguis, Edelman PR Managing Director of Corporate and Public Affairs says, “People don’t just buy products anymore, they buy the companies that make products, the values they represent and what they stand for.”
Companies and organizations can foster better reputations by defining and acting on a core set of values. But most critically, they must put these values into action. A case in point, Loblaw’s acted to compensate victims of the Rana Plaza collapse in 2013 and to review working conditions surrounding the manufacturing of the grocer’s Joe Fresh clothing line in Bangladesh.
On the flipside, Starbucks says they are committed to acting ethically in business. Yet in 2013, on the issue of global tax avoidance, the BBC reported that “Starbucks had sales of £400m in the UK last year, but paid no corporation tax”. This shameful behaviour launched a serious consumer backlash in the UK that may yet turn Canadians to a different latte provider.