Posted tagged ‘preston’

Reputation – why it matters and how you can manage it

30/03/2012

“…Reputation, reputation, reputation! Oh, I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial…”

William Shakespeare Othello. ACT II Scene 3.

There are three dimensions to business success: performance, growth and reputation.  The first two dimensions are tangible, measurable and therefore manageable.  They are the bastions of traditional accounting defined by the elements that make up book value and can be measured by the strength of the balance sheet.  The third dimension, reputation, is different.  It is almost wholly intangible, difficult to measure and therefore very difficult to manage.

And yet, reputation’s value and consequent potential liability is great, almost infinite in some respects.  Whilst book value and traditional accounting is one way of valuing a business, it misses the true value that makes up a business’s intellectual capital – the goodwill that creates the absolute value that is often only realised during a sale but may be severely damaged or enhanced at almost anytime.

In 1980 almost 100 per cent of the value of a company consisted of tangible assets such as chairs, factories and inventory.  That figure is now more like 30 or 40 per cent – the rest comes from intangible value.

Intellectual capital is now recognised as the most critical dimension of success.  High growth and performance are vitally important but equally so is the protection and promotion of reputation.  The problem is that the lack of tangibility makes it a difficult proposition for people to understand.

In my consultancy we work with complex organisations to help them realise their intellectual capital value through the promotion and protection of their reputation.  One of the surest indicators to us is how responsible a business in terms of its environmental, social and (corporate) governance (ESG).

A great indicator of high ESG performance is often seen through the way a business treats waste either as a cost or rather as a resource to be managed.  Lee Petts from Remsol talks about every pound saved in waste being a pound added to the bottom line.  I would go further in saying that it is also value in terms of intellectual capital.

So, waste management should be a high business priority not just in terms of its ‘green’ aspects but in the real difference it makes to overall value. Integrating waste management and environmental performance into overall business strategy and then ensuring efforts are made to leverage that in terms of communication is the way to promote reputation and increase value.

My favourite quote in terms of judging reputation is ‘actions speak louder than words’ and maybe in realising why reputation matters in terms of waste management its worth adding another old saying: ‘where there’s muck there’s brass!’

Nick Taylor is the owner of Bodyproject and the creator of the Advanced Stakeholder Management methodology that helps organisations promote and protect reputation call 0151 709 2288 or e-mail nicktaylor@bodyproject.co.uk

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