The 18 Immutable Laws of Corporate Reputation

Citation

Dupree, J. (2005), "The 18 Immutable Laws of Corporate Reputation", Journal of Consumer Marketing, Vol. 22 No. 7, pp. 442-443. https://doi.org/10.1108/07363760510631192

When the Journal of Consumer Marketing, sent me The 18 Immutable Laws of Corporate Reputation I thought, “Great: another book of lists for success” And, I tossed it on my desk for a couple of months. I was the poorer for those months because this substantive, well‐documented book basically shows how proper management leads to strong public image and reputation. Not a book for your public relations and advertising people, it is a book for your entire management team.

Alsop's basic argument is that corporate reputation is ultimately a function of corporate practice. While there are occasions when a public relations crisis must be managed, the bottom line is, every functional area of the business and every management decision either builds or diminishes your reputation.

You can skim the book's cases and go straight for the key points of each chapter – they are nicely marked with bold headers and have a relatively quick read. On the other, reading the contemporary substantive cases reveals how each principle played out or was violated in the real world. As each chapter develops a law, there are boxes with important research information that supports the key point. Divided into roughly three equal parts, Part 1: “Establishing a good reputation”, Part 2: “Keeping it”, and Part 3: “Repairing it”; The 18 Immutable Laws of Corporate Reputation can help you if you are in good shape, if you want ideas on maintaining your reputation, or if you are in the middle of a crisis.

Law 1: “Maximizing your most important asset” opens with FedEx's nightmare of losing a truck to fire being prominently featured on televised news. Alsop lays out how FedEx's established reputation, thorough preparation, and planning for dealing with such a disaster via an aggressive but substantive and thoughtful response, minimized any damage. A firm needs to actively develop its reputation, build an organizational culture that weighs decisions in terms of impact on reputation, and uses its reputation capital wisely.

Laws 2, 4, and 6 are the heart of this first section as Alsop calls on firms to know themselves and operate on that basis. His suggestion that firms make decisions in the light of reputational impact is not suggesting duplicity but rather looking at your firm positively. Does this decision represent who we really are? Is it consistent with our own values and ethical standards? The author suggests that a firm's leadership, its CEO, needs to cast a compelling vision that builds on its values, as both BP or Dell have. Then its managers and employees will make decisions that do right by the customer and confirm the company's reputation. In fact the personality of the firm's public figures, the CEO, president, are often closely linked to the vision and the firm's reputation.

Laws 3 and 5 demonstrate the importance of a company knowing its constituencies and regularly giving back to its community. But it is not calculation and weighing costs and opportunities; it is about creating emotional attachment and commitment. It can be as simple as Sue Harness at Wawa baking cookies for departing employees or as expensive and time consuming as the effort to redesign the airplane seats and flight crew uniforms by Continental, moves that significantly improved customers' feelings about the airline. Companies need to consider the feelings of their internal and external constituencies and ask themselves what business decisions will enhance their customers' and employees' satisfaction, thereby building “reputational capital” that can be stored and used in times of need.

Unfortunately, carefully establishing a good reputation by doing the right things and making good decisions is not enough. Hence why Part 2 and Laws 8 through 13 address the need to protect that reputation. As Home Depot learned, a firm needs to track its reputation and be aware of its shortcomings (Law 8). Home Depot lost its focus in its drive to profitability and moved away from its vision. It took a survey to bring HD back to its senses, and it took specific, concrete actions to address customer service. Consequently, over time its reputation rebounded. This is Alsop's point. Reputation is a function of doing business correctly; it is not an add‐on through manipulation or heavy promotional budgets. Understanding this, HD held back on emphasizing service quality in its advertising until it felt they could legitimately claim it.

Laws 9 and 11 are the ones that will keep you awake at night. Law 9, “Stay vigilant to ever‐present perils”, opens with the mistake of a misguided employee in a moment of high stress deciding to sell water (rather than give it as other businesses in the area did with food, etc.) to the firefighters and rescue personnel at the Twin Towers site on 9/11. Then Starbucks sought to defend itself by “setting the facts straight”, even though it was in conflict with their own published customer service policies. They underestimated the power of word‐of‐mouth and the internet in spreading the story, not to mention the print media. Law 11 – “Control the internet before it controls you”, brings home the power of the internet for good and ill for any business. The case of how Tommy Hilfiger countered a negative urban myth by aggressively countering, seeking its origins, etc., is consistent with Alsop's continuing proactive message. Reputation is something you actively build and defend. Alsop then goes into how companies can positively use the web to enhance reputation by providing customers with product information, company information, even posting “myths and legends” and offering counters to them.

In Laws 10, 12 and 13 we learn the importance of consistency in a public message and having employees who communicate that consistent message in all they say and do. The author closes Part 2 by reminding us of the importance of deciding and acting in ways consistent with whom the company is, even to the point of being careful of partnerships, strategic alliances, etc. Do these cooperative efforts not only make business sense but are they consistent with whom we are as a company?

The four of the last five laws under Part 3 – “Repairing a damaged reputation”, carry a consistent message – fixing a reputation problem requires skill, honesty, and humility, and it needs to be done right the first time. The closing Law 18 – “If all else fails change your name”, may seem like an attempt at humor but it is practical advice with a caveat. Even that may not be enough. While this is the most “defensive” portion of the book, Alsop wants us to understand that anyone, even DuPont, can recover from a crisis. Responding with the customer in mind, being willing to humbly accept even what is not the firm's fault, and acting at the right time, usually sooner than later, go a long way to restoring company image. The public's cynicism – Law 16 and their desire for contrition – Law 17, make it critically important that a company deal with the issue right the first time – Law 15, and with care – Law 14. It is clear that no course of action, no event is isolated. It is the coordination of doing the right things, of basically good humane management, and appropriate timing that result in success in dealing with crisis. The author's final advice in Law 18 seems mixed. He offers as many examples of name changes not working as working. I believe he included it to argue the opposite. It is not change your name; it is do everything you can to not reach this point because you only have a 50‐50 chance that this last‐ditch strategy will work.

Entertainingly written, exemplified with many current and some classic case studies, and adequately supported with research, The 18 Immutable Laws of Corporate Reputation is a practical management tool for understanding both the importance of corporate reputation and how ethical, humane management practices support and enhance it.

If you react to the title and “judge the book by its cover”, you will miss an excellent, integrated management book that your entire management team will benefit from. And, it may help you head off a future reputation crisis. Because while we can control our firms to some extent, we cannot control the future.