How would you rate your reputation today? Most people find this a tough question to answer. Reputation is hard to quantify – we know it’s important, but trying to nail it down can feel like chasing a rainbow…
The challenge for family businesses can be even more complicated. It can be difficult to understand from the outside where the family ends and the business begins – meaning the reputation of the family is tricky to separate from the reputation of the business. This complexity requires careful management and can be a more emotive issue for those at the centre of it.
The good news is you can have more control over your reputation than you think. We’ve worked in the business of reputation for over 36 years and have learned a valuable secret to creating a successful and sustainable reputation. The key is simply to take a more proactive approach to it day-to-day. After all, you can’t manage what you don’t know. The more knowledge you have, the more control you have.
To put this in context, the majority of our work at Schillings arises when there is an issue or crisis unfolding – and many of them could have been prevented or prepared for with some careful forward planning. Over the past year, there are some clear patterns in the issues we’re seeing arising – some of them related to the pandemic and the fall-out from it. Trends include relationship problems becoming public; hostile campaigns from competitors or disgruntled customers or employees; online impersonation; smear campaigns; threats from the media or competitors and problems with financing (known as flawed flags).
Anticipating problems before they emerge can really pay off. A recent client – the head of a successful family business – knew they were planning to merge with another company, so looked at any potential reputational issues before the merger was to take place. We worked with them to carry out a comprehensive audit so they could understand the potential concerns with a range of stakeholders involved in the deal. By carrying out this audit and the associated recommendations, we helped maximise the value of the deal.
When we talk about reputation capital, we are referring to a ‘score’, much like a credit score. There are several global databases that sweep up information about businessmen and women – and bankers, trustees and lawyers often use this information as the basis for their decision making. For the most part, this is personal data, and typically most people are unaware of how much or how detailed this data is. What few people know is it’s possible to proactively interrogate these databases to understand what your ‘score’ is likely to be. While that might sound simple, every company and family will have a different scale in relation to their specific concerns. You need to define what you want your reputation to look like, before you can assess whether you are on track.
For example, one area that families and businesses are particularly interested in is online privacy. In the digital environment, there is a direct link between privacy and security which is a significant driver when it comes to taking proactive preventative measures. Clients often ask us to carry out an audit of their public and private profiles, helping them to understand where they may be unknowingly giving information away. For this to be meaningful, an organisation or individual needs to have a clear idea of how public or private they want to be – so that they can check that their profile measures up to this desired state of privacy.
In a family business, this can become complicated. There may be differing views as to the kind of information sharing that takes place and where – what you might feel comfortable with could look very different to your son or daughter’s view. But it’s vital to discuss this. While we can’t control whether a malicious third party seeks to gain access to private information, we absolutely can control our privacy settings and how much we choose to disclose.
There are all sorts of people interested in private family businesses. So how can a family shield themselves from people with a malicious agenda? Clear boundaries about what to share and where to do this are paramount. This is even more important in cultures where ostentatious sharing is the norm. Almost everything will show up online somehow, so there needs to be agreement about whether this is an acceptable level of risk to take.
For example, one client (pre COVID-19) took over an entire ski resort for a birthday party but decided to tell guests not to upload any photographs onto social media, including the A-list performers who were attending. It took a team on location at the resort and at home to monitor social media to ensure this rule was maintained. While this may seem extreme, if you are serious about protecting your privacy, it’s worth doing.
It’s easy to think that attacks won’t happen to you – and hopefully they will not. But the reality is if you are successful attacks can – and likely will – happen at some point. By taking a consistent and considered approach to ongoing reputation management, you are far more likely to keep your reputation score at a level that supports your business objectives.