Nearshore Americas
reputation managment

Reputation Management: In Today’s Digital Landscape, Few Firms Get It Right

Reputation is everything.

In the business world, how a company is perceived can have a dramatic impact on its performance. The erosion of consumer trust, a dampening of investor desire to provide financial support and an increase of employee turnover – with the associated costs incurred – are just a few examples of the negative impact of poor reputation management.

As an industry, outsourcing suffers from a poor reputation. Major US companies who have thousands of outsourced employees across Latin America regularly do their best to cover up the fact, generally because they think consumers won’t like it.

And they’re often right. Recent research by Miami University shows that US perceptions towards outsourcing are certainly uncertain; white Americans tended to view outsourcing negatively while Hispanic Americans had a more positive view, it said. Taking jobs away from native workers was one criticism of the industry.

In light of this, it’s fair to say that reputation management is key in global business today. The always online, digital nature of our world has clearly increased the burden on organizations to be aware of their regard. 

David Niccolini, co-founder and shareholder of TorchStone Global

“The business landscape is littered with companies that have reputation problems,” David Niccolini, co-founder and shareholder of risk mitigation firm TorchStone Global. 

With that in mind, Nearshore Americas set out to find how to manage reputations properly. We spoke to three corporate reputation specialists, who each gave their views on the key elements of reputation management in the digital age. 

Take a Holistic Approach and Assign a ‘Reputation Champion’

The rise of ‘corporate transparency’, has placed an onus on any employee to be a kind of representative, regardless of position.

“The idea of corporate reputation is still a little opaque and people must understand that reputation is a holistic process,” said Nicky McHugh, Senior Vice President at the RepTrak Company, a global reputation insights firm. 

Nicky McHugh, Senior Vice President at the RepTrak Company

“The responsibility for it does not only rest with the Chief Risk Officer or the Head of Communications, but with everybody.

That said, large companies may opt for a strategic approach to reputation management. If they do, one individual should oversee cross-department efforts. 

“But if a company is going to systematize its reputation management, it should have a reputation champion who defines the strategic direction, measures progress and rallies people around the cause,” McHugh added.

Enable Digital Savviness and Constant Training

“We live in a culture where the reward for getting there first is greater than the reward for getting it right,” said Niccolini. “And the rush to be the first can often lead to errors of judgement.”

“Employees need to understand the consequences of poorly considered social media posting. Often, protocols and restrictions regarding social media use are set out in employee contracts, but they can be a double-edged sword,” he said.

David Robillard, President of MultiLatin Background Screening and a senior advisor on reputational risk issues, believes that social media training must be formalised across Nearshore companies, regardless of the sector they work in.

David Robillard, President of MultiLatin Background Testing

“Nearshore companies work with major global companies, so social media training must include a focus on how its use can impact the end client. There must also be constant reminders and updates to this; letting employees know that everything on social media is public,” said Robillard.

This allows for an organization to take a proactive stance, noted Niccolini: “Reputational risk must be taken seriously before a problem arises so that it is proactive and not reactive in nature. Manage now rather than contain later.”

Be Aware of Today’s Business Reality

The nature of outsourcing and the knowledge services export industries underscores the need to be aware of actors at each link of a supply chain, said McHugh. 

“We exist today in a multi-stakeholder environment. Companies are evolving from a shareholder focus to a stakeholder focus, in which they no longer only focus on their investment communities but the needs of their employees, their suppliers, the communities they work in,” she explained.

“Focusing only on the end user is not a sustainable strategy. Indeed, not being stakeholder aware in foreign markets can mean cultural signals being mixed, workplace safety issues being confused, and a general generation of mistrust,” she added.

Have a Diverse Team in Place

With many Nearshore companies present in multiple markets, an understanding of the subtleties of cultural differences is essential. Companies that take a one-size-fits-all approach to communications across regions as vast and varied as Latin America & Caribbean are bound to make an error. Putting a team that represents varying areas of interest in place can help bolster a company’s understanding on the international stage, argues Niccolini.

“Companies are evolving from a shareholder focus to a stakeholder focus, in which they no longer only focus on their investment communities but the needs of their employees, their suppliers, the communities they work in” — Nicky McHugh

“When company operations stretch across international borders, it’s even more important to have a cross-functional, diverse team in place,” he said. “This means diversity in terms of age, gender and cultural background. Groupthink is the worst way to approach a reputation risk issue, and diverse teams that offer contrasting perspectives on ways to resolve a crisis are those best positioned to resolve divergent issues.”

Deeper Due Diligence

“Reputation management can center on whether the reputation of a candidate for employment, a business partner or a vendor meets reality,” said Robillard.

Digital infrastructure provides many tools to research people and organizations, but it also offers the platform for individuals with malicious intent to project a reputation that has not been earned, nor meets reality. If a company accidentally begins an undesirable partnership, the consequences on reputation can be immediate. 

“Due diligence is vital to carry out on prospective partners of any type. There are quick hits like searching social media for mentions of individuals. When working with foreign clients, searching across the US Treasury’s Office of Foreign Assets Control (OFAC) watch list and other similar databases should be carried out,” Robillard explained.

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Know When to Comment

The digital sphere offers plenty of opportunity to comment on an organization. Comments, both negative and positive, regularly appear on social media or work-related websites like Glassdoor. But organizations should not counter or make their own comments on each of them.

“Companies are generally reactive when it comes to reputation management on social media,” said McHugh. 

“When hot button issues occur on social media, there is an expectation that a company should comment, but our data shows those comments are only necessary if an issue migrates from the world of social media to mainstream media. This is when reputation risk occurs. It’s at that point – and generally not before – that companies are best to make a comment.” 

Peter Appleby

Peter is former Managing Editor of Nearshore Americas. Hailing from Liverpool, UK, he is now based in Mexico City. He has several years’ experience covering the business and energy markets in Mexico and the greater Latin American region. If you’d like to share any tips or story ideas, please reach out to him here.

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