WCH In the News
Why reputational equity is important for businesses
Original article courtesy of Triangle Business Journal.
Updated 5:00 AM ET, Fri November 27, 2020
The Harris Poll has released its 21st annual corporate reputation ratings for the 100 most visible companies in the U.S. The 2020 poll, conducted during the first wave of the Covid-19 pandemic and nationwide protests, revealed Americans are turning to companies with purpose and ethics to lead us through our shared anxiety and uncertainty.
Among the 34,026 Americans surveyed, 72 percent trust “companies more than the federal government to find solutions to issues related to the Covid-19 pandemic and racial equality movement.” Seventy-nine percent expect company leaders to respond to a crisis like Covid-19 and racial inequality. Similarly, 76 percent think companies are more reliable than the federal government in keeping America running during the Covid-19 pandemic and related shutdowns. And, 82 percent “would forgive a company for a least trying to help, even if they don’t get it right.”
Companies rated highly for leadership in addressing our current crises are striving to develop reputational equity. Moving beyond the traditional factors that shape a company’s reputation, they reportedly are committed to dismantling systemic racism and embracing the core principles of diversity, equity, and inclusion (DEI) in the workplace and society generally. Such companies, the Harris Poll suggests, should witness a growing commitment to their brands across all five generations, but especially Gen Y and Gen Z.
Further, committed companies strive to diversify their talent base by avoiding the “just like me” hiring syndrome, a process known as affinity bias; eliminating discrimination in resume screening that disadvantages applicants with Afrocentric first names; and creating talent pipelines through apprenticeship, scholarship, and internship programs with institutions serving underrepresented populations. They also search for talent, including intermediaries that match individuals seeking a second chance with employment.
To support worker retention (especially those with diverse backgrounds), companies with reputational equity aspirations commit to a living wage and the elimination of the gender wage gap. Conjointly, these organizations ensure workplace culture and climate are inclusive by establishing a zero tolerance policy for discrimination; devising tactics to combat stereotypes and micro-aggressions; creating spaces that foster a sense of belonging for under-represented groups; and building an ethos of openness and candor for courageous conversations and listening.
Companies with reputational equity aspirations recognize the importance of a strong and highly visible presence in the communities where they are located and do business, including charitable giving, volunteering, and employee gift matching that supports social causes. More than that, they leverage their discretionary marketing budgets to champion causes promoting equity more broadly.
Finally, reputation equity driven companies go to great lengths to maintain their commitment to DEI in good times and bad times – when things are going smoothly and when things are not going smoothly. Moreover, they commit to accountability and transparency by developing a DEI scorecard of key performance indicators and metrics and disclosing the results to shareholders, key community stakeholders, and the public at large on an annual basis.
Transparency is a critically important component of reputational equity because of our digital world. For example, Glassdoor with over 30 million users, allows employees to rate companies – anonymously – on DEI, compensation and benefits, career opportunities, culture and values, effectiveness of senior management, and work/life balance.
Strong reputational equity is a strategic business imperative in a world where disruptive demographics are dramatically transforming social, economic and political institutions, including the workforce, workplaces, and consumer markets.
James H. Johnson, Jr. is a professor of strategy and entrepreneurship at UNC Kenan-Flagler Business School. Jeanne Milliken Bonds is a professor of the practice at UNC Kenan-Flagler Business School.
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