Originally published 8 July 2008. This article is retained from the tCI archive. Law, policy or practice may have changed since publication.
What various stakeholders think of you matters increasingly in this image-conscious world. Indeed, you can now take degree courses in reputation management, and the term itself is becoming popular as a general description of what your PR department is all about.
But what part does consultation play in building, securing and defending an organisation’s reputation? How relevant is it? Is additional effort in this area likely to produce a return on such investment? And what is the penalty for getting it wrong?
Private companies have long recognised that their overall image influences stock market perceptions, and therefore the share price. That, in turn affects a Chief Executive’s salary. That is why many top firms spend a small fortune tracking the opinions of key stakeholder groups such as shareholders, employees, distributors or financial journalists. It matters in the day-to-day market-place too; consumers’ loyalties can evaporate quickly if a firm’s reputation suffers; Remember Ratners! Or ask Northern Rock! In the public sector we rarely have scope to vote with our feet; turning up at the polling booth every few years is the traditional way to express our view. Yet the reputation of public agencies matters like never before, for we’ve discovered how corrosive it can be when communities lose faith in public services. Being poorly perceived also adds to costs – difficulties in recruiting and retaining good staff, handling excessive complaints; re-directing people to other service providers and so on.
Among the levers that can be pulled to improve an organisation’s reputation, consultation, at first glance seems an unlikely one. Only a minority are conscious of consultations, and even fewer take part. Yet being excellent can have a disproportionately positive impact. Those who enter into dialogue are more likely to be opinion-leaders and the decisions taken after an effective consultation may also – all other things being equal – be better ones. An organisation with a track record of taking its stakeholders seriously will anticipate problems better, and be better at harnessing their goodwill in finding solutions.
Looking deeper, what are the precise ways in which reputation can be enhanced through effective consultation?
• Being open-minded. Public bodies are still perceived as being closed to argument, following on policy tramlines set from somewhere on-high. Those who can demonstrate a genuine appetite for listening stand out • Transparency. Even those who listen do not necessarily expose their processes to sufficient scrutiny. The best are open about who says what ... and happy to publish the output of consultation exercises before determining the outcome • Responsiveness is an underrated attribute and reflects whether an organisation cares about those with whom it is in dialogue. Nothing bolsters trust more than consistency in addressing their concerns and feedback ....feedback ....feedback.
You don’t build a reputation for consultation overnight. It needs top-level commitment alongside working-level proficiency. It also needs a fine judgement as to when to launch a full-scale public consultation – and when to use more informal methods. The best involvement programmes aren’t necessarily the biggest, but they are the ones that are well-considered, thought-through and professionally executed.
Above all, those who are serious will appoint a senior executive to manage stakeholder relationships, recognising that this is the pivotal investment. Consultation is just one mechanism – to be used under the right circumstances – as part of a wider relationship with those whose lives – and interests are affected. Understanding who they are, what they need and how best to respond to them is the key to a better reputation.
Trigger points
- Objectively, what do your stakeholders think about your organisation? Is there a consistent measurement?
- Does your organisation see its consultation practices as contributing to its reputation?
This is the 114th Tuesday Topic; a full list of subjects covered is available for Institute members and is a valuable resource covering so many aspects of consultation and engagement