Riku Ruokolahti: The Maturity of Reputation Management
“We have a very clear understanding of our reputation, even without measuring it.”
REPUTATION DOES NOT ARISE in a vacuum; rather, it is formed in this world. It is built from small fragments—fragments that each represent a perspective related to the company. These perspectives are shaped by experiences and any preconceived notions that have developed over time regarding the organization.
This interaction between what people experience and what they already know determines the size and hue of each individual fragment. And when all these fragments are put together, they form a mosaic—or, viewed from a distance, an image that represents the company’s reputation.
Did that sound a bit poetic? Perhaps, but it’s important to understand just how broad a concept this is before we start trying to fit it into any particular management style or model. Reputation is forged in a job interview, in the structure of a Runeberg cake, in a line for a bucket, in a moment of insight, in a software update, the largest shareholder’s views on taxes, at the gas pump, in the conquest of the world, during a space rocket launch, in the CEO’s speeding tickets, in a sudden nut allergy attack, in that moment when you feel truly special, and in everything in between.
I wrote all this simply to emphasize that reputation management is a team effort. It is impossible to imagine that any single leader could successfully manage a company’s reputation on their own. A company’s rising or falling reputation is the result of many different factors.
LET’S IMAGINE A HYPOTHETICAL situation in which your team, called the Management Team, were to start managing your company’s reputation from scratch, with the full authorization of the board of directors. As a starting point, you’re given the board’s consensus: “This is really important, you know.”
There’s nothing for it but to get to work. You start by discussing among the management team what your reputation actually is, among whom, and what significance it holds. You’ll find many who definitely like you, and it probably doesn’t matter that some don’t. Soon the discussion will broaden, and you’ll notice that the team is having a lively debate about what reputation actually is. You’ll realize that right now it’s actually important to know what the board meant by “reputation.”
“Reputation is a truly elusive concept onto which everyone can project their own hopes and fears,” says Riku Ruokolahti.
Ei aikaakaan, kun joku alkaa lukea Wikipediasta, mitä kaikkea maine voi tarkoittaa ja miten se usein tulkitaan virheellisesti brändin tai imagon synonyymiksi. Nyt palaa aikaa ja rahaa. Olette täysin jumissa. Maine on aidosti hähmäinen käsite, johon kukin voi ladata omat toiveensa ja pelkonsa. Kukin voi shoppailla kirjallisuudesta omia käsityksiään tukevia argumentteja ja olla omasta mielestään oikeassa tavoittamatta silti ketään. Maineen kannaltahan on tärkeää, että <täytä tähän oma argumenttisi>.
I’m sure you’ve all been part of some rather obscure discussions, but this example was taken to the extreme. The example also tried to accomplish too much at once: reputation was a foreign concept in this context, and the attempt was made to introduce it—as a mere concept—directly into management practices that cut across organizational structures.
The Reputation Management Maturity Model
In leadership, as in just about anything else, it is much easier to move forward in small steps than in giant leaps. To make these steps easier, I will now present a maturity model for reputation management. In creating this model, I have considered and reflected on two areas that I have had the opportunity to observe or help develop over the past ten years: general, well-known maturity models for managing various aspects of business, and reputation management and the development of its maturity levels.
This model does not, in and of itself, involve research. It is purely a practical framework—a kind of update to the best practices we have seen so far. You may notice that the maturity model presented here focuses solely on the structure of leadership, rather than on the actual content of reputation management. Management maturity does not guarantee success in management, but it does ensure a systematic approach that creates better opportunities for success. At the same time, it ensures the traceability
and continuity of management, even if personnel change along the way. Operational management does not always have the bandwidth to think about this, but let this observation be directed at the board members reading this.
I would like to point out that many companies have survived over the decades and built an excellent reputation for themselves, even though they have spent most of their journey at the first level of reputation management. I would also like to point out that it is precisely these companies that have often been the most eager to build their reputation management maturity, even though no ready-made maturity model has ever existed. I would argue that this has been part of the recipe for success. Reputation matters at the highest possible level, which usually means the owners. As tools are developed, they are adopted immediately.
When I say "reputation," you say "fear." Did I get that right?
On the other hand, anything can happen at the first level. Reputation management depends on individual performance, and the organization as a whole isn’t even able to steer the conversation in any particular direction. If owners are only interested in the bottom line of the next quarter, we live in a world of compromises, and long-term reputation management carries little weight. The value generated by reputation goes unrecognized, and therefore risks are at their highest.
As I write this, I am watching with anguish as the very justification for the existence of the private care sector in Finland crumbles. I am distressed because there are many different types of companies in the sector: both proud operators with a long-term interest in their reputation and organizations that, in recent history, have focused on competitive bidding and cost competitiveness, with well-known consequences.
Measured reputation is a management tool
When I say “reputation,” you say “fear.” Did I get that right? If so, your company is likely at the first level of reputation management. You react to things, but you’re not in the driver’s seat. However, it’s easy to move forward from here. It all starts with modeling the company’s actual reputation using statistical methods. In other words, we measure it. The modeling process also helps us understand what reputation is and what it entails, and we can even measure its extent.
Reputation measurement—and, in particular, business impact analysis—offers an excellent opportunity to discuss reputation within the organization using business language. Yes, now things are moving forward! When the conversation permeates the organization vertically and horizontally, leadership maturity generally improves as well. People are brought on board face-to-face. As I emphasized earlier: reputation management is a team sport.
The more widely individuals within an organization engage with an issue and become convinced of its importance, the more likely it is that leadership maturity will also advance. There are no shortcuts to fostering engagement.
“It all starts with modeling a company’s actual reputation using statistical methods. In other words, we measure it. The modeling process also helps us understand what reputation is and what it entails, and we can even measure its extent,” explains Riku Ruokolahti.
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Many of you will surely recognize yourselves as part of a story like this. You have been key players! The best part of this work is watching the continuous growth in a company’s management maturity and seeing the wonderful successes that result from it. To avoid misunderstandings, a few disclaimers must be added to the model presented. The management maturity model is not intended to be interpreted in black and white. I don’t believe that any company would be exactly at level four as described.
The model aims to describe the typical practices of companies at different levels of management maturity rather than provide a strict set of rules dictating exactly how things should be done. The model addresses measurement, but does not specify which stakeholders should be measured or how often. This, too, depends on the context: it depends on your business and what you’re aiming to achieve. A generic management maturity model can’t go into this level of detail. But don’t worry! We’ll come back to this later.
Riku Ruokolahti has written a handbook on corporate reputation and reputation management. The excerpt published here is taken from the second section of the handbook: Systematic Reputation Management.
