Riku Ruokolahti: How Reputation&Trust Came to Be
In my article on corporate competitiveness, I took a trip down memory lane. I recalled a realization that really sparked my interest in reputation. That realization was the presumed causal relationship between reputation and stakeholder support.
When broken down into its constituent parts, this insight offered an opportunity to consider reputation as a management principle and a genuine factor in competitiveness. What if stakeholder support really is purely a result of reputation? Then competitiveness, too, would be largely a result of reputation, wouldn’t it? Manage reputation—manage competitiveness. Wow! It was also crystal clear that reputation must be measured and modeled in order to manage it at all. I was fully motivated. I had to get to work on this!
I got into reputation modeling almost by accident. My original plan was to work with major companies using the international reputation models available at the time, but there was one little thing I had to take care of first. I had to finish my MBA studies at Henley Business School. Should we hire a consultant from an MBA program who’s almost done with his thesis, or just a smart young guy—or how did that go?
I turned my professional passion into the reason for writing my thesis. It just so happened that Henley is home to one of the world’s most respected reputation research institutes, the John Madejski Centre for Reputation. This is precisely why Henley boasts tremendous expertise in research projects in this field, and indeed, my supervisor, Nicola Swan, represented that very institute.
I tried to take the easy way out. It didn’t work. My advisor insisted that I not rely on my market research background at T-Media, but instead develop a qualitative research plan that was academically interesting, high-quality, and addressed a tangible management problem. Damn it all to hell! Time was running out, and my advisor was pressuring me and demanding such a crystal-clear, red thread in my research plan that I was sinking into despair. It became clear that I wouldn’t be able to produce any content without racking my brain. Time was running out. Soon I’d be kicked out of the whole department. The plan had to be elegant, intelligent, and philosophically coherent.
At the same time, our home construction project was in full swing, and the lease on the apartment we’d rented for the duration of the project expired as the work dragged on. Of course, we were not allowed to extend it. We were facing a forced move somewhere, and we had just had our second baby. There was plenty of work at T-Media as well, as we were launching international reputation management practices in Finland.
But that’s how diamonds are formed—under extreme heat and pressure. After many sleepless nights and utterly overwhelming anxiety, the master plan was born. Now, with the passage of time, it sounds so elegant and simple that I’m completely dumbfounded by its logic. I’m especially dumbfounded that I didn’t come up with it right away. I essentially examined what the leadership of large companies wants from their stakeholders and what in the companies’ own existence or actions could lead to the desired outcome. Trust and reputation, right? Hah!
In practice, this kind of research model means that key stakeholders and the forms of stakeholder support generally sought from them should be identified. This is so that I can begin to systematically explore the factors that lead to this behavior, which supports the stakeholders’ business operations. This, of course, means identifying and isolating the components of reputation! The research plan was fantastic, but the schedule was tight and my life situation was dire. I worked day and night. I had to. Otherwise, I wouldn’t have graduated at all. Despite the extremely tight situation, I stumbled upon new and significant findings in my work.
I stumbled upon an aspect of reputation that previous literature had overlooked. I received an excellent grade on my thesis. I’m sure I could have even earned an A. I just needed more time and stamina. That was all I had to work with.
But that research plan! It was so solid that we continued the work I had started at Henley with Sari Maunula, T-Media’s research director, in a commercial context. We used the exact same research design to the letter. Even the interview forms were the same. We gathered a lot of material, and the understanding we had gained earlier began to solidify and expand. Soon, using the same method, we were even creating custom reputation models for companies. This kind of work wasn’t financially profitable, but in terms of expertise, it was incredibly beneficial.
Based on the knowledge we had gained during this work, Sari and I created the first version Reputation&Trust. We had identified, isolated, and defined the components of reputation that, based on qualitative knowledge, should have a generic link to stakeholder support. A couple of years after I finished my house and my studies, we had a prototype in our hands, accompanied by a very strong hypothesis. Kari Väisänen, then chairman of the T-Media board, suggested that it be named Reputation&Trust.
And you know what’s really exciting? It’s the shift from the qualitative world to the quantitative one. It was time to see if the model would work in the statistical world. Now let’s set the wheels in motion and study a really large group of companies! Would there be a statistical correlation between stakeholder support and the reputation we’ve identified, isolated, and shaped, or would we be left empty-handed?
Following the nationwide data collection effort, Joonas Tarpila, T-Media’s chief analyst, was responsible for the statistical analysis—and remains so as I write this. Oh, the amount of neck-craning behind Joonas’s back as the first analyses were being run! It became clear pretty quickly that it wasn’t a bust—the model worked like a charm. It worked better than we ever dared to hope. It worked better than anything we had ever seen. We had a management tool in our hands that blew all the methods we knew out of the water. Its research design was straightforward, innovative, more effective than previous ones—and it was ours!
Now that the model worked brilliantly in the mathematical world, we were in a really strong position. Even before Reputation&Trust, I was an experienced market research developer and data visualizer. I get along much better with statistical analysis and decision sciences than with qualitative research. Plus, I was familiar with the world of executive teams and their dynamics. And of course, I had Joonas and Sari—Mr. Data and Ms. Market Research—backing me up and keeping me safe.
We developed Reputation&Trust specifically as discussion tools for executive teams. If you look closely at the structure of our report, the first section serves as educational material for executive teams, enriched with research data. The second section, which examines the actual structure of reputation and stakeholder support, serves as a clear facilitator for management team or board discussions. The third section of the report is pure data analysis, which guides decision-making. At the end of the report, as a sort of appendix, we have included all the “standard research pillars” and specific details that might otherwise dilute the focus of the intended discussion.
To date, the model has been successfully implemented in over 40 countries. Looking back, this has been an adventure that would have left even Professor Robert Langdon in awe. It took enthusiasm, tears, gritting our teeth, and many flutters of a butterfly’s wings to get us here. Hopefully, the butterflies will continue to be in the right place at the right time.
Riku Ruokolahti has written a handbook on corporate reputation and reputation management. The excerpt published here, titled “How Reputation&Trust Came to Be,” can be found in the fourth section of the handbook: Life at T-Media and Beyond.
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