Telkom’s poor image
Corporate reputation, something which Telkom is currently trying to re-establish under their new CEO, is one of those company assets that you can’t see but it most definitely affects your bottom line.
Research has shown that as much as 47% of American companies’ net worth is tied up in intangible assets like brand equity and reputation.
This makes establishing a solid, positive corporate reputation invaluable and not just because it is a nice thing to do but because it has a significant impact on revenue.
A company, like Telkom, who is suffering from a poor public and corporate image, can expect to wait around 4 years to rebuild a blemished reputation. Furthermore, the relationship between the reputation of the company and perceptions regarding the CEO is significant.
A study by Burston, Marstellar and Roper in 2003 found that 50% of the respondents linked the reputation of the CEO to that of the company.
The statistics indicate that if Telkom is to improve in the public sphere it is vital that they start working on improving their corporate reputation now and in doing so need to boost the impression customers have in their CEO.
This means building trust which is easier said than done. It is not always easy for the CEO to come clean and take the fall for poor business decisions that may not have even been his to make.
But honesty and a willingness to engage to two-way communication with the public at large are crucial ingredients to the very difficult process of rebuilding a tarnished reputation.
The good news for the incumbent is that research also indicates that 87% of staff would prefer to take a lower salary and work for a company with a good reputation than to go for the money but compromise by working for a company with a less than acceptable image.
Customers (86%) are also prepared to pay more for the services of a company with a good reputation indicating that service delivery is not just a nice little side-line business but should be part of the core business of any company.
Shareholders are more comfortable if the company has a good reputation and 58% of shareholders are of the opinion that a company that does not communicate openly and honestly is the number factor for causing uncertainness on the stock market.
All this is fine and dandy but how does a company like Telkom go about improving the corporate image of a company that is flailing about hopelessly?
Some suggestions provided by Michael Schneider, director of public relations for The Cherenson Group, are:
• Encourage and promote ethical behaviour
• De-emphasize short term objectives
• Have the CEO and senior management make their corporate values explicit to all employees
• Senior managements must take responsibility for the company’s performance in serving all key stakeholders.
Rebuilding a tarnished reputation is not an easy or quick task but research shows that eventually it will start to effect revenue especially in the new more competitive environment Telkom is about to face.
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