Having boasted about being rude and amusing on LinkedIn, I’ve driven dozens of new sign ups only to produce a newsletter that is neither. Mea culpa. I will try harder. But welcome to the newbies. It’s only 11 minutes out of your life… 

Another day, another valuation for reputation.

This week’s number comes courtesy of Echo Research.

It estimates that reputation now represents 28pc of the total market cap of the FTSE 350, adding up to £841bn in shareholder value – or roughly the size of Switzerland’s economy.

This indicates, according to Echo, that trust is now one of the most powerful forces shaping market value, accounting for more than one quarter of listed enterprise value in the UK.

Echo has form in this area, having produced the Reputation Dividend, since 2008. Over that period, the value of reputation has hovered between 20pc and 38pc, peaking during crises, such as the aftermath of Brexit, when shareholders seek out investments with credible leadership that they deem to be robust.

In recent years, it has stabilised at around the current level, which Echo suggests indicates that reputation is not episodic but is instead embedded in valuations. And that markets consistently reward leadership credibility, operational discipline, strategic clarity and long-term value orientation. Indeed, 43pc of reputational value is driven by such qualities.

Echo’s research suggests that reputation has a particularly large impact on Rolls Royce, contributing 49pc to its market capitalisation; BAE Systems, 48.2pc; Informa, 46.4pc; Shell, 45.7pc; and Marks & Spencer, at 44.8pc.

This is M&S’s debut appearance on the list. Over the past ten years, the retailer’s reputation had not contributed significantly to its market cap to warrant its inclusion, which suggests that its turnaround strategy under CEO Stuart Machin is now working, and feeding into the balance sheet in intangible ways. Witness the loyal customers who bought clothing items they did not want during last year’s cyber-attack to demonstrate their support for the brand.

The missing link for corporate affairs directors is how to put these numbers into perspective. I despair of those who tell me that they ‘own’ reputation… until the moment that Jonny on the shop floor films himself doing something unthinkable with a pizza. Or the finance director plays Sudoku with the numbers.

Reputation is multi-layered and driven by many factors: Echo identifies nine levers, including people management and capacity to innovate. But research such as this demonstrates to the board that reputation is a valuable asset that should be managed like any other.

While acknowledging the contribution of others, corporate affairs can demonstrate how they understand the forces that currently shape and drive reputation, and, with their ability to ‘see around corners’, identify new ones on the horizon.

It is in their role as ‘defenders of reputation’ – of protecting and enhancing this valuable asset through clear communications and strategy – that they can prove their value, rather than claiming ownership.

Why plain speaking matters

Shane Littrell is my new hero. A postdoctoral fellow at Cornell University, he has ploughed through years of corporate bulls**t and concluded that those people who nod knowledgeably when a colleague spouts grandiose, verbose garbage really haven’t a clue what is going on.

For the avoidance of doubt: corporate bulls**t is not to be confused with jargon. People who talk about ‘customer-differentiated value propositions’ as they set off to ‘boil the ocean’ before their ‘hard stops’ may have spent too long with management consultants, but they can be cured by rolling eyes, derisory snorts or a lunch with a cynical journalist. (Mates’ rates are available!)

Littrell believes corporate bulls**t is rather more sinister. It can be both ‘functionally misleading’, whereby it misleads much of its audience irrespective of whether this was intended, or ‘epistemically irresponsible’, where it sounds smart and may prove persuasive without actually being accurate, meaningful or informative.

You may not be surprised to discover that Littrell believes businesses to be fertile breeding grounds for corporate bulls**t, as colleagues try to impress bosses or feel obliged to opine while knowing nothing about the subject. And he is certainly no fan of ‘hazy mission statements’ or ‘jargon heavy annual reports’.

But for corporate bulls**t to thrive, it requires a receptive audience – and, I kid you not, there is a term for this: ‘bulls**t receptivity’ refers to an individual’s tendency to evaluate bullshit in an inflated and positive way.

To test how gullible people are – and no, this is not an early April Fool – Littrell created the Corporate Bulls**t Receptivity Scale. A bulls**t generator produced ten statements modelled on actual quotes from Fortune 500 business executives, including this corker: ‘Our bandwidth comes from the visionary culture-shifting of several new growth-based, integrated networks that capitalise on our heritage to engage our future when building bridges to success.’ [Copilot translation: 🤣🤣🤣🤣]

After mixing the generated statements with actual quotes, Littler asked a selection of highly educated workers with backgrounds in HR, accounting and finance, to rate each statement’s business savvy. The results are an eye opener.

For a start, it was often hard for employees to distinguish between the two, so used are they to corporate gobbledegook. And even those who recognise what they are hearing as bulls**t, still share it – possibly because they have become too cynical about the workplace.

The research found that those particularly receptive to corporate bulls**t usually have high job satisfaction, an affinity for mission statements and view their supervisor as trustworthy and inspirational. Nothing wrong with that, I hear you say. Well it seems they’re also not very good at decision making or analytical thinking and may even misinterpret instructions.

And they will mask their insecurities by adopting their own version of corporate bulls**t. What’s the phrase: garbage in, garbage out? However, the ‘high quality workers’ – the ones a company really wants – are more likely to leave because they get fed up with the constant drivel. In other words, a company that revels in corporate bulls**tery keeps its own low-hanging fruit.

Apropos of nothing: Am thrilled to see that Twenty Twenty Six will shortly air. Having enjoyed her unique wisdom during Twenty Twenty Twelve, I do hope branding expert Siobhan Sharpe makes an appearance. She’ll nail this puppy to the floor.

PUBLIC RELATIONS

PR 101

PR Newswire has put together a handy guide, The essential components of a press release, which outlines the core components of a press release.

• Headline

• Dateline

• Lead paragraph

• Body content

• Multi media

• Quotes

• Boilerplate

• Media contact information

• Call to action

None of this sounds like rocket science, but I imagine it’s handy for those new to the game. I would, however, stress two of these points. Too many releases do not carry a date. (Professional services, I’m looking at you.) For a journalist researching a story, the company’s own website is first port of call. If releases are not dated, or indeed are arranged out of date order, the information relied upon by the journalist may not be the most current. (Cue irate call from PR officer!)

And secondly, media contact information. Too often the person cited on the release is actually out of the office on the day it is sent. And, for the record, an email address does not constitute ‘media contact information’. For those on tight deadlines, every minute counts.

Personally, I ignore releases that front load with information about the company rather than the story itself. Or those so full of acronyms, they could be an episode of Countdown. And if I don’t recognise just one word in the first paragraph, I tune out. Before pressing my favourite button: delete.

Postscript: Ooh, I love it when this happens. On Saturday, I received a ‘Sent with high importance’ email from a panicked press office informing me that the release I had received the previous day had been sent in error. The only problem: I hadn’t been sent the release. Consider me intrigued.

CORPORATE PURPOSE

Going back to their roots

Refounding. I was introduced to this word last week. Coined by Jon Iwata, an IBM alumni turned Yale fellow, it describes how some CEOs now spend time understanding the origins of their companies – what initially made them flourish and distinctive – in order to turnaround or transform them. In other words, they seek out their original purpose: the reason these companies exist.

Interviewing more than 200 CEOs, Iwata explored how leaders think about shareholder value alongside relationships with employees, customers and communities – particularly while driving through change.

He discovered many CEOs had delved into the archives or talked to their predecessors to better understand how their organisations had lost their way. These companies were ‘drifting’, either because of cost-cutting, poor decisions or mergers and acquisitions that made the original business unrecognisable. As Iwata puts it: the cumulative effect of decisions, that once seemed rational, is the problem.

For example, when Jakob Stausholm was appointed CEO of mining company Rio Tinto, to repair its reputation after the company destroyed a 46,000-year-old Aboriginal site to expand an iron ore mine, his first thought was: We weren’t always a company that did something like this. What happened? It led him to rally the company around a new purpose and cultural values.

Similarly, Starbucks had a founding vision – to be a third place outside of work or home for people to meet, leading to comfortable seating and ambient lighting at the cost of table turnover. However, rapid expansion, the rise in mobile ordering and automated espresso machines, changing the barista client dynamic, coupled with rising competition has impacted Starbucks in recent years.

As its new CEO, Brian Niccol, put it: the company had drifted from its core. His mission is to make Starbucks a coffee house again. He’s bringing back ceramic mugs and mis-spelt first names.

Most of the CEOs interviewed recognised that their core responsibility is to grow shareholder value, but many also believe that shareholders only benefit in the long-term if companies take an holistic approach to other stakeholders.  

When they dig into their company’s history, they are seeking to understand its unique qualities – not to relive former glories. Their focus is on two areas:

• An enduring need: A fundamental human, business, or societal need the organisation was created to address—one that persists across technological and market change.

•  A distinctive capability: A unique approach to creating value that is difficult for competitors to replicate and independent of specific products, services, and technologies.

By understanding these foundations, the CEOs are able to focus on the why (purpose), the how (culture) and the what (strategy), says Iwata, before adding: ‘They will remain aspirational without systematic implementation. Leaders must embed character into operational systems that shape daily organisational life.’ He believes that refocusing will only grow in importance as AI continues to reshape and disrupt industry.

And on the matter of corporate purpose, a gentle reminder about our one-day event on 21 January.

Other dates for your diaries
CorpComms Awards open for entry: 30 March(ish)
CorpComms Awards close for entry: 5 June
Corporate Affairs Summit Dublin: 28 May
Cyber Unpacked: 2 June
Corporate Affairs Summit London: 7 October

To register your interest in each or any of the above events, email [email protected]. We will be in touch shortly with further details.

Please note: both Corporate Affairs Summits are only open to senior in-house communications professionals. Tickets will go on sale shortly.