Reputation is critical to a company every day. It’s also true there are certain hinge moments when a positive profile of a company, its leaders or brand is especially and directly linked to outcome.
Issues and crises are obvious. It is during these situations, when reputation is visibly tested. Actions taken and words spoken in in real time as well as in the past are dissected for authenticity and credibility. Timing, trust, tone, intention, empathy, among other elements of reputation, can mean the difference between recovery from a crisis or not. Look no further than Bud Light.
The hinge moment I want to explore in today’s column is the role of reputation in assessing companies of any size for investment, as an asset, a partner, or for exit. I consider this part of a company ’organisational readiness,’ a phrase I heard about 10 years ago when supporting scenario planning for marketing and global sales teams of a diagnostics leader.
Readiness is an area in which I have deep interest and experience. Assessment of readiness –from the inside out as well as outside in – should be holistic and include far more than financial metrics (e.g. revenue, market size and potential, cash flow) and the potential of a specific asset. Evaluating non-financial factors like management’s vision for growth as well as reputation from all angles reveal a company’s true strengths and potential. Data from McKinsey’s research (2024), for example, indicates that companies with healthy cultures are three times more likely to achieve total shareholder return above their industry median.
The highly respected investor and philanthropist Warren Buffett once said, “We’re looking for three things when we hire people or invest in companies: intelligence, energy, and integrity. And if they don’t have the last one, don’t bother with the first two.”
Recently, it seems private equity and venture capital firms are taking a greater interest in communications and reputation. Grant Somerville, Global Headhunter at Melbury Wood responsible for Strategic Communications and Finance in UK US, EMEA, APAC told me he noticed this, too.
“I am having a lot of conversations in the market at the moment and what is clear is that more and more PE and VC firms are bringing senior strategic communications professionals into their portfolio companies and not just for crisis moments or press releases, but instead for value creation, reputation management, and storytelling at scale.”
He continued, ‘Whether it’s a Series B health tech start-up or a mature clean energy company backed by private equity, investors are realising that strong comms functions that build, nurture and support brands, leaders and company reputations are not just a “nice-to-have” but are fundamental to growth.”
How a company is perceived is not just for the smaller company looking for investment. Virtually all size companies want to be attractive to investors, shareholders, employees, peers, talent and innovators seeking a home for their exciting, disruptive idea or discovery.
In my career, I’ve been lucky to work with life sciences and consumer health companies large and early-stage that considered reputation a key valuation driver and see the results. For example, an initiative to boost a large biotech’s R&D reputation was tightly focused on the research community to attract talent and partners. Within two years, this goal was met with the additional benefit of creating a palpable and measurable internal pride in the R&D function and stronger collaboration among scientific leadership across geographies. In another example, ongoing communications that puts the spotlight on the integrity, passion and acumen of a mid-sized company and its management is integral to its reputation as the development partner of choice.
According to Grant, comms and reputation are increasingly integrated as signals of readiness for investment, growth and likelihood of success.
“For innovative companies building the future, the ability to communicate who they are and what they stand for clearly, strategically, and proactively is becoming a differentiator. They are increasingly measuring success based on consistency across product, brand, investor relations, and employee engagement, confidence among internal teams, leadership, and external stakeholders, and capital. Yes, the right narrative does help raise money and exit with multiples.”
For those seeking readiness to achieve business goals, we in comms are certainly ready.
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