- General

The 18 Immutable Laws of Corporate Reputation – A Book Summary

Everything an individual or company does or produces
contributes to its reputation. Reputation is an intangible
asset, but a very important one. In some ways it is even
better than having money in the bank, but not as easily

A good reputation is its own advertising and quality seal.
It can engender loyalty in customers that can cross several
generations and time zones. A good reputation can bring in
more customers in the good times, and be a protective buffer
in the bad times.

The author has delineated what he calls the, “18 Immutable
Laws of Corporate Reputation.” This book holistically
deals with the topic of reputation management in three
parts: establishing a good reputation, keeping that good
reputation and repairing a damaged reputation.

Law One: Maximize Your Most Powerful Asset

Reputation is an intangible asset yet it is arguably the
most valuable asset to manage and maximize. A good
reputation can attract and keep customers, investors,
and employees. Because of this, a good reputation is like
a reservoir of good will (towards the company) to help
it weather bear markets, scandals, or natural crises.
Conversely, a lost or damaged name can scar a company
and provoke boycotts or drive off new capital.

Law Two: Know Thyself – Measure Your Reputation

Before you can manage your reputation you must first
measure it and keep score. Measuring reputation is
easily done through standard public opinion or market
studies; but as each corporation has different
stakeholders (target markets, shareholders, etc.) it is
necessary to customize. Less than half of corporations
have custom research programs. There are no clear
methodologies so it is important to identify the
stakeholders (from local to global) and the relevant
attributes or quantities to be measured: the same
company may rank differently in different surveys/studies.

Law Three: Learn to Play to Many Audiences

No company is an island. Everyone has opinion on
everything. You can never please everybody.
Stakeholders are everybody involved with the
corporation. The group is as diverse as: customers,
employees, investors, market analysts, shareholders,
government, special interest groups, local communities,
retirees, etc. Know who are important and play to them.
It is helpful to think of stakeholders in terms of a
hierarchy or, graphically, as a pyramid with the most
influential at the peak and others following in descending
order. However, it is important to keep in mind that
stakeholder influence is a dynamic relationship and the
same model or model is not necessarily applicable to other

Law Four: Live Your Values and Ethics

Studies of America’s largest companies show that a strong
reputation for moral and ethical conduct performed better
financially in terms of their returns on investment and
equity, and their sales and profit growth. One study
cites that on average the excess value beyond
shareholders’ investments comes up to $10.6 billion more
than companies without a clear code of ethics and
supporting behavior.

Law Five: Be a Model Citizen

At Timberland, social responsibility is an integral part
of the company’s identity and is a significant component
of its reputation. Aside from activities like monitoring
their contractor’s overseas facilities, improving energy
efficiency at facilities, and minimizing chemical wastes;
they encourage volunteering for community service by
considering it as paid leave.

Law Six: Convey a Compelling Corporate Vision

What is this corporation trying to do? That is the
question answered by the Corporate Vision and the guiding
principle of its leaders and personified by the CEO.
The vision and the leaders motivate the stakeholders,
who in turn have enormous impact on reputation.

Law Seven: Create Emotional Appeal

Emotional appeal is difficult to quantify or define; but
it is what engenders passionate customer loyalty and
strengthens reputations. It is mostly shaped by the sum
of people’s long-term interactions with the company’s
employees, products, services, and even advertisements.

Establishing emotional appeal is more than just satisfying
customers. It is also about getting the customer to
identify happiness or contentment with the product. In the
fast paced electronic world it is also helped by a
personal touch or special treatment.

Law Eight: Recognize Your Shortcomings

Examine your reputation and assess if your current business
practices still build that reputation. Only by first
recognizing discrepancies and problems can you take steps
to fix them. The sooner you come clean, the sooner you can
fix them and do “damage control” before it reaches a
crisis situation.

Law Nine: Stay Vigilant

Damages to reputation can happen suddenly and over time.
Managers must be vigilant and act quickly on either
instance because both can be equally damaging and have
long-term effects. Someone should always be watching…
and thinking. In the age of the Internet even local news
can be known globally in minutes. But not all news is
true news. A sudden or instinctive and unconsidered
response (like an inadvertent admission of guilt with
an apology) is just as potentially damaging as doing
nothing in the hope a situation will abate.

Law Ten: Make Your Employees Your Reputation Champions

Employees are the first direct contact between a
corporation and its customers. Naturally, employee
behavior has a large impact on the company’s reputation
both on and off the job, from how they service the
customer to how they talk about the corporation with
friends, relatives, etc.

Law Eleven: Control the Internet Before It Controls You

The World Wide Web is an extraordinary tool and can be a
boon or bane to your reputation. The World Wide Web has
no regulatory body to separate the truth from the lies.
It is estimated over 730 million people are able to
interact with each other – by 2006 it could be over 1

Surprisingly, a survey by Hill & Knowlton and Chief
Executive Magazine found 16% of companies monitor the
Internet closely, 39% check it periodically, and 43%
don’t bother.

Law Twelve: Speak with a Single Voice

Corporations allocate major funding towards building
their brand. As a corporation grows and diversifies its
products, there is a tendency to stray from the
corporate brand. The result of this is weakening of
the corporate brand and weakening of their reputation.
A startling example comes from IBM, which in 1993 had
more than 800 different logos!

Law Thirteen: Beware the Dangers of Reputation Rub-off

There is a saying that goes, “Birds of the same feather
flock together.” When two or more corporations enter
into a partnership or work together; their reputations
may be attributed to each other. Sometimes this is
desirable and is intentional. It is important to keep
in mind the intention doesn’t necessarily translate
to the desired effect.

Law Fourteen: Manage Crises with Finesse

No one and no corporation is immune from crises. Crises
can be in due to corporate transgressions, natural
calamities, malicious intent, a private remark taken
out of context, etc. The most critical period to
reputation damage control happens in the first few days.
It is the tendency of companies to go quiet. This is a
mistake because critics will quickly use the time to
give their worst-case scenario and put out a negative
spin. The corporation should quickly gather all the
facts then make a public statement. The first statements
must be swift and sure. A mistake at this time will
taint all other succeeding statements. Customers and/or
the public need to be assured the right and responsible
action is being taken.

Law Fifteen: Fix It Right the First Time

There are many ways a company can try to fix its
reputation. Some companies may try put on a fresh
image by reinventing themselves with a refocused
vision or business restructuring. Other companies
will try reworking an old formula. Others still will
be working against their successful, dated reputation
that actually holds them back from making a more
contemporary image. But it is not enough to want the
change. The leader is key. The leader has to be dynamic
and focused to guide the company along the new way and
against old habits or instincts.

Law Sixteen: Never Underestimate the Public’s Cynicism

People have become more wary of companies. Claims and
statements are normally met with skepticism. Debacles
like Enron have worsened the loss of confidence Better
communications is key to improving relationships. One
company’s standard “no comment” response affirmed the
public’s belief of their guilt. A better relationship
could mean winning concessions for the company’s
interests with favorable legislature or more community

Law Seventeen: Remember – Being Defensive Is Offensive

People appreciate forthrightness and contrition. Being
defensive is more likely to offend them. The public

needs to hear an apology and needs to know what is being
done to end the crisis. Often the best way to diffuse a
crisis is with a timely and sincere apology.

Law Eighteen: If All Else Fails, Change Your Name

Sometimes the best way to get rid of a bad reputation is
to build a new one with a new name. But name changes
shouldn’t be entered into lightly. The large expense aside,
a name change is confusing and causes loss of brand equity.
You could lose all the good, and you’re not guaranteed to
be free of the bad. At the very least, a new name opens
the possibility of people willing to hear a new message.