We are now immersed in a new economic cycle that is already known by different names, including "Long-term Capitalism," "Applied Economics" or, as I like to refer it, "the economy of intangibles and reputation."
But what is it exactly? The economy of intangibles is a new context where the roles of the company and brand have changed, and power is now in the hands of stakeholders. Those organizations that understand the opportunities and risks of this new context will know how to align their corporate strategies with stakeholders' interests and motivations and create a system of shared beliefs to build up trust and generate advocacy at scale, as the Arthur W. Page Society explained first in The Authentic Enterprise and further on in Building Belief.
Both identity and the definition of your purpose as a company are the starting point for the entire process: creating a strong identity that is relevant to the stakeholders. The organization must authentically embody their character in every interaction in order to be deserving of trust (as Corporate Character research shows). This is how reputation, which is the perception and attitude that lie at the mind of your stakeholders, translates into value: through increased sales of products and services, talented employees, capital growth and the ability to obtain and maintain licenses to operate.
The success of organizations with a good reputation is based on the fact that their employees, customers, and suppliers actively recommend their products, services and the organization itself to their networks.
Communication plays a crucial role in this process, because, as an old formula for success in corporate communications says, it is important to "do good things and talk about it." Companies should leverage the entire potential of communication for unleashing the power of controlling attitudes and behaviors towards an organization.
These are some of the ideas included in Corporate Reputation, a book that analyzes the concept of reputation since its origin and explains the metrics and models used to manage this key intangible asset. This text is a comprehensive overview of all research and scientific contributions made in reputation studies so far, analyzed from three perspectives: financial, psychological and sociological, mirroring its three authors' respective areas of interest: Enrique Carreras (sociologist), Ana Carreras (economist) and myself (psychologist). The foreword in the English version has been written by reputation guru Charles Fombrun.
Thus, although intangible assets and resources drive today's economy, executives and investors demonstrate poor awareness about the potential of intangibles. Corporate reputation is the best example of an intangible asset that has a strategic value but is not adequately understood, measured and managed and that is why this book is such a valuable reference, as it outlines key pathways for unleashing the value generation potential that is embodied by good reputation management.
The concept of corporate reputation has evolved from its origins to finally acquiring scientific weight via the development of measurement tools and models that lay the foundation for the long-sought-for technology to manage it.
Those who wish to manage reputation should be prepared to address the following questions:
I strongly believe that senior communications leaders who share this approach will be able to take the great opportunity of leading the challenges that companies currently face and demonstrating their contribution to enterprise value generation. Companies —and ultimately the society as a whole— need new ways of doing business by focusing on the path to excellence through the management of intangible assets.
Welcome to the intangible economy!