Warren Buffett famously said, “It takes 20 years to build a reputation and five minutes to ruin it?” Who am I to disagree with Mr. Buffett? According to the Reputation Institute, intangible value-including corporate reputation-makes up 81 percent of market value. This means a one-point increase in reputation yields a 2.6 percent increase in market cap, which translates into an average of $1 billion.
However, corporate and financial communicators know that if a company is going to market now, it doesn’t have 20 years to build its reputation. With 24/7 media, globally connected social networks and online marketplaces, investors, influencers, customers and employees can alter the perception of a corporate brand in the blink of an eye.
As corporate reputation impacts valuation, communicators must close the gap between the reality of a company’s current operational status and the perceptions of key external stakeholders. And, the vast array of external influences can interfere with a company’s ability to control its narrative. Given this, it’s more important than ever for a company to use all the tools at its disposal. Where to begin?
It starts with storytelling. Financial and corporate communicators need to build compelling narratives rooted in data that show an obtainable goal, all to be measured by a roadmap that tracks a company’s progress. For all companies, financials are the obvious-and sometimes most critical gauge of success. It’s fairly straightforward: tell your stakeholders what you’re going to do: increase sales, control expenses and grow the bottom line; execute your plan; and then report back. Unfortunately, financials are only one metric used to measure a company’s success and not all companies are at the same moment in their lifecycle.More