Recent research conducted by the Quoted Companies Alliance and the accountancy firm, BDO, has determined that over 28% of a UK company's value can be attributed to its reputation.
Consider the recent Volkswagon emissions scandal. In a matter of weeks, the company's value was diminished by £15bn as revelations of company-wide organised deception wreaked instant havoc with a previously hard-earned reputation.
Large supermarkets often fall foul of customer expectations. News items regularly expose the gaping chasm between their heavily-marketed family-friendly images and the reality of their hard-nosed business practices. Stories of horsemeat, squeezing suppliers, ruining dairy farmers and policies of late payment to suppliers cost supermarkets' reputations dearly and should stand as a warning to other companies who are heedless of the value of their good name.
The speed with which information is disseminated in today's world makes the guarding of one's reputation even more relevant. It is vitally important that any company react instantly and decisively to any whiff of scandal or customer dissatisfaction likely to discredit its name.
Being informed, knowing the detail alongside the bigger picture will arm you with the information you need to understand how to preserve your company's position. Garner and analyse your customers' and employees' feedback on a regular, ongoing basis to bring to the fore any issues that could threaten to undermine your company. As Warren Buffett famously expounded, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."