That’s the topic of a white paper from Saïd Business School’s Oxford University Centre for Corporate Reputation in the United Kingdom and the University of San Diego School of Law in California.
“The effects of information networks and 21st-century instant communication work in surprising and often counterintuitive ways,” says Rupert Younger, center director at Oxford. “These effects can distort markets and damage the reputation and health of businesses and governments. But they also provide particular challenges and opportunities in terms of how reputations can be created, sustained, and rebuilt.”
The paper covers reasons why people post extreme views online, the positive and negative impact of networks, the kind of content that influences an institution’s reputation, and the psychological “herding” tendency that can unduly influence online ratings of products and services. It also suggests ways to counteract biased information and guard against the threat it poses to reputation.
“The effects of 21st-century instant communications provide particular challenges and opportunities in terms of how reputations can be created, sustained, and rebuilt.”
—Rupert Younger, Oxford University
These suggestions include adopting strategies to embrace, not fight, what the authors call “the democratization of information”—that is, how large groups can use information networks to influence change. To that end, the authors encourage business leaders and policymakers to engage with the public and build trust on these networks, rather than maintain distance for fear of losing control of their messages.
The paper outlines several recommendations to leaders charged with the reputations of their organizations. First, they should do more to manage today’s lightning-speed information cycle, rather than simply react or fall victim to it. Second, they can counteract biases both by welcoming discordant views and by responding quickly to misinformation. Finally, they can invest in socially driven initiatives and incentives at the business and government levels that support the desire of their stakeholders to do good works.
In general, “private and public leaders [should] attempt to harness the power of ‘yes and’ rather than ‘yes but,’” the authors recommend. “For example, businesses could focus their risk management efforts not on regulatory requirements and negative possibilities, but on the potential for positive outcomes.”
Contributors to “How Reputations Are Won and Lost in Modern Information Markets” include Twitter co-founder Biz Stone; senior executives from companies such as Experian and Millennium Management; journalists from Reuters, CNBC, and The New York Times; and academics from Stanford, Oxford, MIT, and the University of San Diego. The paper is available at www.sbs.ox.ac.uk/sites/default/files/CCR/Docs/whitepaperfinalpdf.pdf.