Ignore reputation at your peril, warns RepTrak MD

By Megan Brodie 1 month ago | In People
  • 1 month ago

22 April 2024

Oliver Freedman is Australia’s king of corporate reputation, the RepTrak Managing Director’s 25 years working with companies globally placing him at the head of his field. He says when it comes to a company’s reputation, taking a ‘set and forget mentality’ is no longer a safe option.

Freedman says pharma companies are in the enviable position in that what they do matters. Society cannot do without the medicines pharma companies develop and make, but he questions whether this is enough to protect them in a world where consumers are increasingly looking to governments to protect their interests.

“I always ask senior leaders, if your business left Australia today, how would Australia be worse off?” says Freedman. “If the community can answer that question, generally your reputation is fine, but if people think someone else will just step in and produce the same product, that’s a problem.

“The amazing thing about pharma is this is an easy question to answer.”

Is doing nothing a safe option?

Freedman argues pharma companies have, as a consequence, developed an entrenched position that the risk of doing something is higher than the risk of doing nothing when it comes to brand reputation.

“Always doing nothing is viewed as safe but I think we have to change that view and say, action and inaction both offer risks and opportunities,” he says. “You need to weigh up both and have an honest conversation. I don’t believe doing nothing is treading the safe path any more – I don’t think that’s true for anything in life.”

While pharma companies may say corporate reputation is important, Freedman says this can translate into a defensive position rather than a proactive position, developing a strategy to build a positive reputation.

“For companies that are not consumer facing is, the question is, does reputation even matter?” asks Freedman. “That’s the big question for pharma and historically, why it has always been quiet.

“Consumers take the medicine their doctor prescribes regardless of who makes it, so historically there has been no behavioural outcome for pharma resulting from its reputation, but in the last five to six years community acceptance of, and almost demand for, regulation has changed.

“Twenty five years ago, the community wanted a free market and for government to get out of their way. Now, community wants government to step in and regulate every part of their lives. In countries like Australia where there is compulsory voting, industries need to be even more concerned about what people think.”

The risk of regulatory red tape

Freedman points to the NSW greyhound racing sector as an example of an industry that had its social license to operate removed by government due to public opinion before it was reinstated, arguing a crisis is usually not the time to build support for your corporate brand.

“We are never out of an election cycle and governments are constantly looking for ways to give the community something it wants that won’t cost money, and regulation tends to cost industry, not government,” he says.

“Regulatory reform that reduces prices is a way of handing something to the community without impacting the budget, and to be seen as keeping an industry honest.

“The traditional way for industry to manage this is to have excellent relations with government, but that is the old view. I don’t think in today’s world it works, because if government needs the money and the community is happy to see big business pay more, government will make that decision, which is why reputation among your broad stakeholder groups is so critical.”

A track record in reputation

Arguably Australia’s top adviser in corporate reputation, Freedman has been practicing in this space his entire career having moved from Australia to New York in the late 1990s where he launched one of the first reputational measures in partnership with the Wall Street Journal.

“I have since witnessed the journey companies have been on, first to understand what reputation is and then how it differs from other key metrics like brand. Now people know reputation is important and that we need to measure it, but how do we measure it? How do we move it or protect it? It’s been really interesting for me to walk through that journey over the last 25 years or so.”

Working in the US with the likes of Pfizer and BMS and experiencing a market where brands could more openly promote themselves was a great initiation for Freedman. He also worked with Charles Fombrun, founder of an academic think tank established in 1997 called The Reputation Institute.

Freedman returned to Australia in 2001 and worked for AMR, a market research company that partnered with The Reputation Institute to develop a tool to track and measure reputation, RepTrak, its success resulting in the Reputation Institute rebranding as RepTrak.

AMR had the license for the RepTrak product in Australia and Freedman headed up AMR until 2018 when RepTrak decided to establish its own offices globally, inviting Freedman to lead the Australian office.

“We haven’t formally adjusted our model since 2008 as the foundations of reputation have remained the same, although there are theoretical differences as to how to define reputation,” says Freedman. “The real key is long term data and being able to look at companies before, during and after crises.

“I am of the view you can’t just ask people which company has the best reputation and which has the worst, because a lot of big companies will top both lists. Awareness is not the key to reputation; it is the emotional connection people have to the organisation.”

Freedman says in today’s world, leaders play a vital role in shaping corporate reputation, needing to show both capability and character. How companies treat their employees and stakeholders speaks to character, while they also need to show they are having a positive impact on the environment, support good causes, and have a positive impact on society.

“The last one is the most important,” he says. “For pharma, no one else can deliver your drug, so of all the industries I could work with, pharma can answer better than anyone else what their impact is but industry needs to focus on the positive impact of its products, not the features.

“I don’t need to know statistics about number of patients with a disease, I need to know the benefits the drug brings to their lives. In America, that’s what they advertise and while I don’t think that is a good path for Australia, I do think talking benefits speaks to character.”

Oliver Freedman will MC MedNews’ Corporate Reputation: Building trust in the digital age event being held in Sydney next Wednesday, 1 May, and engage in a fireside chat with MedNews editor Megan Brodie.

Last tickets on sale now. Click here to secure your place.

©MedNews 2024

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