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CEO Blog: A Cure for a Bad Reputation

The good news in this year of recovery, according to a recent survey by Harris Interactive, is that the number of Americans who say that corporate America has a good reputation is up 50 percent from last year, the first improvement in four years. But before we give ourselves a pat on the back, let’s acknowledge that the increase only takes us to a total of 18 percent. More than four out of five Americans do not think corporate America has a good reputation.

We’ve still got our work cut out for us.

The low-water mark may have been near the end of 2008, when the heads of the big three automakers, metaphorical caps in hand for a $25 billion bailout, flew to Washington in private jets for the first round of hearings when they could have flown commercial — or even driven. If ever there was a national moment of cognitive dissonance, that was it.

Things had to change, and they did.

The fact that American corporate reputation has since improved is solid evidence that there is a cure for a bad reputation. It is simple really, with three basic elements, but it does require a willingness to “do the right thing” first and then communicate.

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Oliver P. Quilla for CNBC.com
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Step Number 1: Just stop doing bad things.

I don’t mean to be glib, and by bad things I don’t necessarily mean gold-plating the fixtures in the executive washroom while pulling the plug on the company day care plan, although that would be a bad thing.

By bad things, I mean stop saying one thing and doing another. There are certainly some organizations with bad reputations that are not evil, but there are very few organizations that have a bad reputation undeservedly, because bad reputations mostly happen when words and deeds don’t match. They happen when an organization creates an expectation that is not met. Trust is transactional.

If you tell me you are going to do something and you don’t do it, you have failed to fulfill the transaction and you lose my trust. In the very worst cases, they create cognitive dissonance – a mind-boggling contradiction between what they say they are doing and what they actually are doing.

Reversing this disconnect between word and deed – like a mathematical proof – explains why a company that has done something terrible can recover its good name. If it is forthright about what it will do to correct the bad thing, and is then transparent in actually doing what it said it would, it can regain trust and good repute.

The need for alignment of word and deed is especially true in relationships with employees.

If the face we present to the outside world does not accurately reflect our values and actions inside our organization, then we have no reason to expect our employees to trust us. Because the employee-customer interaction is the moment of truth for any business, if there’s a disconnect between what we want our employees to say about us and the truth, we are reputational toast.

Step Number 2: Focus.

This is generally a good business practice and life skill in any circumstance, but when you’re talking about corporate reputation, it is essential.

What do you value, what do you stand for?

The longer your list gets, the greater the likelihood that there will be a credibility-killing gap between what you are saying and what you are doing. By all means communicate your values, or your competitive differentiator, or your goals. But integrate your communications so that you are being consistent, even as you speak to different audiences or through different channels.

In the best case, conflicting messages create confusion. In the worst case, they create distrust.

Step Number 3: Get over your fear of transparency.

Do this if for no other reason than to acknowledge the reality of the day, which is that every organization in America is already on display in Macy’s front window.

I happen to think that’s a good thing, but even if you don’t, the simple fact is that corporate America can no longer define its own reputation. Corporate reputation is being shaped by countless conversations happening everywhere — in mainstream media, in social media, or one on one. Your only hope to influence those conversations is to participate in them, and you only get permission to participate in them if you are transparent and real.

Create a real dialogue that creates a real picture with words that match actions.

It really is that simple to cure the reputational malaise and to counteract the near-pervasive public cynicism that has been directed at much of corporate America in recent years. The evidence of improving reputation suggests that the cure is being taken.

It’s also a simple choice to make, because a very real cost of not following the regimen could be as severe as reputational death.

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Ray Kotcher is the CEO and Senior Partner of Ketchum Public Relations, one of the world's largest global public relations agencies and a unit of Omnicom Group Inc.