Reputation, reputation, reputation
Reputation has never been more important. With consumers cutting back on their spending, those times they do splash out they will tend to stick to the brands that they feel loyal to and those that they feel provide good value for money.
A recent CBI report forecasts gloom right up to Christmas with the UK high street suffering slumping sales and retailers shedding jobs at the fastest rate in two years as they prepare for tough trading conditions. So in such a squeezed market, retailers must encourage every penny consumers are willing to part with to come their way. And the best way to encourage people to step into your store or click on your website is to have a very well managed and protected reputation.
In a roundtable we hosted this week, many business professionals from the legal world met to discuss how managing risk is vital to the protection of reputation and building business. Amongst those speaking were Clare Wardle, group legal director of Kingfisher PLC, highlighting the importance of risk management when building and sustaining a brand in the incredible competitive world of retail.
First things first, to protect your reputation as a business you must comply with regulations and manage risks, this is 'getting the basics right' at its most critical. An organisation's lawyers should take on the role of defining what 'corporate governance' and 'risk management' looks like, adapting it to their business and its corporate structure, ensuring it becomes part of the institutional fabric of the business and then finally using it to achieve competitive or financial advantage from it.
If you can be sure that every compliance box is ticked and every risk considered and planned for, then you can make commercial decisions with a positive attitude to risk, turning avoidance to advantage, even in such economically dour times.
Well governed businesses taking affordable risks for commercial advantage are the ones that will survive and thrive and hopefully lead the way to better times on the high street. Sticking to just playing it safe won't increase your market share or take you to new levels. However your risk management must be water-tight, and your compliance and risk officers on the ball, a good reputation once lost is lost forever, or at least a good while. As we all recall, Ratner's comments about the 'questionable' quality of his jewellery in 1991, once made public, certainly didn't prove to be good for business.
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