This article is part of a series of op-eds by CEO signatories who are part of CEO Action for Diversity & Inclusion, the largest CEO-led business coalition focused on advancing diversity and inclusion in the U.S.
By Dinesh Paliwal, CEO, Harman
I’ve been a lifelong lover of music, so when I was offered the position of CEO at Harman 12 years ago, I jumped at the chance to lead the parent company of renowned audio brands like JBL, Harman Kardon and AKG. These brands have been recognized with multiple Grammys and Academy Awards; and have even earned the trust of music legends like Sir Paul McCartney, who recently told me that the Beatles used Harman’s Studer J37 four-track to record the Sgt. Pepper album in the 1960s at Abbey Road Studios. McCartney has been a loyal Harman fan ever since.
Harman’s ability to foster and retain customers’ trust in our products has helped the company thrive and expand over the decades to include new technology like smart products and connected services. But products and services are just one piece of the reputation equation. A positive reputation is critical to the success of all companies — from other legacy brands to innovative startups looking to make their marks. So, how can board members and other leaders bolster the reputation of their businesses?
A recent Axios Harris Poll study laid out a framework to evaluate an organization’s overall reputation, concluding that, in order to win over modern customers, executives must uphold three primary guideposts: character, affinity and trajectory.
Character
An organization’s character is founded upon its commitment to a strong set of values, including how it approaches citizenship, ethics and culture.
Citizenship: Today, consumers have more choices and purchase power than ever before. With increasing competition, brand loyalty is no longer simply dependent upon price, quality and flashy packaging. Shoppers don’t just want to buy products and services — they’re looking to buy into causes that align with their own values. Nearly 9 out of 10 customers say they will purchase a product from a company that advocates for an issue they also endorse. Consequently, companies that support environmental and social causes that are congruent with their brands often enjoy increased customer trust and loyalty.
Ethics: Being a good corporate citizen entails more than promoting a purpose. Businesses must also approach their commitments ethically for maximum impact. Customers can often tell when a corporation’s actions aren’t genuine, which can lead to a breach of trust and reputational damage. In contrast, many of the companies that top the Axios Harris Poll study built their business models on ethical foundations, as opposed to tacking morality on as an afterthought. Corporations that make their purpose-driven mission statements inseparable from their day-to-day operations are likely to see the results reflected in their reputations.
Culture: A happy workforce has been found to positively affect many facets of a business, including productivity, profitability and prestige. Leaders looking to create a fantastic work culture should prioritize transparent top-down communication, diversity and inclusion initiatives, growth opportunities for employees and collaboration across divisions, regions and partner organizations.
Affinity
The most effective way to build long-term relationships with stakeholders is to earn their trust. Without this critical ingredient, maintaining a positive reputation among investors, board members, customers, employees and partners is nearly impossible. The 2019 Edelman Trust Barometer even found that employees who have trust in their employer are far more likely to engage in beneficial actions on their behalf.
At Harman, we establish trust through accountability. As outlined in our 2018 Sustainability Report, Values & Velocity, we set ambitious goals, implement organizational incentives and hold team members accountable for the outcomes. Some of the results I’m most proud of include Harman’s unwavering commitment to accelerate female representation at every level of the organization, meeting our aggressive goals to reduce our carbon footprint by 10% in 2018 and bringing youth music education to underserved communities nationwide.
Trajectory
Cultivating a conscientious corporate character and establishing trust are both effective ways executives can improve a company’s reputation, but these strategies can only get a business so far. To build an organization stakeholders can really rally behind, leaders must also communicate a clear vision, deliver growth and continually innovate to develop quality products and services.
Vision: Selecting the right mission, vision and values often begins in the boardroom. Once the key decision makers are on board, it’s much easier to execute a strategy that drives real, lasting cultural change and get buy-in from employees. For instance, Harman’s vision and mission — to design and deliver smart products, systems, software and services that connect people wherever they are — permeates every sphere of our business. This wouldn’t be possible without the tone set from the top thanks to constant, transparent communication via regular emails and open forums. This regular correspondence shows all members of the Harman family how the vision is playing out, what’s working, what may need to be adjusted and what comes next.
Growth: Many metrics measure success, including increased revenue, headcount, geographic presence and output. In my experience, organizations that have a track record of innovation and growth also possess a strong commitment to global purpose and sustainability initiatives that encourage goal-setting and generate ongoing momentum — not just to surpass today’s business goals, but to work toward tomorrow’s well-being.
Products & Services: Progress demands innovation. Innovation doesn’t exist without new ideas. New ideas come from employees with varied cultures and experiences. That’s why inclusion is a value we’re particularly passionate about at Harman. I’m proud of the progress we’ve made by investing in talent from a wide range of backgrounds and championing female role models, but it’s important to recognize that D&I is an ongoing process and that our work is never done. So much depends on our support for future generations of leaders, as well.
Many of the qualities and actions that evoke reputational trust are intertwined. Growth is dependent upon a clearly defined, authentic vision. A positive culture feeds into product innovation. Affinity is driven by good corporate citizenship and ethical practices. Executives and boards must regularly evaluate their company’s character, affinity and trajectory to generate momentum. Only then will they build and sustain a reputation worthy of admiration and emulation.