Reputation as an asset

What is reputation and why should boards introduce governance for theirs?

The NHS is one of the most recognisable brands in the UK. A 2019 survey found it to be the most relevant brand to the British public, beating the likes of Spotify, Netflix, PlayStation and Google, all of which occupied top-ten places.

These organisations all carefully cultivate consumer perception and incorporate this into their valuations. As GGI patron Professor Mervyn King has observed, in 1975 83% of S&P’s market capitalisation came from tangible assets such as bricks and mortar. But by 2017, the figure had fallen to just 14%, with intangible assets such as intellectual property soaring to 86% - a significant proportion of which is constituted by the organisation’s reputation.

Given the prominence of the NHS’s reputation in the UK and the efforts made to safeguard and value reputation by other organisations, there is a surprising lack of attention given to the measurement of NHS organisations’ reputation. Healthcare leaders often cite their staff, estates or finances as their core assets, rather than reputation. This is not to suggest that NHS leaders are not mindful of the prominence of the NHS in public life, rather that they do not systematically engage with this and value it as they would with equally important assets.

Reputation is crucial to understand. There may be a host of actors, including staff, patients, system partners, third sector, local authority, NHSE/I and central government, whose views may be of consequence for the organisation. But for an organisation to increase its standing with them, it must first understand what they think so it knows what to improve.

What is reputation?

It may be helpful to clarify specifically what is meant by reputation. Put simply, reputation is an expectation of future behaviour, a form of distinctiveness in the public’s mind. In this regard, it is a reflection of trust in organisations.

Reputation can be divided into six categories:

• Leadership reputation: the organisation’s leaders are visionary and excellent leaders and strong endorsers of their company.

• Performance reputation: the organisation is executing its services and duties effectively and competently.

• Workplace reputation: the organisation values its employees by maintaining a good workplace, rewarding and treating employees well.

• Moral reputation: the organisation is fair, ethical, compassionate and honest and protects its staff and the people it serves.

• Procedural reputation: the organisation is well governed, follows laws, rules and proper processes and adheres to necessary standards.

• Technical reputation: the organisation has the capacity and skills required for dealing in complex environments, independent of its performance.

These are all core elements of any NHS organisation. Importantly, they apply across various stakeholders and can be perceived very differently by each group. Reputation is neither the sum of these aspects for a particular audience for a particular stakeholder, nor is it the reputation in one of these domains to total views of on it across an organisation’s audience.

Reputation can be much more complex, differing within categories and across different stakeholders. An organisation could, for example, have a very good reputation for ethics and a poor one for process among patients, but the reverse also be true from clinicians’ perspectives.

Measures of reputation

While measures such as the ‘friends and family’ test of whether staff would want their loved ones treated at a site may provide some insight on how an organisation is perceived, it does not capture the breadth of views there may be on different aspects of a trust.

Well-led ratings may also be considered a proxy for reputation, but as this reflects the view of the CQC, which may well differ from, for example, patients who may include privileged aspects of performance in their assessments, it still only gives a limited view. Indeed, CQC rating is as much a way of improving reputation as it is measuring it.

Understanding, tracking and controlling reputation can empower the board. As there are so many perspectives to consider, ‘friends and family’, CQC or staff surveys alone do not capture the whole picture. Given that reputation needs to be viewed, and cultivated, as one would financial assets, it needs to have robust metrics and governance to ensure it can be safeguarded.

In its most basic form organisations can use the understanding of their reputation to track and mitigate potential risks posed against it. More detailed approaches include comprehensive stakeholder surveys and online reviews, which are used in the private sector.

As an organisation can have multiple reputations with different organisations, measures would need to be wide-reaching, consistent and longitudinal to measure change resulting from actions.

In doing so, and understanding how reputation varies across stakeholders, organisations can better manage their relationships and measure the impact of their attempts to improve their standing in the eyes of people who matter to them.

Illuminations

• The reputation of the NHS is incredibly valuable and should be managed as carefully by boards as financial assets are.

• In an organisation as multifaceted as the NHS, managing reputation requires robust metrics and governance.

• Understanding how reputation varies across stakeholders can help organisations better manage their relationships and measure the impact of their attempts to improve this.

If you have any questions or comments about this briefing, please call us on 07732 681120 or email advice@good-governance.org.uk