Reputation Count$

Some of the biggest brands in Australia have added “reputation” as a metric to executive bonus calculations.

Reputation can take a life-time to build and can be destroyed in a single action, or as Warren Buffett once famously said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

But do our leaders do things differently? And how do we hold them to account to protect the positive reputation of an organisation? Money!

Just ask Woolworth’s former CEO, @Brad Banducci. A stellar career by all accounts, leading his businesses through one of its most profitable periods in its history – even if it was at the expense of the 37 per cent of Australians who ‘choose’ Woolies for their weekly shop. Price gauging are the accusations of the current senate inquiry by the duopoly of Coles and Woolies, the findings of which were handed down yesterday.

‍Banducci’s interview and subsequent ‘walk-off’ during his ill-fated ABC Four Corners interview - was meant to be his time to shine. The duopoly that is Coles and Woolies in the supermarket game were preparing to ‘get ahead’ of the pending senate inquiry, and thought they could drive their own narrative and convince the public that they were merely ‘doing their job'.

‍It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.

In Jenny Wiggins Australian Financial Review article “A hot tip for CEOs – reputation counts for everything” Wiggins reveals that some of Australia’s biggest brands; Woolworths, Qantas and AMP; now place maintaining a positive reputation with customers amongst the KPIs for payment of executive bonuses.  

Further, she reveals, Woolworths introduced reputation as a metric, using data from RepTrak, in its long-term incentive schemes for plans vesting from 2024, following criticism of its plans to open a Dan Murphy’s megastore near a dry Aboriginal community in Darwin (the store did not go ahead). That reputation metric now accounts for 20 per cent of supermarket executives’ long-term bonuses, and has replaced targets measuring sales per square metre.”            

These are changing times – and having an ability to maintain a positive reputation as a performance metric, is a big step, in the right direction. As management guru, Peter Drucker, once said “[only] what gets measured gets managed.”

Are you measuring positive reputation and your staff’s ability to impact on your reputation both internally and externally? If not, you should be. Make the reputation of your organisation’s product or services everybody’s responsibility.

I, like millions of Australians, am fascinated at the findings the senate inquiry handed down - the Governments reputation is on the line, to see if it can be bold enough to call out what we all know to be true and then hold them to account.

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