Ask a CEO who is in charge of his or her company and they won’t blink before saying, “I am.”
Ask that same CEO who is in charge of the company’s credibility you might get a different answer such as, “that’s the PR department’s job.”
Whether you are a first-time entrepreneur or a veteran company executive, one vital aspect of growing a business, raising capital, or selling a product that’s rarely discussed at seminars is building your company’s credibility, reputation and trust. Because it is not easy to measure these important qualities in dollars and cents, they rarely get much attention in quarterly reports. Busy CEOs charged with concentrating on bottom line finances and product advancement don’t always see the connection.
Big Pharma companies rely mostly on tangible assets and accomplishments in their efforts to build credibility and reputation. For most biotechs, paydays and tangible assets can be a long way off. Biotech CEOs may start their corporate life with the goodwill of investors who see a compelling idea and innovative technology with payout potential. But such impressions can be fleeting at the first sign of trouble. That’s why building reputation and trust while building your company is so important. Once lost, trust is challenging to rebuild.
A former colleague once said, “Trust is an elusive quality—as visceral as it can be intellectual. It’s the glue that cements investor to entrepreneur, shareholders to a company. It is built slowly and there are little litmus tests along the way—candor, openness, sharing bad news as well as good, and the need for CEOs to be concerned over perceptions.”
Company credibility often comes down to getting the benefit of the doubt (BOD) when you need it especially when things go wrong. BOD can be an important weapon for a company in the contest for investor, media and public opinion. Without earning BOD investors can become impatient, the ability to raise capital becomes harder, and analysts and the media can downgrade you or write you off. This is especially important for biotechs where the payoff is often long term.
Most management teams will agree credibility and trust must be earned. But establishing credibility does not relate solely to generating awareness or headlines. Confidence in a company isn’t always generated by road shows or media tours. A sense of integrity is an elusive quality and as much a consequence of how you do things as what you do.
CEOs are well advised to give thought to the following:
- Have you codified your company vision, making it easily understandable?
- Do you report company progress with candor?
- Do you speak to local groups about what your company is doing and why?
- Do you “give-back” to the community?
- Do you write op-eds on industry issues?
- Has your PR/IR team made building trust part of its pitch/plan for you?
CEOs should take the initiative in the process of building company credibility, reputation and trust. Together with company officers and your team of Public Relations/Investor Relations professionals, manage your company’s reputation just like any other corporate asset and make it a high priority on your agenda.