The shareholder activism at the Barloworld AGM this past week should serve as a lesson to companies about what happens if you do not manage your reputation in a dynamic manner. Not only did the organisation lose its Chairman, but it faced the wrath of stakeholder activism.

The Business Report articles –http://tinyurl.com/2asp3c and http://tinyurl.com/329qlj contains some serious lessons for executives serious about managing an organisation and its reputation in a changing environment.

An organisation’s reputation is a dynamic entity. It fluctuates all the time and it is affected by the interplay of environmental factors such as socio-economic developments. Thus what drove your organisation’s reputation last year may no longer be valid. What drove your reputation last year can now become its Achilles heel.

In the case of Barloworld they did not transform the organisation quickly enough and the issue of executive remuneration again raised its head. “ The reporter writes :“The chief executive of the PIC (Public Investment Corporation), Brain Molefe, in what many said did not bode well for Barloworld, said he found it strange that 13 years into the new democracy the company had no black executives”.

Now they do, but now their reputation has been tarnished. They have been forced to change, and the negative publicity that went with it did not exactly paint a picture of an organisation that is pro-active. Perhaps the problem is the same as in many organisations where executives just chase the bottom line and forget that there are stakeholders whose stake in the success of the organisation is not just based on monetary reward.

In many cases, organisations want to change but the understanding of what it takes is slow. Look at the following formula and apply it to your organisation.

Change = D+V+S+C

For change to happen a business has to:

– Be dissatisfied with its present state

– Have a clear Vision of where it wants to go

– Take the necessary steps to get there

– Create enough energy (or tension) to overpower the COST required (in terms of money, time and energy) to make the change happen

Covey talks about starting with the end purpose in mind. Where the organisation sees itself to be is vital. In today’s environment change happens so quickly that organisations are often caught napping. Innovation needs to be a crucial value in any organisation if it wants to stay abreast of change.

The alternative is to have a damaged reputation.

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