Performance ÷ Promise = Perception
As stated before on these pages, organizational culture is the realm of values; operating culture is the realm of value.
While the reputational brand is the sum of the organization’s values and value, the latter provides the more substantial source of differentiation by virtue of executional proficiency. You can have wonderful ideals along with amazing innovation, functionality, or design, but you still need operational fluency to unerringly deliver expected or promised value.
So, by testing the ambitions of the organizational culture against the crucible of moment-by-moment performance, operating culture is where the rubber meets the road. Only operating culture can answer whether we are actually delivering the value we promised and the experiences people expect from us.
To that end, operating culture is oriented to consistent, repeatable, and reliable performance through SOPs, processes, technologies, and practices that help standardize methods of production. And while systemization helps to regularize performance, the attendant processes and procedures still need to be imagined and designed according to value-based criteria as well as expected brand experiences.
Ultimately, brand reputation comes down to a simple formula: Performance / Promise = Perception. Put another way, does the organization underperform, meet, or exceed expectations around its value proposition and its observable values?
On the margins of this formula are variables such as “citizenship” (i.e., ESG and DEI), rogue events (disasters — natural or otherwise), emergent issues (social, political, or commercial) and knuckleheads (no organization is immune), any of which can dilute or evaporate reputational equity.
Many reputational variables can be managed effectively with proper risk mitigation and response/recovery planning; however, the unforeseeable “black swan” remains an existential reputational risk for any organization.
While one stakeholder may not care about the same things as another stakeholder (i.e., customer, versus shareholder, versus employee), the well-integrated, operationally proficient organization need not worry about such reputational hierarchies. Perform well against your implied or declared promises (values and value) and your brand reputation will take care of itself.
Still, even though we have confidence that the promises we make can be fulfilled, we often overestimate our ability to deliver what we promise. Whether the resulting expectation gap is a hairline fracture or akin to the San Andreas fault, it’s an assault on brand reputation.
Forestalling injurious brand consequences is all the more reason to think of brand as the product of a system, or as a system in and of itself. Indeed, knowing how you want to be regarded and consciously designing the instruction sets to achieve reputation-sustaining organizational culture and operational fluency is the entire premise of brand system theory.