CEO Insights on Brand Protection

by | Mar 31, 2017

brand reputation

A business is its brand reputation. This is especially important in an age of consumer demand for perfection. Every day I read another story about the power of the millennial buyer and how they are more loyal to companies with a #purposebeyondprofit. That is even true for B2B buyers, given that millennials have surpassed Generation X as the largest portion of the workforce. This ethical focus means that a brand must inspect every part of its business, not just because it makes financial sense, but also because it’s the right thing to do.

But how do you protect something you cannot see, touch, hear, taste, or smell? Given that any ethical scandal can devastate a brand’s reputation, I recommend business leaders do three things to protect themselves.

1. Choose Suppliers Carefully
Choose suppliers that meet internal — and rigorous — codes of conduct in addition to third-party certifications such as Fair Trade or ISO 26000. Every business has a supply chain. A hair salon franchise sources shampoos, scissors, and those weird capes.

While those items might seem more benign than say an electronic device made with rare-earth minerals, they might not be. The bottle manufacturer of the shampoo could use forced labor. The shampoo ingredients could emit toxic fumes during production — fumes that harm workers’ health and break environmental laws. You get the idea. Every business has a supply chain, and the only way to prevent supply chain scandals is by implementing robust supplier qualifications.

2. Check Up on Your Suppliers
Conduct regular inspections of those supplier standards. As W. Edwards Deming noted, “In God we trust; all others bring data.” Even the best supplier standards are meaningless if they’re not enforced. All brands — from Coca-Cola to Ace Hardware — need to monitor suppliers with routine inspections. This brings visibility into suppliers and makes it possible to correct issues before they become a scandal.

“It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffet

Inspections can identify minimum wage violations, illegal use of a subcontractor, or improper use of fire safety equipment. Regular inspections also act as a form of insurance. Imagine a story breaks about an unethical T-shirt factory. If your inspection results show no violations of labor or safety standards, then you can sleep easy knowing that your company — and brand — is doing the right thing.

3. Use Data to Drive Decisions
Make business decisions based on inspection results. This is where business ethics matter most. It can seem impossible to switch suppliers after they fail multiple workforce inspections. It’s tempting to justify staying when you tell yourself “They’ve worked with us for years” or “They’re great at building prototypes” or “They are cheaper than anyone in the region.” However, there is no excuse for child labor, forced labor, or corporal punishment. So my plea to business leaders is to act on inspection results. If you have a supplier that is unwilling to comply with your Code of Conduct and local laws, then it’s time to move on. It’s up to all of us to ensure a safe, healthy, and clean environment for all workers — even those we do not see in our break rooms.

Deloitte’s reputation risk study concludes, “[A] company’s reputation should be managed like a priceless asset and protected as if it’s a matter of life and death, because from a business and career perspective, that’s exactly what it is.”

Subscribe to our Blog

Why you should do this

Proven! Powerful Quality Platform & Auditing App