How To Make Better Decisions And Avoid Reputational Damage

Companies that possess a strong purpose—one that does good as well as makes money—and consistently base their decision-making against this criterion will be those that build legacies to last the test of time.

As humans, we’re hardwired to detect patterns. At its scientific core, pattern recognition helps us learn words, recognize people, and even power our survival instincts. But it’s also a vital component of the business world. It informs how we learn and make decisions. It determines who we trust and don’t trust.

The interconnected nature of our world means people have almost unrestricted access to the ins and outs of the companies from which they buy. Today’s brands can no longer “dance like no one’s watching”—they must act like everyone is watching.

That’s why companies that possess a strong purpose—one that does good as well as makes money—and consistently base their decision-making against this criterion will be those that build legacies to last the test of time.

Corporate Accountability: Engendering Trust With Moral Actions

Generally speaking, when we make business or life decisions, we use a set of objective criteria to settle the outcome of said decision. A good example is hiring new talent, during which HR or recruitment teams use scorecards to evaluate each prospective candidate to determine their viability for a specific role, whether that’s experience level, qualifications, or skillset.

In the future, the same concept must also apply to high-level business decisions—both value-based and economical. Ultimately, the decision you’re making has to match your ethos and your brand purpose. If not, you should either question whether the business decision is right in the first place, or whether it’s an important enough decision to warrant redefining your brand purpose.

When embarking on any major business decision, brands should operate against a set of objective criteria that takes into account how people—the general public, or reporters who scrutinize decisions, questioning whether they match your past behavior—may respond in the future.

Amazon, for example, immediately came under fire following its acquisition of One Medical earlier this year, with critics pointing out the numerous shortcomings of its previous healthcare offering Amazon Care (which will cease to exist at the end of 2022).

This is where past actions and accountability of organizations involved must be held to a higher standard. In the Amazon example, this comes in the form of better access to critical information about the organization’s own business practices: How does the company treat its own employees in regard to health and wellbeing? What is the company’s attitude toward abortion and female rights? What is the organization’s gender breakdown at the executive level? How is the company addressing the gender pay gap across all age and seniority brackets?

If the general public is expected to trust organizations with their own personal health, these are the questions that need answering. After all, if Amazon is found wanting in any of the above areas, how is the general public expected to trust such an organization with their own health and wellbeing?

Diversification: When It Does and Doesn’t Make Sense

That’s not to say that branching out into different areas can’t drive some pretty spectacular results. Indeed, 2022 research from Kantar shows brands that have diversified into multiple categories show faster brand value growth. Of course, these extensions can vary from the obvious (i.e., Apple evolving their tech offering to include news and gaming) to the more unusual, such as IKEA recently announcing its own range of smart televisions.

IKEA is widely recognized as an affordable furniture store, so its decision to expand into electronics turned a few heads when first announced. But if you analyze the likely motivation behind the decision, it actually makes a lot of sense.

IKEA’s USP is affordable and easy-to-assemble home furniture and accessories that are stylistically clean and simple, so this business decision for diversification is in keeping with their brand purpose and ethos—and you’d better believe there were lengthy discussions about exactly that.

But conversely, brand diversification can go (very) wrong. The annals of history are littered with brands desperately trying to expand into new markets or releasing new products that just didn’t match their brand identity, or didn’t take into account their past actions.

Take the massive flop that was Google Glass, for example, which probably targeted the wrong market (consumers instead of businesses), and was released just four months before a major data breach compromised millions of Gmail users. People just didn’t want to trust Google with more data following such a significant cyberattack.

This concept of increased accountability goes in concentric circles. On one hand, business leaders should ask themselves how they view any potential business decision—both from a personal and ethical perspective—and from a business standpoint (impact on revenue and bottom line, etc.).

But, on the other side, they must also examine how society at large will react, whether that’s existing customers, partners, or even the media. The biggest fear facing many brands before embarking on major decisions is whether the activity will cause reputational damage, which is why it’s so important to analyze whether your past actions and current brand purpose match the moves you’re making.

The Future Is Watching: Today’s Actions Will Determine Future Success

In an era in which everything is recorded, everything is remembered, and everything is rated, we must hold ourselves more accountable for the decisions we make and the impact we’re making on the world. If the internet age proves anything, it’s that the future is watching and scrutinizing everything we do, right now.

A moral decision an organization makes today could have severe ramifications in the future, whether that’s losing a potential new line of business, or a partner cutting ties based on bad historical decision-making.

As business leaders, it’s our duty and responsibility to evaluate our history and the decisions we have made—whether that of the organization or its executive board—and use the past as a predictor for what will happen in the future.


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