Forbes: The Most Reputable Tech Companies In 2016

The Most Reputable Tech Companies In 2016
By Monica Wang

At Amazon, customers are treated like royalty, but employees endure what many media outlets have described as a brutal work culture. Yet despite the discrepancy between the two and increased scrutiny into Amazon’s work environment, the online retailer has been named the most reputable tech company today by the Reputation Institute (RI), a global reputation management consulting firm with American headquarters in Cambridge, Massachusetts. What’s more — according to a ranking of the most reputable American companies in 2016, which RI released in March, Amazon tops the list across all industries.

“We tracked their reputation during that whole [public relations] crisis when the New York Times article came out about their workplace practices,” RI senior analyst Zachey Kliger told Forbes, adding that researchers measured a noticeable decline in the summer and fall of 2015. “Then, toward the holiday season, [Amazon] recovered really quickly. But they haven’t fully recovered, and really the driving factor behind their bounceback is how strong they are in products and services, innovation and financial performance.”

RI Vice President and Chief Research Officer Brad Hecht explained that his firm takes a multilayered approach to measuring reputation, with the most reputable tech companies list being an offshoot of the overall reputation research it conducts in the first quarter of every year. The 83,000 general survey respondents in 2016 were selected to be representative of the U.S. population and were asked to rate only the companies they felt “somewhat” or “very” familiar with. For this particular ranking, RI considered around 100 tech companies. Each was assigned an emotional connection score, which RI calls the RepTrak Pulse, and was also measured in terms of seven “rational dimensions”: products and services, innovation, workplace, governance (or external communication with stakeholders), citizenship (or corporate social responsibility), leadership and performance. Companies were ranked according to their Pulse score, he said, with the different dimensions adding insight into how they earned that score.

In Amazon’s case, both Hecht and Kliger agreed that the company was able to weather the blow to its workplace reputation because of its unparalleled domination in e-retail and its loyal customer base. In particular, Hecht noted that Amazon learned from its delivery problems during previous holiday seasons, made sure delivery was seamless this past Christmas and just generally impressed its customers. But, he said, “it’s going to be harder and more expensive to hire people into Amazon now. The company will get less benefit of the doubt from the media, investors and so on than in the past.” In other words, Amazon’s reputation will most likely stay at or near the top of the list in the short term, but it may start to dip in a few years — unless the company begins to treat its employees and community better.

On the other hand, RI concluded that Samsung, last year’s winner and this year’s No. 2, is on a “meteoric rise.” Its Galaxy products have won over countless consumers, and the company continues to innovate and focus on cutting-edge technology. There is no doubt that Samsung fares well in products and services, innovation and financial performance. But more important, Samsung’s leaders have started to bring corporate social responsibility (CSR) to the fore. Hecht said the company has successfully aligned its corporate strategies with community initiatives, making both about using technology to accelerate human progress. It has implemented a code of conduct in the workplace and demonstrated a commitment to the environment and other social issues.

“It doesn’t hurt that their product is top notch too,” he added.

The three dimensions of workplace (or culture), citizenship (or CSR) and governance (or transparency) heavily influenced reputation in America’s tech industry this year. Kliger said this is likely part of an ongoing trend, given that those three concerns now account for 45% to 50% of the final score, up from 40% a decade ago. In fact, a popular company that’s plainly missing from the top 10 this year, Tim Cook’s Apple, scored poorly because of its opaque company structure and unwillingness to engage in socially responsible acts. Hecht said he had trouble just finding Apple’s CSR strategy on its website, where it was tucked away in a remote corner.

While its competitors have increased their focus on social impact and openness, Apple has not made the full transition yet. Of course the company delivers on its products, and consumers love Apple for that reason, but Hecht said it is making the mistake of putting products above the company and its social and ethical commitments. Apple’s Pulse score actually increased since last year, meaning people continue to feel emotionally attached to the brand, but its “citizenship” rating dropped. Across all tech companies, Apple’s score in that dimension was only average.

“Tim Cook has spoken out about a few causes that are relevant to him, but he hasn’t woven those initiatives into business strategies,” Kliger said, adding that the union of the two has been critical to other companies’ positive reputations.

Another takeaway from this year’s results is the importance of social responsibility to millennials — the 18- to 34-year-olds who are becoming the largest consumer base in the U.S. In fact, the most reputable tech companies are faring especially well with that age group. And to have a positive reputation among millennials, a company has to learn how to attach the critical issues that these young people care about to the company’s vision or strategy.

Why, you might ask, is reputation important at all? It certainly doesn’t seem to be affecting the performance of Apple, Google, Facebook and other big names in tech that didn’t make it into the top 10. Perhaps not in the short run, but Hecht said reputation drives long-term results. Reputation will ultimately influence where consumers choose to buy products, where investors decide to put their money, and where talented employees want to work.

New media companies like Facebook, Twitter, Instagram and Snapchat are struggling in those non-product dimensions, but one reason may be their relative youth and lack of mature corporate structures. The general trend is still positive: Last year, no tech company had an excellent reputation (which RI defines as a score at or above 80); this year, four companies earned that honor. So RI reported that tech as an industry is improving in reputation.

In the past, tech companies focused on differentiating themselves solely through their products. But as the industry slowly matures, it is now critical to look beyond product innovation. Tech leaders have to think about their companies’ social responsibility and impact, reputation among millennials, and ability to attract and retain diverse talents. Companies that want to lead the pack have to win at all those things.

For slideshow and full ranking, click here.


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