Who doesn’t appreciate recognition?  From the primary school child receiving a ‘gold star’ to the football star receiving the Player of the Year award.  Your people and organisation are no different. So just how important is the power of reputation?

Carbon Reduction Commitment

An example of the potential power of reputation is the Carbon Reduction Commitment (CRC).  The effectiveness of it might have been reduced due to its conversion to a form of tax, yet it nonetheless offers the prospect of highlighting high performers, mid-table dawdlers and low-end laggards.

A company’s placing in the CRC League Table is already influencing the minds of boards that report into the CRC.  Coupled with the increasing price of energy, boards are beginning to realise that a poor placing in the table may hit their bottom line with both direct and considerable force.

Recognition & Loss Aversion

The other dawning realisation in boardrooms is the reputational aspect of the CRC.  The organisations that have succeeded in the first league table will be congratulating themselves and those at the bottom will be considering what went wrong.  Coming in the bottom quartile of a league table is often a more powerful driver for change than success.  This is a well known behavioural trait called loss aversion (ask a sacked football manager for his views on this).

The most powerful external recognition/loss aversion drivers are those against your direct competitors.  Considering how competitive certain industries are (food retailing for example), you would not want to be the energy manager of the organisation that came bottom of your section of the CRC League Table.  Serious questions would be asked by your boss, and perhaps even the board.  To detail the ranking of particular industries, the sustainability management software experts at Hubsphere have created a very useful break down of the league table.  You can access their information here.

Internal Status

The power of reputation and status also works internally.  Departments, sites and individuals are often put in league tables.  Even if they have no direct financial benefit attached to success, there is often fierce competition both to come first, and possibly even stronger, not to come last.  Furthermore, recognition via awards and other similar tools offer a great motivator for people.  These incentives make people feel good about their efforts, increase their own internal PR and also makes others perhaps even a little jealous and motivated to contribute.

There are some great of examples of making the power of internal reputation work in sustainability, including InterfaceFLOR.  For more detail, you can read the GreenWise blog I wrote about them here.

Leveraging Reputation

In summary, if you want to deliver sustainable change, regardless of your organisation, one of your most important tools is leveraging both internal and external reputation to create multiple benefits.

This article first appeared on the GreenWise Business Blog.

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