In a recent whitepaper, the Economist Intelligence Unit argued that this is an increasingly challenging reality which often results in reputational risks. The report identified three major contributing factors to this trend. Expanding social media landscapes cause crises to spread widely and in real-time, making it harder for organisations to respond effectively; geopolitics and nationalist populism are a breeding ground for conflict; and public and investor opinion is increasingly driven by social, governance and climate issues. This is why the Economist Intelligence Unit launched a risk briefing service to help businesses identify geopolitical risks in over 180 countries. Corporate reputation concerns are at the heart of this, but for successful export and investment promotion, both countries and their leaders should be equally mindful of their reputations. 

Risk

In their book Thinking the Unthinkable, former BBC news anchor Nik Gowing and his co-author Chris Langdon explore this new age of disruption. Readers are advised to redefine risk and to expect dramatic changes constantly. This is because the challenges are largely geopolitical, so we must expand our horizons and readjust our perceptions: stereotypes and clichés need to be left at the door. The irony is that despite the enviable position of our top leaders—not only do they have the widest access to information and thus greatest insight into the scale of disruption, they also have the power to do something about it—this group feel most under pressure to preserve the status quo. The resultant inertia exacerbates already-declining levels of trust between public leaders and voters; between business leaders and customers. This results in reputational vulnerabilities.

Australia’s prime minister Scott Morrison, for instance, squandered his reputation while large parts of his country went up in flames, not because he failed to fight (him going on holiday and ignoring climate change had very little, if any, immediate effect on the situation on the ground), but for his seemingly indifferent, inconsiderate and immoral demeanour. Morrison grossly underestimated the larger geopolitical impact of Australia’s bush fires. The rapid spread of (social) media coverage and consumer and investor activism immediately linked current events to wider global challenges which leaders like Morrison are expected to address.

Reputation

Leaders and organisations that definitively address crucial issues with long-term vision and commitment are, unsurprisingly, held in the highest esteem. But while businesses can build their reputation through the global reach of their products and long-term strategies, communities (cities, regions and countries) find it harder to maintain their standing. They largely lack the means for natural global public engagement (with the exception of countries that are recognised for their significant exports, like German electronics and cars; or Italian design and food products). Sure, there is also tourism, diplomacy and cultural and educational exchange through which communities engage with the rest of the world, but those are usually a drop in the ocean compared with the impact of global media (mainstream and social) as they report on—and talk about—what is happening in the world. Think, for instance, about how the image of a massive country like Kazakhstan is (still) dominated by just one Hollywood movie, “Borat”; or Panama by its Papers.

Yet for cities, regions and countries reputational security is also essential, argues USC’s public diplomacy professor Nicholas J. Cull. Which cities, regions or countries will be the ones that are most likely to receive help when needed or are less likely to be scapegoated in times of adversity? It’s those communities that are well-known and those that have a positive image. Just as, conversely, it is easier to attack and ignore countries with bad reputations. That seems part of the reason why Bush pushed his idea of an axis of evil to “brand” countries negatively in order to prepare public opinion for military intervention or sanctions (see also Simon Anholt’s Competitive Identity). It seems clear that reputation management requires a strategic, long-term and proactive approach in which propaganda plays a very limited part.

Purpose

In fact, there is an opportunity to tackle the global challenges that we face while building reputation. Both require maverick, unorthodox ideas that serve a larger purpose. This calls for imagination, and imagination is its own form of courage (in the words of Frank Underwood from “House of Cards”). Likewise, Nik Gowing and Chris Langdon emphasise the need for purpose, values and courage in this age of disruption. It’s obvious that—both today and moving forward—a focus on “self” will not be tenable. What we need are communities that apply holistic, purposeful thinking. A sense of purpose requires an answer to the question: why are we here? What is our role in the world; our visible contribution to humanity and the planet? Cities, regions and countries that are successful in applying this approach, driven by imaginative leadership, are referred to as ‘imaginative communities’.

It is about communities: reputation is built by people feeling connected. It starts with understanding the shared sense of identity, belonging and purpose. It is about doing imaginative things because reputations are built by creating a relevant buzz. This is achieved by reinforcing and showcasing identity and purpose in original, creative, innovative, captivating and inspiring ways that show the world what the community is about. This is how you build a distinctive, relevant, authentic, consistent and memorable reputation.

Examples are places like Bhutan, Estonia and The Hague (Netherlands). Bhutan—a country that has long prioritised wellbeing over wealth—has led the global transition from a fixation on economics to a focus on happiness. Its happiness initiatives—the measurement of gross national happiness, its happiness institute and happiness summits—have now been exported globally. Estonia is a country that has been invaded and occupied so many times over the course of its history that its people have started to question the relevance of territory and borders. They have been leading the way in creating advanced e-states; partly addressing migration issues through e-residency or cybersecurity through data embassies. The Hague, an international city of peace and justice, has created its own peace festival and cyber-security delta.

Such initiatives require visionary, courageous leaders. Pushing imaginative solutions and ideas is, by definition, about testing something new that has not been done before. That involves risk in itself; the risk of failure or ridicule. It brings us back full circle as we need to address risks by taking risks. However, the challenges that we face today require nothing less and—with a little bit of luck—when imaginative communities succeed they will earn recognition, and therefore heightened reputational security. It can be a virtuous circle, but one with high stakes.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.