The global economic crisis shined a spotlight on trust and reputation and logically raised this question: How are trust and reputation related?

Trust is the most important resource in modern societies. Our interaction with social partners presupposes that we can trust them to behave in the way that we expect. Trust is built through personal experiences and, most importantly, through recommendations or reputation judgments.

In other words, reputation is a name for trustworthiness.

It's no wonder, then, that the economic crisis shattered trust in the financial markets, and also shifted corporate reputation rankings. A May 2009 survey by the Research Institute for the Public Sphere and Society, focusing on Swiss companies, showed large banks with a reputation deficit in the eyes of consumers while other companies maintained positive reputations. Specifically, the reputations (and perceived trustworthiness) of large banks and small banks were reversed.

Reputation, or trust in a company or brand, changes — for better or worse — only when some facet of corporate reality does.

Before the crisis, major banks in Switzerland (i.e., UBS, Credit Suisse) belonged to the club of the world's most reputable companies. Then the crisis revealed the success of many large banks to be illusory: They had built their futures on flawed financial products. The gap between appearance and reality resulted in reputations that were "too good." Conversely, small banks were largely ignored before the crisis; their reputations were "wishy-washy" and undervalued. However, the crisis revealed these banks to be companies with sustainable business policies.

What lessons for reputation management can be drawn from this?

Lessons from the large banks:

• Sometimes a "good" reputation is not justified. The perception is better than the actual situation warrants.
• When this is the case, the time should be used to change the corporate reality.

Lessons from the small banks:

• Sometimes a perception deficit is not justified. Communication must then be applied to influence external perceptions.
• However, communication cannot always be used to correct adverse external perceptions, specifically when the general thought climate does not permit it.
• Therefore, appropriate reputation management may also mean willingly accepting a reputation deficit for a while in order to remain true to one's own profile despite contrary trends.

In either case, the economic crisis has illustrated that reputation management cannot be reduced to mere communication. Reputation, or trust in a company or brand, changes — for better or worse — only when some facet of corporate reality does.

Dr. Mark Eisenegger is co-head of the Research Institute for the Public Sphere and Society of the University of Zurich, associate lecturer at the Universities of Zurich, Lugano, and Fribourg, and a board member of the European Centre for Reputation Studies. Dr. Eisenegger specializes in organizational and corporate communication as well as reputation research and media transformation.