Reputation is the human dimension of business.  That's one way to explain the difficulty many corporations experience when they try to apply classical business solutions to reputation development.

Business runs on data, which is irreplaceable in assessing operations, productivity, return on investment, etc.  When it comes to reputation, however, you need a great deal more than data to understand how perceptions are constructed in the minds of investors - and how to address the ones you want to change. 

An article in the current edition of BusinessWeek (July 9, 2007) describes elaborate quantitative methodologies some consultants are using to help corporate clients understand how to improve their reputations.  These consultants leverage technology to analyze the beliefs stakeholders harbor about a company in dozens of different dimensions.  They measure customer opinion of brands and levels of worker satisfaction.  They gather views of stock analysts and investors.  They dissect years of company press releases and financial results, as well as newspaper and magazine articles by the thousands.  Determining numerical values in each of these areas should enable a company to identify its deficits.  If you get a low score on employee satisfaction, invest there.  Same with reporters and the others. 

All this information clearly relates to reputation.  But how do those who collect and process it represent its value?  One way:  By its correlation to stock price. 

So, one might wonder why major institutional investors, on whose attitudes stock price depends, don't get more respect than to be lumped in with a galaxy of other groups.  How much influence do journalists and the others actually have on stock price?  "The press is a trailing indicator," one portfolio manager recently told me.  "If I'm getting my ideas out of the newspaper, I ought to be fired." 

Even if our technology-focused consultants overweight investor opinion in their computer models, such opinion is generally so nuanced and various that its reduction to quantitative data will inevitably rob it of much of its value. 

So, can our ability to generate mountains of data seduce us into thinking we know more than we do?  Maybe.  In answering this question, let's ask another:  How do you find out what your investors really think? 

The truth about understanding your investors is that you have to engage them in a richer conversation than a box-ticking exercise.  A set of questions - any set of questions - written by the company and the consultant presupposes a finite set of answers.  It fails to do justice to the depth, variety, and intelligence of institutional opinion on any significant company.  A management can access this depth through open-ended, curious discussions with investors, either directly or through a qualified intermediary.  Such conversations reveal not only what investors think, but why they think it.  While a questionnaire can be useful in launching such a conversation, only intelligence derived from discussions that go beyond the questionnaire enables management to respond to actual investor sentiment and predict its trend. 

Corporate reputation is a lot more complicated than typing in the data.