The topic of reputation and measuring the impact of its cost has been much in the news of late. An article from the April 1, 2009, edition of the Wall Street Journal entitled “Malibu Shows Road to Revival is Bumpy” tells the story about the challenges GM faces as its products like the Chevrolet Malibu struggle to overcome the effect of deeply ingrained negative perceptions based on historical weaknesses despite the increasingly strong product quality ratings some of its autos have received. A descriptive quote reads, “A perception (my emphasis) of inferior quality is the most serious problem facing GM aside from its financial predicament…”In a similar vein, the March 28, 2009, edition of the New York Times ran an article by Diana Henriques on the disappointing sale price received for convicted Ponzi scheme perpetrator Bernard Madoff’s securities trading business entitled “Bid for Madoff Trading Unit is $15 Million.” The most pertinent quote is as follows:

“Based on trading volume, valuation experts had estimated the business might bring $200 million to $400 million, a figure they said was depressed by the stain his fraud had left on its reputation.”

In a related vein is a paper written by Susan Rose, Stephanie Shipp, Bhavya Lal and Alexandra Stone for the Science and Technology Policy Institute in support of the US Commerce Department’s Bureau of Economic Analysis. Entitled “Frameworks for Measuring Innovation,” it is a comprehensive analysis of issues and methodologies related to the measurement and monetization of innovation and other intangibles.

These are just three of a growing number of examples of how quantifying the financial impact of reputation, brand and other intangibles has never been more timely–a conversation that must be initiated and continued if organizations across industries want to survive a profoundly unstable business climate.

Jon Low is a partner in Predictiv, a consulting firm that measures the financial impact of reputation, brand, communications, intellectual capital, sustainability and other intangibles. He can be reached at jon.low@predictiv.net.