Reputation management is a process whereby an individual person or group, such as a business, is assigned a ‘ranking’ based on how that individual or group interacts within a larger structure. Reputation management usually takes the form of professional software or a specially developed application. While there are free versions of this technology, in practical market terms, reputation management is usually handled by what is known as “innovation management software.”

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Innovation management software allows large global corporations with literally hundreds of thousands of employees to gather ideas from their workforce, and correspondingly assign reputation rankings to each individual employee. The employees can earn their reputations based on how their comments are rated by both their peers and their superiors. In this instance, reputation management is a constantly evolving process, with the software recalibrating the ranking based on new, incoming data.

There are several software major innovation management software companies that provide this service, including Brightidea and Spigit. Within each company’s software suites there are customized reputation management modules. In Brightidea’s case, each employee’s reputation is based on an in-depth point scheme. Employees earn these points by participating in voting and collaboration sessions, where ideas are both critiqued and improved upon by the larger user community. Employees who perform exceptionally well by consistently voting for ‘good’ ideas, or earn a significant number of points by always being helpful in collaborative efforts, earn points. The more points they earn, the higher their reputation ranking, which draws attention within the framework of the reputation management module. These individuals are singled out for either recognition or reward by senior management. Spigit’s process is similar, although it emphasizes an slightly more opaque approach, providing management with more discretion as to how individuals may earn higher status within the reputation management system.

Reputation management can also be bought as a separate service to enhance the online reputation of a company. An example is British Petroleum, which after the 2010 oil spill in the Gulf of Mexico aggressively worked to make sure that positive articles about the company and its efforts to clean up the spill would appear when a user typed in keywords relating to the spill into global search engines. While this service was folded into a larger public relations campaign, the technology that powered the service is a perfect example of reputation management.

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Large online businesses provide a ‘free’ version of reputation management. ‘Free’ is in quotes in this context because the service often requires the user to pay a fee to use the service itself; the reputation management aspect of that service does not cost anything. An example is eBay, where users can rank other users based on their responsiveness and general conduct during a transaction.

Benefits and Drawbacks

Reputation rankings play a huge role in the amount of power any one person or group has in influencing a process. Prior to the advent of this technology, a person’s presence online or within a computerized software suite had an importance ratio of 1:1; in other words, that person’s commentary had the same weight as any other user. The corresponding clutter of ideas, both good and bad, led to the need for a hierarchy and a cleaner organizational format.

The increasing popularity of reputation management software has both benefits and drawbacks. Reputation management can help identify leaders and thoughtful individuals who have a worthwhile contribution to make out of a sea of literally billions of opinions. Unfortunately, reputation management can also create artificial barriers to innovation and an inaccurate reflection of reality. On the positive side, singling out exceptionally savvy individuals helps advance both the career of that individual and the prosperity of the organization or community in which they are participating. However, on the negative side, reputation rankings can shut out slightly more unusual ideas that may lead to improved processes, especially if those ideas originate from an individual with a low or nominal reputation score.

As with any business, those who control reputation management must be vigilant, and open to frequently changing or updating how reputations are tallied. Individuals who attempt to “game” the system by illegitimately inflating their ratings must be screened out; likewise, those who are hesitant to participate must be encouraged to contribute.

By Peter Marino

Peter Marino is the Senior Partner and CMO of reelWebDesign.com a search and social media marketing company in NYC.