Tuesday, September 24, 2013

The Squander of a Reputation

The adage that it takes a lifetime to create a good reputation, but only a second to squander it is by now rather a platitude than a clever insight. And yet, it seems that we all too often forget this truism, especially if under the influence of short-term profitability.
At a recent conference of the Swiss Association for Quality there was much talk about the reputation of Switzerland – especially “Swissness” - as it relates to the quality of the products and services offered by Swiss companies and organizations. The problem Switzerland faces is that it’s “brand” – the Swiss Cross and the wording “Swiss” -  is increasingly misused by foreign companies for financial gain. It is estimated that customers are willing to pay an average premium of roughly 20% for goods with a “Swiss” brand, although the gamut ranges from 1-2% for the machine industry to 50% for luxury goods such as watches. As these percentages make evident, the favorable reputation of Switzerland translates into very concrete economic returns.
According to a world-wide assessment by the Nation Brand Index, however, the brand “Swiss” lost quite precipitously in value these past years, from being the number 2 in the world in 2005, to coming in only at number 9 in 2001. Part of the reason for the image damage has to do with the fact that a number of firms have taken advantage of the above elucidated value premium even though they have absolutely nothing to do with Switzerland, or then only in a limited fashion. The most egregious example of this is the BelSwissBank (http://www.bsb.by/en/) which features both the Swiss cross as part of its logo and its name, even though it is headquartered and operated entirely in Belarus!
Such examples of misuse of the Swiss brand are, however, only part of the reason for a steady erosion of the Swiss brand. It was interesting to note that several exponents of the Swiss industrial and added-value manufacturing sector, as well as the deputy head of the Swiss Federal Institute of Intellectual Property, clearly pointed to the continuous negative publicity that Switzerland receives abroad in conjunction with its taxation practices and banking sector. Instead of thinking about perfectionist watch-makers or hi-tech machine manufacturers, Switzerland is increasingly perceived abroad first and foremost through the prism of having long played a smooth zero-sum game of hiding the money of foreign tax evaders and creating tax havens for high net-worth individuals and multinational corporations. That, clearly, is not a particularly good way to cultivate your friendships with other nations, nor is it conducive to the “brand” of Switzerland.
Having lived and worked in a number of different countries, it is my experience that “Swiss quality” – although hardly perfect and de facto necessarily always the best – does nevertheless have some reality to it. The Swiss virtues of reliability, conscientiousness, attention to detail, perfectionism and superb organizational and planning skills, do translate into a merited good reputation in its products and services. This hard earned good reputation, however, stands to be squandered today, due both to free-loaders of the brand “Swiss” and the persistent negative media attention Switzerland gets abroad in conjunction to its banking and taxation schemes.
Manuel Dawson

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