In a B2B News online reader poll, 45 of 50 voters, or 90%, agreed that most business awards are a marketing exercise. It’s an unscientific poll. The organisers’ own rules suggest the honest answer depends on which award you’re looking at.
Some marketing value is built in, and organisers say so. The Waikato Chamber of Commerce lists publicity and a better reputation with customers among the benefits of entering its Business Awards, next to judges’ feedback and a structured look at your own business. The real test is whether the recognition is earned through independent judging or simply bought.
Three ways awards are run
The New Zealand Hi-Tech Awards cost nothing to enter, and the Hi-Tech Trust that runs them says sponsors and supporters cover the cost. Six local judges shortlist up to six finalists per category from the written entries. Finalists then get 30 minutes face to face with the panel, which is joined by an international judge for the final decision.
Judges there sign non-disclosure agreements and must declare conflicts of interest before seeing entries. Free entry isn’t the whole bill, though. Gala dinner seats for entrants cost $380 plus GST each, and the trust lists professional entry writers who charge for their help.
The Waikato Business Awards charge $199 plus GST for a first main-category entry and $99 plus GST for each extra one, and you don’t need to be a chamber member. Judges shortlist from written entries, then visit finalists’ businesses or interview individual and small business entrants. Every entrant gets feedback from the judges.
The Deloitte Top 200 Awards work the other way round. For most categories there’s nothing to enter, because an independent judging panel nominates and interviews the finalists. Company of the Year is judged on financial and non-financial measures, including reputation and environmental and people management.
Deloitte’s finalists also have to declare any investigations or litigation, and consent to background checks. The Young Executive of the Year award is one exception to the nomination model, taking one application per organisation, endorsed by a senior leader.
What a win is worth
The research cuts both ways. A 1997 study in Management Science by Kevin Hendricks and Vinod Singhal compared US firms that won quality awards with similar firms that didn’t. Over 10 years, from six years before the first win to three years after, the median change in the winners’ operating income was 48% higher than the control group’s.
The study used the awards as a stand-in for well-run quality programmes, so it measured the work behind the trophy rather than the trophy itself. A 2009 study in the Quarterly Journal of Economics, by Ulrike Malmendier and Geoffrey Tate, found the reverse for US chief executives who won prestigious business press awards.
Their firms went on to underperform, while the award-winning chief executives took more pay and spent more time on outside activities such as board seats and writing books. An award can confirm good work. It doesn’t do the work.
Questions to ask before paying
Who judges, and are they independent of the organiser and the sponsors? A credible award names its judges or at least its judging process, and says how it handles conflicts of interest.
Are the criteria published before you enter? Ask whether you’ll get written feedback, because that’s often the most useful thing a business takes away.
What’s the full cost? Add the entry fee, any finalist fee, dinner tickets, an entry writer if you use one, and the staff time to write the entry and host a site visit.
Do you have to pay to accept a win or use the winner’s logo? A fee charged after you’ve been told you won is a warning sign.
How many entrants are in your category, and is the winner chosen by public vote? A category with three entries says less than one with 30, and a people’s choice result measures reach more than quality.
Finally, who do you want to notice? A win your customers have never heard of may still be worth it for staff morale or a hiring push, as long as you know that’s what you’re paying for.
One piece of the Hi-Tech Awards’ advice to entrants applies to any award. The most common mistake, it says, is not answering the question that was asked, because judges can only score what’s in the entry.
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