How Best a Business Can Manage Its Reputation in This Disruptive World
• By a Correspondent
“It takes 20 years to build a reputation and five minutes to ruin it.”
If you think about that, you’ll do things differently,” says US tycoon Warren Edward Buffet.
Therefore, businesses need to be very careful how they manage their reputation in this fast-changing world, where the media is no longer the exclusive territory of publishers or broadcasters, but has become everyone’s responsibility.
When the media landscape changes, thanks to technology, the world witnesses the creation of new opportunities, powers, behaviours and brands.
This disruption therefore leads to new thinking, ideas, behaviour, expectations and demands.
All these changes provide companies with a greater opportunity to get their messages across, but also exposes them to more risks.
Go global at own risk
The reality is that no matter how regional, or insignificant, any and all issues can easily go global. These can range from factors such as cyber-attacks and natural disasters, to organisation and brand specific events such as product failures, management misconduct and financial performance.
This means that any crisis can be more damaging if not handled correctly. News about a crisis can spread like wildfire and can have a devastating, long term negative effect on the value of an organisation.
In this environment, a crisis should no longer be seen as simply a public relations issue, as it can have a massive impact on the overall performance of a company. For example, following the BP Deepwater oil spill (that took place between April 19 2010 and June 25 2010) the company’s share price fell 55%. To date, it has yet to recover to pre-crisis levels.
The BP crisis is not an isolated event either. According to a recent global MSLGROUP study, 53% of companies impacted by a reputation disaster will not have recovered to their pre-crisis share price after 1 year. The study also showed that 83% of companies will face a crisis that will negatively impact their share price between 20-30%, during the next five years.
Do you have a crisis, reputation management?
The reality is that unfortunately, many companies do not have crisis and reputation management protocols in place that are suitable in today’s communications landscape. Without a proper plan in place, the battle for many companies is lost before it has even begun.
It is therefore critical that companies understand and implement a crisis and reputation management strategy that includes the following basic elements:
Information flows too quickly to wait for disaster to strike before planning. Risk scenarios have always been important but are at a premium now.
To be properly equipped to handle any crisis, it is important to prepare as much as possible ahead of time – including mapping out possible scenarios, drafting provisional media statements, etc.
Many companies also fail to identify and build relationships with the key influencers who they could reach out to during times of crisis and who they could use to communicate their messages via their channels of communication. A company can’t wait until the midst of a crisis to begin developing the relationships that will help see a brand through it.
Crisis feeds on chaos. Businesses need to ensure that they have a playbook in place, which includes contact information for all of the people in their universe/supply chain, crisis team roles and responsibilities, step-by-step protocols and sign off processes, etc.
A brand needs to be able to communicate quickly with all stakeholders using multiple channels and communications platforms. It is therefore crucial to understand what platforms you have available in order to engage with stakeholders and communicate your messages.
Many companies are still not active on social media or even have a system in place to monitor the conversations that are taking place on these platforms.
This means they are unable to directly participate and inform the people who potentially could be talking about an issue. This is simply not acceptable in today’s landscape.
Crisis simulation offers a valuable way for the management and the Investor Relations teams to practice handling a sudden crisis with wide ranging consequences for a company’s reputation and market value.
One of the biggest mistakes companies make is not understanding the way people communicate with each other, or how they access their information. This doesn’t mean that a company has to say much in a crisis, but they need to show that they are dealing with it.
In communicating to the various stakeholders, it has become increasingly important to do so using media rich content, including videos, images, podcasts and infographics. Just as crucial as the ability to ensure quick and seamless distribution of this content to stakeholders.
The reality is that the world around us is changing – with or without you. If, like me, you believe the number one priority of every marketer, CEO and senior executive is to protect the reputation of their organisation, then ensuring you are prepared and equipped to manage a crisis in today’s world should be high on your agenda for 2016.