Why you should give a damn about your reputation

Why you should give a damn about your reputation

What do you think of when you read the names Exxon, Facebook or Astrazeneca?

Reputation management is relevant to all businesses and organisations. 85 of customers use the internet to research before making a purchase, and 86 per cent will pay more for a service or product from an organisation with a better reputation.

A good reputation is an important asset – the past few years has seen a rising trend of customers and clients that prefer to engage with brands that align with their values.

The impacts of a bad reputation are undeniable – 25 per cent of organisations impacted by severe reputational harm lost over $10 million, according to a study of Australian organisations in a ten-year period.

And when 1 in 4 companies don’t financially or reputationally recover from a severe crisis, organisations need to consider reputational management and crisis communications to be vital to their ongoing sustainability

In this edition of 47, we explore how can organisations best navigate the world of strategic communications.

Maintain a strong reputation

One way to stem the tide of issues that cause reputational harm is to already have a strong reputational base to work from.

Abraham Lincoln said that if “character is like a tree, and his reputation like its shadow; the shadow is what we think of it; the tree is the real thing.”

This means the relationship between an organisation’s culture and how it is perceived is inherently interconnected, and it’s important to know the “shadow” that an organisation casts.

Key to actively managing an organisation’s reputation is to:

  • assess what its reputational standing is already
  • know who the stakeholders are and segment them
  • define a desired reputation
  • identify the best methods of reaching stakeholders and the platforms where stakeholders receive information
  • communicate consistently and clearly
  • engage your people, people are your largest reputational asset.

Doing this homework to understand the sentiment toward your organisation and how it is perceived should inform any communications strategies – something that the New York City Police Department learned the hard way.

Remember too that good reputation stems from authenticity. Your reputation should ideally reflect your best attributes. Consider where your organisation naturally shines and showcase it in your communications.

When an organisation doesn’t match its reputation or deliver on its promises often lies at heart of reputational issues (the reputation–reality gap) – clients and customers notice the dissonance, and once trust is lost it can be difficult to regain.

Manage online presence

It’s now commonplace for organisations to have social media accounts to better connect with their community. It’s no secret that social media is a powerful avenue to build upon an organisation’s reputation.

It is equally as important for organisations to understand what their customers, clients and broader public have to say about them online.

The internet is littered with examples about how social media turn an unwelcome spotlight on an organisation.

For example, a Melbourne restaurant was recently dragged into the media spotlight when white supremacists celebrated Hitler’s birthday at their venue and this group were later posted images of them saluting online. A few weeks later it was covered by a prominent media outlet, slanted in a way that made it unclear whether the restaurant allowed this celebration to occur.

The restaurant took to their Facebook page to clarify that the restaurant had no knowledge of the party until late in the evening, detailing their version of events with a statement from the Managing Director. The statement clarified that the restaurant became aware of the intentions of the group only toward the end of evening and staff called police for further advice on how to situation. The statement from the owner condemned the group and their views, while announcing the management team’s decision to donate the takings from the group to a local charity.

The restaurant’s post was included in media follow ups and received a positive response from social media commenters.

While some issues, like those involving a court course, are likely to move into the public domain regardless, social media often amplifies potential issues or rumours that might otherwise be handled privately or internally. These potential issues can quickly evolve into online outrage and cause reputational harm if not identified and appropriately managed.

One way to mitigate issues is to set expectations clearly from the outset. Organisations should have a code of conducts in place for customers and for employees should be easily available on the website, posted on the walls and included in internal newsletters. In addition, the expectations outlined in your employee social media policy should communicated regularly.

It’s also useful to be aware of potential issues as they arise – there are a few ways to monitor an organisation’s online presence. One simple avenue is to set up Google alerts to find out when your organisation is mentioned online, or you can engage a more sophisticated paid monitoring service.

In the case of the restaurant, while the reputational harm was mitigated by a prompt response to the article that clarified the restaurant’s position, a proactive approach when management was informed photos were taken and subsequently posted online would have meant the restaurant could have controlled the narrative, rather than run the risk of being associated with people and values that do not align to the organisation.

Be prepared

When it comes to protecting reputation, it’s crucial to be proactive.

Understanding the issues that other organisations specific to your industry face is another critical first step. Stay in the loop about the recurring issues organisations face across Australia and overseas.

When planning, also remember that you cannot deal with all issues at once, so it’s useful to prioritise issues by the likelihood they will occur. As a starting point, discuss how past issues were handled and what learnings can be drawn from those experiences.

Once these issues have been identified, map out all the potential scenarios and create plans ahead of time. For the majority of issues, a plan can be a touchstone for leadership staff when issues arise.

Sometimes what causes the most reputational harm is not the inciting incident itself ­– the public knows that mistakes can happen – but how compassionately and competently an incident is dealt with afterwards.

US company United Airlines discovered this when after a passenger was dragged off a plan, the company released a lacklustre initial statement followed by an email to employees that calling a passenger “disruptive and belligerent”. By the time the airline had released a more conciliatory statement, the reputational damage had already been done.

Which underscores the importance of stakeholders who too often go overlooked ­– employees and their families. Strong internal governance and taking employee complaints seriously can mitigate significant reputational damage.

And when thinking about stakeholder relations and the impact of an issue on people, internal communications are just as critical as external ones.

Working from an already established plan of action also lessens the potential for missteps and can make the difference between squashing a story or media outlets continually running it — keeping it uppermost on people’s minds and google searches.

The key is to understand the issues that your organisation faces and to manage them proactively. For any organisation, the single most important strategy is to identify potential issues early and take proactive steps at the senior executive level to stop them becoming crises.

Seek advice as soon as possible

The main priority for organisations is to ensure business as usual.

When practising effective crisis communications, the goal is to always be prepared. This requires organisations to understand the issues the face and to have a crisis communications plan in place.

A small issue can also be exacerbated the longer it goes unaddressed. The more time passes, the more likely that an issue or potential issue will grow into a larger crisis that is more difficult to manage.

Engaging an agency like Pesel & Carr that specialises in crisis communications early provides an external independent eye and additional experienced support, meaning the issue has a far greater opportunity to resolved positively.

Contact us for a consultation about how your organisation can best manage its strategic communications.