“It takes 20 years to build a reputation and five minutes to ruin it,” Warren Buffett once said. “If you think about that, you’ll do things differently.”
If you really think about the first part of that statement, it can cause your palms to sweat as you visualize the daunting reality of working in an economy in which reputation makes or breaks your company. But in the second part of the quote, there’s an opportunity.
Sometimes companies have to feel the impact of a sudden or smoldering crisis to justify making changes in the way they do business. Though the focus of this article is reclaiming your reputation after a crisis, ideally companies will make changes before a crisis, by focusing at a deeper level on reputational risk assessment and management. This kind of preventative work could certainly save you the pain of rebuilding a reputation that took years to develop.
What is reputation, anyway?
The Reputation Institute defines reputation as the overall esteem in which observers hold an organization. Co-founder and Chairman Charles Fombrun says reputations are perceptions that are constructed through social interactions. Through its process of measuring reputations, the Reputation Institute further highlights seven core dimensions that make up a reputation: products and services, innovation, workplace, governance, citizenship, leadership, and performance. Communicators have the opportunity to guide reputation by developing the storylines and choreographing many of the interactions around each of these dimensions, and by publicizing the attributes their stakeholders expect.
Is the reputation you’ve established among observers an accurate reflection of how your organization actually operates? Do you spend more time and money working on your organization’s image and branding than on the authenticity of what is inside? To guide reputation, knowing how your organization lives up to its promises is key.
Reclaiming something you don’t own
There are many steps a company should take after a crisis, both tactically and strategically, to begin repairing its image. In a company’s crisis management plan, you will often find tactical steps that help to manage the issues at hand, but are focused merely on the short term. Managing and regaining the opportunity to guide reputation once again is a long-term strategic undertaking that will feel more like a marathon than a sprint.
Though strategic organizational changes might not be in the hands of communicators, I recommend four strategic moves that can have significant communication implications for guiding your company down the path of reclaiming its reputation.
1. Create a culture of communication.
A vital part of creating a culture of communication requires breaking down the communication silos that exist in many companies, or preventing them from developing in rapidly growing mid-sized companies. You can start by breaking down—or by never building—the wall between internal and external communication. Encourage leadership to communicate honestly and frequently about the state of the company and the competitive environment. And remember, if employees can’t communicate the organization’s vision, they can’t execute it.
Ford Motor Company CEO Alan Mulally is an example of a leader who has created a culture of communication within his organization, down to the operational level. He instituted weekly business plan reviews where he requires his direct reports to provide updates with an emphasis on problems, cautions or progress. In a recent article in Business Week, Mulally says, "You can't manage a secret. When you do this every week, you can't hide."
The business plan review meetings give his entire leadership team open, honest and frequent opportunities to flag issues that could cause operational and, potentially, reputational risks to the company. But to maintain success, Mulally and other CEOs like him have to work to make sure this communication filters throughout the company to employees and stakeholders alike. This is where communicators must take the lead.
2. Adjust alignment.
How aligned are your employees with management? How about your management with stakeholders?
After a crisis, alignment of leadership’s vision, employee culture and stakeholders’ images of your company is likely to be out of whack. Alignment is important to reputation because as the perceptions of employees, leadership and stakeholders drift apart, reputation equity is disrupted and becomes difficult to repair.
Successful communication flows both ways. Strategically communicating operational changes is key, but listening to what stakeholders and employees are saying also provides invaluable information for leadership. Once again, communication leaders serve as a guide to help management realign.
3. Communicate reality.
The year 2010 was littered with stories of corporate crises, like the BP oil spill, in which the marketing and public relations storylines were fantasy compared to the realities of what was going on inside the company. As marketing and PR leaders, it is our job to make our companies appear appealing to our stakeholders, creating storylines that engage people, sell products and increase stock prices. But last year showed that there is a price to pay when a company is not operationally singing from the same sheet of music.
We are in a new world where it is hard to hide the truth. According to the 2011 Edelman Trust Barometer Study, 65 percent of the public cites “transparent and honest business practices,” along with “company I can trust,” as important factors to corporate reputation, only slightly behind “high quality products or services” at 69 percent. After a crisis, stakeholders can be jaded and untrusting, and they will be looking deep for the authenticity behind what you say. If we make promises through our communication, we have to deliver on them operationally.
4. Be a good citizen.
Companies that have a heart at their core have an advantage when it comes to building or reclaiming reputation. Community engagement and social responsibility also feed into other reputational elements mentioned above, such as workplace, leadership, innovation and performance. Finding a way to give back as a company can help you create a culture of communication within your organization, which will likely have a positive impact on your bottom line as everyone starts to feel like part of a team. No company is too small or too large to have citizenship at the core of what it does.
Is your company ready to do things differently? Your organization should not have to face a crisis to find motivation for making strategic changes. As communicators, are you ready to take on your leadership role?
Bonnie Caver leads Caver Public Relations, a virtual strategic communication and reputation management firm in Austin, Texas. Caver Public Relations has a diverse global client base, focused primarily on mid-level companies that are experiencing rapid growth. She is a crisis manager certified through the Institute of Crisis Management and is also certified in reputation management through the Reputation Institute. Contact her at bonnie@caverpr.com or on Twitter at @bonniecaver. |
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