Is your corporate reputation future proof?

Jon Clements, Partner – Staniforth PR

The self-inflicted reputation meltdowns of the past two years in the offshore, automotive and aerospace industries have made the chemical industry appear a comparatively crisis-fee zone. 

But could the calamities that afflicted BP, Toyota and Rolls Royce happen here too? 

In each of the above cases, the issues that led to plummeting share prices, public and media vilification and tarnished images were not those one would normally associate with companies having global reputations for excellence. 

Building a solid and enduring reputation begins at the coal face of a company and relies on striving for the highest quality processes and performance in its core business; not even the most sophisticated or expensive marketing campaign or public relations onslaught can compensate for a business badly run.  

But both failing and thriving businesses alike can find themselves in the spotlight for the wrong reasons – and the way they behave when the curtains are pulled back can be the difference between recovering reputation now or at some point in the distant future. 

A study by the Chemical Industries Association in 2007 highlighted that the cost of reputation loss could be counted in pounds and pence (lots of them), including the financial impact of moving a manufacturing facility or lost revenue in a business sale. 

At the time, the study concluded that the industry’s reputation was comparatively stable but still vulnerable to “events, media stories, failure to engage” and facing the public’s continuing distrust. 

The world has changed in the ensuing years and new mechanisms have emerged which threaten commercial operations reckless of their reputation capital. 

The internet has evolved into “Web 2.0”, in which previously invisible and voiceless internet users have developed and embraced the power of self-publishing, allowing ungoverned and uncontrolled sharing of information online in blogs and on social media platforms such as Twitter and Facebook. Several major companies have already experienced the bitter chill of a social media wind blowing against their corporate behaviour - which the mainstream media and public might otherwise have ignored. 

And the international phenomenon, Wikileaks – already shredding the reputations of politicians worldwide – is poised to take its exposé campaign to the corporate world. The mere rumour that it holds a hard drive of information about Bank of America caused that firm’s stock to fall by 3%. 

So, while the chemical industry may be enjoying a period of relative calm in the battle for public hearts and minds, it’s no reason to be complacent. 

Building and maintaining the trust of all organisational stakeholders is essential – and not only when a crisis hits. In fact, the latest Trust Barometer survey produced by international PR company, Edelman, shows that when a company is trusted, only 25% of people will believe negative news about it after hearing the news once or twice. The figure for distrusted companies is more than double that amount. 

The way an organisation maintains, monitors and protects its reputation is a company-wide responsibility with a variety of essential elements, which include:  

  • Create an open culture and willingness to engage with the media and other external audiences. A reputation for transparency helps in obtaining the benefit of the doubt in bad times. 
  • Have a system for listening to chat about your business or sector, whether on or offline.  
  • Seek to build links and create understanding among your audiences by explaining what your business does and why it matters. Brunner Mond’s interaction with local schools is good example of this.
  • If your company has messed up, admit it and apologise – at the earliest opportunity – and be specific about remedial measures.
  •  Reject outright the concept of “spin” – the media and online community like nothing more than dissecting any attempt to cover up or deflect wrongdoing.
  •  Have a crisis plan in place which ensures all departments are able to co-operate quickly and effectively in communicating facts to the outside world.
  •  Prepare the managing director or CEO to face the music. The public demands that the buck stops with someone who has the authority to put the problem right.

Respected reputation commentator, Leslie Gaines-Ross, estimates that a broken corporate reputation can take, on average, four years to repair.

Isn’t business difficult enough without that job filling up the in-tray?

www.staniforth.co.uk