Managing Reputation - Inoculating Against Crisis

Kate Nicholas, Consultant

It was Warren Buffet who once said “It takes twenty years to build a reputation and five minutes to ruin it” – a statement that resonates more today than ever before; except these days when a damaging social media post can travel the world in a click of a mouse, it can only take five seconds. It was Buffet’s contention that “If you think about that, you’ll do things differently,” but many senior leaders still prefer to bury their heads in the sand rather than facing some of the uncomfortable truths about their organisations that may be lying in wait to publicly trip them up.

All too often reputation only becomes an issue for the board and senior leadership team when something actually goes wrong, and the organisation faces a full-blown crisis. When this happens leaders find themselves in the strategic equivalent of a hospital’s Intensive Care Unit, desperately trying to prevent the spread of infection.

But this doesn’t have to be the case. In fact, if reputation is taken seriously - as part of strategy development and business planning - you can do a great deal to inoculate yourself against potential crisis, providing protection for one of your most valuable assets.

According to the 2017 Reputation Dividend Report, the value of reputation to the UK economy is now almost £1 trillion – more than the entire gross domestic product of Australia. According to this survey, corporate reputation now accounts for more than 39% of shareholder value – and that figure has almost doubled in the last ten years. At the same time fallout from reputational damage now represents one of the foremost strategic risks for corporates.

And what is true for FTSE companies is doubly so for charities and not-for-profits, for whom public engagement is key and who, as recipients of public and government funding, are coming under ever increasing scrutiny around how they both raise and spend funds.

Whereas a good reputation was once seen as the icing on the cake, it has now become a vital ingredient when thinking about strategy. In today’s networked society, anyone can broadcast their views about your organisation and, in a climate where peer to peer influencing is increasingly critical, negative views can fast get traction, undermining your brand. The harsh reality is that you if you do not make managing your reputation a strategic priority, others will.

However, when managed well, your reputation will be one of your hardest working assets. A strong reputation engenders trust and can bring direct benefits in terms of the ability to recruit and retain talent, increased influence with government and other partners, more effective marketing/fundraising activity as well as improved favourability in media and social media. A reputation strategically built over time also increases the likelihood that the organisation will be given the benefit of the doubt by key stakeholders if you do find yourself facing a crisis.

So, what can you do to inoculate your organisation?  You can begin by recognizing that reputation is a board-level issue that needs to be visibly owned by the CEO and senior leadership team, who in turn need to recognize that in today’s connected society, communication is a way of operating and not just a professional function. Listening needs to be built into the heart of your operations and strategic planning, together with a willingness to take on board and respond to the climate of public opinion.

Strong reputations are also built from the inside out, your staff are some of your most powerful ambassadors and it is essential that they have a shared understand and belief in the integrity and value of your offering and operations. Your reputation also depends on the relationship between your brand promise and customer experience - if you are promising more than you are delivering, your reputation is in danger. Of course, you need a good crisis plan, but if you are willing to address some of these issues in advance, it is far less likely that your organisation will end up in intensive care.

Kate Nicholas is a management and communications consultant. Formerly Editor-in-Chief of PRWeek and Global Communications Chief for World Vision International, Kate comes alongside senior leaders to help with strategy development and change, communications reviews and organizational storytelling. If you would like to explore how Kate can help your organisation, you can contact her via office@actionplanning.co.uk.