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The Importance of Corporate Reputation Management

Smart organizations today undertake all reasonable actions to manage risk. There are safety and security protocols, maintenance requirements, monitoring and diagnostics, quality control, regulatory standards and more. In spite of preventive measures, at some point, all organizations will likely endure the harsh reality of Murphy’s Law: “If anything can go wrong, it will.”

Even with this seemingly inevitable possibility, few prepare for managing the potential long-term repercussions a crisis – or perceived crisis – can have on their organization’s reputation. Damaged reputations can affect relationships with customers and clients, regulators and investors, as well as the ability to win new business, and attract and retain employees.

“Most companies today don’t mishandle crisis, they mishandle peacetime,” said Richard Levick, President and CEO of Levick Strategic Communications, an international communications agency specializing in crisis support and reputation management.

Preparation is essential for managing actual and potential crisis situations in a timely manner. Today, information is disseminated at blinding speeds through social networks and online media. The information age has changed how organizations must communicate with key stakeholders and how fast communications need to happen.

“Today’s leaders need to ask, ‘If something happened, could we respond within 30 minutes?’ If the answer is no, then you are not prepared for a crisis,” said Merrie Spaeth, who served as U.S. President Ronald Reagan’s Media Relations Director and is currently the President of Spaeth Communications, Inc., a Dallas-based consulting firm specializing in strategic communications for local, national and global companies.

 

How Communication Has Changed

How to effectively communicate during a crisis has changed significantly during the past decade. Before, a well-trained spokesperson armed with key messages could respond to press inquiries – and perhaps hold press conferences as needed – and reasonably expect to reach a large portion of their target audience. Communication was one-way.

Effective communication with today’s stakeholders is two-way. Someone needs to be listening, responding and reaching out to customers in today’s environment. For example, in the past, publicly traded companies primarily needed to work with institutional and activist shareholders to control messages and manage their reputation with this important audience. “Now we have sites like Wikinvest where small, but vocal, shareholders co-mingle with large shareholders and can have considerable influence,” said Levick.

“Technology has democratized dissent. Anyone with a cell phone can complain and rally others,” said Spaeth.

Bloggers and individuals with a large Twitter following are as influential today as broadcast news and print media – and may be actually more influential (see Figure 1 below). In an age when anyone can publish anything, companies not only need to monitor, they need to build their own influence in these forums. Think of the age-old adage, “If a tree falls in the woods and no one is around to hear it, does it make a sound?” Now think of your social media presence – if you try to correct a rumor on Twitter, but no one follows you, will your tweet be seen and remembered?

“Boards of Directors view social media as a tactic,” said Levick. “Social media is oxygen, and it is revolutionary. Your employees and your customers can be your best brand ambassadors. So, how are you using social media to build a brand following? What is it that people love about your organization? How are you using these attributes to build social media following? Companies need to build followers so they can communicate with them during a crisis.”

Leading Versus Reacting

The critical first step in any incident response is to determine whether the event could become an emergency or crisis, and therefore a threat to the company’s reputation. While both ongoing issues and sudden emergencies have the potential to become a crisis, if properly handled, they need not escalate to the point where a company’s brand or relationships suffer. In fact, if handled well, the situation can work to elevate the good reputation of a brand.

“Our clients have told us, ‘It’s not that things happen, it’s how you respond that sets you apart,” said Carl Petz, Associate Vice President of Global Marketing & Communications for Black & Veatch. “Any organization will benefit from a reputation management program that encourages employees to identify and share challenges as early as possible. Sharing information also opens up the door to identify successes that can further enhance your brand and reputation.”

In order to identify issues before each escalates to critical levels, reputation management, crisis training and education must be an ongoing business process.

“Most people never get further than crisis training, which is like going to the gym on January 1,” said Levick. Crisis preparation needs to be built into your brand and business processes. The information age represents a new world for communications and a new way of preparing for crisis, he says.

To do this, company leaders need to establish their communications philosophy and then develop an influence model that drives how you communicate with different audiences on an ongoing basis, explained Spaeth. “Understand who your stakeholders are and how to reach them.” The influence model, Spaeth says, is critical for developing competing messages before a crisis happens – messages that can counter the negative headlines.

“As a leader in your organization, ask yourself, ‘What are things that can go wrong? And, what can we do to produce images that compete with or counter those risks?’” Spaeth said.

Search Engine Optimization (SEO), for example, should be used to help counter negative messages, but it takes time to build and requires continuous effort to maintain. Building SEO around positive images, video, articles and other mediums is important, particularly when a crisis happens. When clients, customers, employees and investors search for your company online, will they only see negative images and reports? You need to make sure the positive attributes are part of the mix, too.

Competing messages to potential risk areas include video of linemen working to restore power after a storm, or safety and maintenance activities that are visually compelling, such as “PIGging” (Pipeline Inspection Gauge) a natural gas pipeline or repairing water mains. Other areas include news reports of community service activities; published articles by employees that showcase thought leadership and capability; news releases of successful project implementation and more.

“Most companies look at risk as a check list,” said Levick. “You can take your Enterprise Risk Management and put it over SEO and Marketing to see potential challenges on the horizon.” Levick used the example of how search engine returns for the term “hydraulic fracturing,” have changed during the past six months. What used to be mostly how-to articles are being replaced by legal challenges and investigative reports.

Potential areas of risk can be identified by using SEO with Enterprise Risk Management. “Companies have access to a crystal ball, but most don’t use it,” he said.

Both Levick and Spaeth agree that the structure and makeup of a company’s reputation management team should be updated to include brand and communications leadership, if it doesn’t already. “A crisis is brand acceleration in reverse,” said Levick. “The people who best understand how a crisis situation will affect your company’s brand and reputation are the brand and communications group. They need to be a part of the crisis conversations.”

Need for Speed

In the event of a crisis, companies must respond quickly to get their own messages and competing headlines disseminated to important stakeholders, such as influential traditional and emerging media representatives, customers, investors, regulators and government officials.

“Timeframes have collapsed,” said Spaeth. “Whether or not it is a negative blog comment or a true emergency, companies must get their aspirational headline out within 30 minutes of the incident.”

The aspirational headline represents a company’s simplest message and is related to a core value, such as “safety is our top priority.” The planning and continuous education process for your company’s reputation management plan should include these types of messages and information on how and when each should be used.

“It is not possible to wait for ‘all of the facts’ anymore,” Spaeth continued, acknowledging this is a shift from standard operating procedure for many. “Which is why we need to do our thinking ahead of time. You need to know who will deliver these messages and what channels they will go out on. Most importantly, you need an empowered and competent communications staff to make this happen.”

Subject Matter Expert
Carl Petz: PetzCF@bv.com 

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