Reputational Incident? Don’t Default To Crisis

Companies would do better investing in good products and service, solid intellectual property, and employee quality, ethics, training, and conditions than in PR disaster planning and plotting and reactive campaigns.

C-teams should pick their battles in many contexts and reputational risk is one of them. C-teams should be careful not to prolong and deepen a transitory reputational incident into full-blown crisis but focus on doing good and performing well while reserving their bench strength for real problems.

Brands of good companies are, in fact, resilient. Every company has reputational incidents, whether social media idiocy committed by low level workers or major safety disasters such as those of Asiana, Boeing, and Toyota. Most reputational incidents, such the fast food chains’ experiences, are self-limiting and, these days, result in more ego-driven swivet in the C-suite than actual threat.

Keeping a company’s trade secrets secret will yield more real returns in market-leading innovation, competitive advantage, and persistent excellence of brand than will hitting a reputational incident and immediately defaulting to crisis and brand triage. As successful and troubled companies have found, employees very much own or control a company’s brand, most obviously in social media exposure, but fundamentally in how well they execute the company’s business model, from C-suite to coding, cooking, or simply coping. when a brand takes a hit because of the egregiously bad behavior of employees in one location or one silo, it then springs back because customers are driven by the company’s real world product and service and not mere brand. That is, brand springs back if the company is fundamentally sound, products good, and service reliable.

Social media have become a lens through which not just customers but the supply chain and government agencies from the National Labor Relations Board to the SEC keep tabs on company action, ethics, reaction, and now even disclosure. Companies may win the battle but won’t win the war if their overblown reactions to trivial incidents invite even more scrutiny and cross-reaction than the original incidents would have normally triggered. Companies may win the battle but won’t win the war if their overblown reactions to trivial incidents are cited far into the future as examples of successful PR fixes of brand disasters. Essentially trivial incidents would have been forgotten in weeks had they not been singled out, honored, and archived in magazines, textbooks, and videos —for posterity.

Risk management and oversight must keep brand and reputational risk in perspective, crediting the company for the real world quality of its products and services as larger than an isolated incident and crediting the company’s customers with the intelligence and compassion to recognize the distinction.

© 2013 S. Caroline Schroder. All rights reserved.
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