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Deon Binneman
Reputation Management Advisor . Speaker . Seminar Leader
REPUCOMM…….BECAUSE YOUR REPUTATION MATTERS……..!
According to Wikipedia, “Best practices can also be defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.”
There are best practices for identifying and mitigating reputation risk in different types of companies as well as best practices for managing reputation as an asset. Please note that not every environment or every company is the same. Your unique environment may require different configurations in order to provide the best protection results.
If you have questions about your environment and would like some guidance on mitigating reputation risk, contact deonbin (at) icon.co.za
Like all of the intangible assets whose value has escalated in recent years (other examples are talent, knowledge, know- how and intellectual property), reputation has often been overlooked by organisations because it is so difficult to comprehend.
It is only when a reputation incident severely damages the credibility of an organisation or one of its brands, or its standing in the eyes of its stakeholders, that the potentially catastrophic consequences of not managing the crisis properly become apparent. Studies of organisations that have handled crises affecting their reputation badly have identified long term and irreparable damage to share price, market share and brand value.
The recent eye-gouging incident by the Springbok flanker, Schalk Burger is a classical example of this. Not only was he suspended for 8 weeks, but the incident itself has raised the ire of the rugby loving public and the matter was compounded by the inept handling of the media conference by the coach, Peter de Villiers about the matter.
Many organisations make the mistake of assuming that all that is needed is media training and crisis planning. However, a reputation crisis exposes to public and media scrutiny not only the organisation’s competence at crisis handling, but the values, standards and shortcomings that existed beforehand.
In this instance, The Schalk Burger affair was compounded when he only formally apologized about a week after the incident.
While crisis communications largely remains a case-by-case practice, the author Laurence Barton said there are two essential immediate steps both individuals and companies should always use to control the media storm during a scandal.
1. Come clean. Issue a statement admitting to wrongdoing and accepting full responsibility (assuming the allegations are true, of course).
2. Apologize. Sincere acts of contrition can go a long way in getting back into the good graces of the public and media.
Every crisis must be handled differently, but in every crisis there should be a party accepting blame, and that party should apologize as soon as possible for being the cause of that blame. The end result – The Company’s integrity and reputation must be maintained at all cost.
Who said so: Warren Buffett and David Glass, CEO of Wall- Mart!
The problem is that apologizing does not come easily. The starting point of any reputation recovery process is a believable apology.
According to Wharton marketing professor Lisa Bolton, three key components ensure that an apology will work:
- The CEO must deliver the message,
- A solution to a problem must be outlined (Like a product recall process) and
- Some remuneration should be in place. The initial response is the most important," she says. "The general advice is to admit mistakes and try not to be defensive. Get out in front of the story. Get your admission and mitigation out there as well, and consider financial compensation. Also, customize your response in relation to the magnitude of the failure."
It is my belief that apology also goes hand in hand with the strategic communication process in any organization. For instance , if a company have not debated PRIOR to a crisis whether they are going to be open and transparent, do you think an apology will be forthcoming? (See the article Use this tool to improve transparency in your organisation in Powerlines Number 39 dated 20 November 2002).
The reputation best practice strategy should, therefore, have two simple objectives – to prevent the causes that could damage your reputation, and to minimise the impact if, despite your best endeavours, a reputation crisis should occur.
Here is a partial list of some of the best practices to consider:
- Develop ways to understand the nature of your reputation
- Design & develop a reputation risk management strategy that can act as a roadmap for strengthening risk management in particularly vulnerable areas
- Work together with PR, Risk and Compliance departments to close gaps
- Develop standards and controls for the action that the strategy places most importance on
- Learn how to proactively manage elements of reputations
- Provide reputation management training, education and communication to obtain the vital support and commitment of your employees and managers
- Design analysis and monitoring mechanisms to provide early warning of problems or crises
- Develop a process of continuous crisis assessment
- Conduct regular crisis planning and testing
- Ensure regular reporting and monitoring of reputation risk, including incident analysis, issue management, environmental forecasting and online reputation monitoring.
Some organisations have attempted part of this best practices process themselves, particularly the first few stages. In my experience, they are severely disadvantaged by being too close to the issues, or by risking avoiding taboo or politically difficult areas, or by not challenging assumptions vigorously or objectively enough.
If you would like to learn more about best practices in building, managing and protecting corporate reputation, why not attend one of our learning interventions?
What is the purpose of Corporate Governance? Compliance? Enterprise Wide Risk Management? Corporate Responsibility? Positive Company Actions and Behaviours?
In the book, the 7 Habits of Highly Successful people http://bit.ly/2gOas, Stephen Covey writes that a person should always start with the end purpose in mind.
So what is the end purpose of the questions that I just asked?
The end purpose is to be well regarded in the mind of the stakeholder, so that we can do business and achieve our goals.
If an Investor regards us in a positive manner, they will invest in our company.
If employees regard as a preferred employer, they will want to work for us. And in a business to business relationship, people will want to do business with you.
Ralph Larsen CEO Johnson & Johnson said: “Reputations reflect behavior you exhibit day in and day out through a hundred small things. The way you manage your reputation is by always thinking and trying to do the right thing every day”
So next time that you engage in your normal responsibilities as an employee, remember that the same principles applies to you. No matter the type or size of the task, always start it with the end purpose in mind.
The next time that you engage with a stakeholder, remember the end purpose.
The story today that ICASA will hold a postmortem after the regulator admitted that it made a “mistake” in trying to block Vodacom ’s R80bn listing, is a lesson in Reputation Risk management.
http://www.businessday.co.za/articles/Content.aspx?id=73764
To think that they could have prevented this negative publicity.
How?
By ensuring that senior management were trained in the strategic management of reputation and stakeholder relationships. If they were, they would have understood the interplay of contextual factors and issues, and they would have thought twice, before they made decisions, that left them embarrassed.
Now they have to go and do reputation risk root cause analysis, which is a technique that I taught last week in my Reputation Defence Master Class. Interestingly, most reputation damage incidents in companies can be prevented through training and simulation exposure.
The patterns of decision making at meeting time can have a material impact on an organization’s reputation. If you study the Ford-Firestone Tire withdrawal case, there seems to be an uncanny similarity between these two events.
In both meetings, key people were not there. This in itself should be a lesson. Who attends or does not attend a meeting should be a point of concern!
I just hope that the Regulator will address the root causes and not just superficial symptoms.
When last did you inspect your Company’s Bathrooms?
Oh, it is not my function!
Isn’t it? Do you think that something as important as that can really be outsourced to a cleaning company?
Reputation Risk is not something you can outsource, and the visual images that visitors see, can influence their impression of the company.
Very often next to the Reception area, the bathroom facilities is the first thing a visitor will go to. And, let me tell you, not all bathrooms are a place where you even want to take a child to. A Few weeks ago I made the mistake (or did the right thing) by going to the wrong bathroom facility. I went to the shop floor bathroom instead, and what I saw there was shocking.
No toilet seats, a blocked toilet, toilets in need of a desperate deep clean, broken window panes. Plan & simple, it was disgusting!
What do you think my opinion was of the management team? What do you think, I think about the company’s reputation?
In the Bible, there is a verse that basically says :’’If God cannot trust you in the small things, how on earth can he trust you in the big things’’
If reputation is about what you see, hear, feel and experience, then you’ve got it! I do not think much of them. How can I trust them in the big things, if I cannot even trust them not to violate a basic human right, i.e. The Right to Safety?
The other day I took two old-age pensioners to a Public Hospital in Roodepoort. They asked me to stop on the way at a Quick shop, because they had to buy their own toilet paper. I mean , here is two old-age pensioners, going to see the Doctor and the medical facility cannot even provide toilet paper. Is that what they think of their customers?
Worldwide companies are instituting hand washing campaigns as an initial protection measure against the spreading of swine flu (South Africa has just had its first confirmed case). How on earth is companies going to influence this, when they cannot even provide a clean and hygienic bathroom facility for employees and visitors.
Take a look at the worst example I had ever seen in my life. This is from a factory floor.
PriceWaterHouseCoopers found in one of their studies that Compliance failure is one of the leading causes of Reputation Risk. In South Africa, companies are not paying enough attention to complying with the Occupational Health & Safety Act , which contains a detailed section on Health & Hygiene.
So what can you do about this:
1. Be kind. Use your mobile phone, take pictures and send it to management and not the Media or The Department of Labour.
2. Call your Health & Safety representative and point out the conditions, so that they can report it to the Health & Safety Committee.
3. Take a good look next time when you go to the loo. Ask yourself, is this a place where a visitor can take his kid to?
To those in management, it is a time to realise that the responsibility for basic cleanliness and hygiene cannot be outsourced. Today staff and customers have camera equipped mobile phones, with which they can do damage.
After all, who wants their reputation ruined, because of a shabby loo.
Five fledglings are in the nest. Four decide to spread their wings and soar away. How many are left?
Answer: five.
Why? Because there’s a difference between deciding and doing!
Moral: Decisions are only one-half the story. It is all about execution. Check out Morita’s theory. Ever heard of him? A Japanese psychiatrist whose work is brilliant and thoughts pragmatic – IMHO! According to him action is more important than words. I agree. The general opinion is that it takes action to make a difference.
However the difficulty often lies in the desire to change. Anthony Robbins says that change can happen in an instant, but it is the time leading up to change that can take a long time. On his CD Unlimited Power he talks about the fact that Power comes from action.
Dr. Wayne Dyer narrates an interesting story about people’s desire for change.
"Alcohol is an evil beyond compare," said the preacher as he stood before a group of alcoholics.
On the platform he had what appeared to be two identical containers of clear fluid. He announced that one contained pure water and the other contained undiluted alcohol. He placed a small worm in the container filled with water and everyone watched as it swam around and headed for the side of the glass and finally crawled to the top of the glass. He then took the same worm and placed it in the container with alcohol. The worm disintegrated right before their eyes.
"There," said the preacher, "What is the moral?"
A voice promptly replied: "If you drink alcohol, you will never have worms."
Human nature generally resists change because change is uncomfortable, unpredictable, stressful and difficult. When we view change as urgent and important we will view it positively. I guess it is the same with managing reputation. It is the domain of the PR Department – isn’t it?
The following self-diagnostic is not a replacement for a comprehensive crisis audit of your organization by a qualified consultant. But it may help you determine whether it’s time to initiate one!
For scoring, see legend at the bottom. Just answer Yes or No.
- You regularly scan your socio-political and stakeholder environment (news media, Internet, consumer surveys, etc.) for possible threats to your organization’s reputation.
- You regularly scan your internal environment (union issues, corporate governance issues, etc) for possible threats to your organization’s reputation.
- You have identified the main current potential threats to your organization’s reputation (risks are threats which are at least “medium” both in terms of likelihood and seriousness).
- For each of these threats, you have prepared a “what if” scenario describing how the threat would most likely unfold, and how the organization should, ideally, respond to it, including your main communication messages to stakeholders.
- You have prepared a set of procedures which are to be followed by managers throughout the organization, should any of these threats (or some unanticipated crisis) transpire. These procedures include specific protocols such as notifications of appropriate executives.
- You have designated and trained a Crisis Communication Team which is to be convened in the event of a crisis. This may be the same people who sit on your Emergency Response Team, or another group linked to it.
- You have prepared a comprehensive, regularly-updated database (ideally in electronic form) of all the key people you may need to reach in the event of a crisis. This includes key media contacts, key contacts in government, key managers, etc., with their home, fax, cellular telephone, twitter, instant messenger and other coordinates.
- You have included everything from steps 3-7 in a regularly updated crisis communication manual (paper, electronic or both) which is readily available to all your key executives and managers.
- You have condensed the key contact information onto a wallet card which all your key executives and managers can have with them at all times.
- You have tested your organization’s ability to carry out this plan and these procedures in a simulation.
HOW TO SCORE RESULTS:
Award your organization 10 points for each “yes.”
Under 50 points:
Either your organization has consciously decided it likes living dangerously or it’s living in a fool’s paradise. Let me guess: the organization also carries the least possible insurance, because one of your executives said “the premiums cost too much.”
50-60 points:
You’ve got something stuffed into your parachute sack…unfortunately you don’t know whether it’s a parachute or a dirty hanky. It’s time to turn your plan into a high priority business project with a completion deadline and support from senior management. The majority of listed type organizations fall into this category.
60-80 points:
Now you’re training for the big time! Time to focus on those few things that are keeping you in from being the leader in your field!
80 points or better:
Welcome to being a leader in your industry. You can sleep nights; at least as far as crisis preparedness is concerned. All that is required from you is to benchmark and audit compliance to ascertain levels of assurance.
The questionnaire above is just a small extract of a detailed questionnaire that is included in a product – The Crisis Manager Toolkit that is available on CD or for download. For more information and rates, send me an e-mail.
I have uploaded the Reputation Defence Masterclass brochure and registration form to my blog for ease of access.
Just visit the link:
http://deonbinneman.wordpress.com/events/reputation-defence-masterclass-reputation-risk-mitigation/
| What: | Reputation Defence Masterclass (Reputation Risk Mitigation) This two-day Johannesburg-based Masterclass provides comprehensive and practical coverage of all aspects of implementing reputation risk management & protection frameworks and is based on more than 25 years research and experience on how to protect business reputations. It offers not only international best practices but also covers the requirements of some of the principles in the new draft King Code 3 on Corporate Governance, especially “Principle 4.14: The board should ensure that the company’s reputational risk is protected” |
| When: | Wednesday, June 10, 2009 8:00 AM to Thursday, June 11, 2009 5:00 PM |
| Where: | Hotel Apollo
Corner of Bram Fischer Drive and Republic Road, Randburg
Johannesburg, Gauteng 2118 South Africa |
If you scroll down the page, you just have to click on the two links, to observe a detailed brochure outlining the programme for each day as well as the registration details. Should you be interested in saving R800, then access the registration form now and make use of the Early Bird option.
I look forward in meeting you and sharing the ways and means to protect your organisation’s biggest asset and risk in today’s knowledge economy.
Please share this information with other colleagues who might benefit from this exposure. Remember Knowledge only becomes Power once it is shared. Your assistance in this regard will be much appreciated.
A Fire Drill in Toronto, Canada not only created panic, but it brought with it unwanted publicity.
CNN reports that Police in Toronto, Ontario, received a call at 10:47 a.m. reporting
that several armed men had entered the Bickford Centre, an adult
education center where adult literacy training and other courses are
held.Officers responded to the building and blocked off traffic on surrounding streets and the center itself.
On the scene, police soon discovered that the
“threat” was nothing more than a training exercise; the reported
suspects had simply been participating in a safety drill.
“School officials were conducting a drill but did not inform anyone else,” Vella said…..
http://edition.cnn.com/2009/WORLD/americas/05/21/ontario.false.alarm/index.html?eref=edition
Lesson: In any Crisis simulation(of which Emergency Response plays a small part), it is vital to determine various stakeholders communication needs and the communication protocols to be followed during such a crisis.
In this case, good intentions, but lack of planning sank the ship.
