There’s an insurance policy for everything these days – and we mean that literally. Whitney Houston insured her voice, Michael Flatley insured his legs – and America Ferrera insured her smile for $10m in 2007. However, in our industry, reputations are a bit less tangible – but you can nonetheless take out insurance to cover them!
Is this ridiculous?
Well perhaps not. According to a study in 2018, reputation represents as much as 41% of the FTSE 100. 70% of jobseekers say that reputation is important when considering a new opportunity. And for every 5% improvement in reputation, organisations will see a 6.3% increase in purchase intent, according to the Reputation Institute.
Reputations are valuable – there’s no question about it. We’ve all heard about catastrophic events that can seemingly break brands in seconds. I usually cast my mind back to Ratner in 1992 and Domino’s in 2009, but it’s also true that many brands have more resilience, even to strongly adverse effects. So, despite Elon Musk’s many gaffes about scuba divers, being accused of fraud by the SEC and smoking weed during an interview with Joe Rogan, Tesla’s share price has remained relatively robust.
Now, we are strong advocates for preparing for the worst, but you can’t plan for everything. And once you’ve mapped likely and impactful scenarios out in a crisis plan with the leadership and communications team, most managers will put the folder back on the shelf and make a coffee, content that their job is done.
They couldn’t be more wrong.
The future is unknowable, but there is something else you can do about it.
Consider the unknowable
As we’ve said, you can’t plan for everything. You can’t possibly anticipate the reaction of every single employee to a data breach. You can’t plan for the reaction of your suppliers or channel partners to an unethical deal you made in the past – they might raise their prices because they perceive you as untrustworthy, or actually appreciate your ingenuity! You can track shareholder confidence fairly easily through share price, but what about hostile questions during an AGM, or a panel that you’re speaking at?
We’ll assume that you have indeed, already planned for the worse (and if you haven’t, don’t worry – there are a few pointers below) but we also recommend taking a lesson from international diplomacy. As Margaret Heffernan mentions in her TED talk, small countries often know that they lack the clout to force other nations to do what they want, so they simply try to be friends with everyone and spread their bets.
This isn’t an easy path by any means; and it flies in the face of many organisational strategies that focus on efficiency, cost cutting and ‘just in time’. Establishing positive relationships with suppliers, partners, customers, staff and other third parties is a tremendously intensive activity, demanding a significant amount of time and effort. It’s not just about planning for the worst – it’s about making sure that you’re prepared, right down to your organisational DNA and how you do business.
However, it’s a very ‘human’ thing to do. Establishing reputational robustness means that organisations and customers often give you the benefit of the doubt. At the very least, in the event of an issue, they’ll come to you first and give you the opportunity to fix an issue privately, rather than going to the press (or worse!) without your knowledge. Being kind and considerate, valuing your business partners and treating them well can be costly – but in the event of an issue, it pays off in spades.
The path to robustness
So, what’s the best path to ensure your reputation, above and beyond insuring it? It’s a big topic, and the first step is to know who you need to know and build or improve relationships with them. Similarly, there are a few other steps that you can take to build up reputational robustness – here’s a few resources that might be helpful, depending on where you are in the journey:
– Identify your stakeholders: check out Charlotte’s piece here for that
– Maintain a pedigree of agility and innovation: We can’t all be landmark brands like Tesla, but most brands have something worth shouting about. Being known for resilience, agility and innovation helps to maintain a ‘halo effect’ with shareholders
– Think about reputation in the round: Don’t turn a blind eye to any parts of the business
– Be ready for the unexpected: If you are in a crisis situation, Check out our advice in a few of our crisis guides.
We haven’t come across any brands that have taken out reputational insurance so far, but it’s something we’re very intrigued by! People have long memories, and although Domino’s – for example – is now seen as a landmark brand rather than ‘the dirty pizza company’ – we’d be fascinated by how an insurance company would help a brand restore its tarnished reputation!
For those that aren’t considering insurance, ‘ensurance’ is the best policy, investing in the confidence and trust of your own employees, suppliers, customers and third parties, as well as doing commercial due diligence around supply chains, modern slavery and fair working policies. This is an intensive process, but if a supplier makes a rash decision or an executive tells a catastrophic porkie, it might just save your bacon.
Calling all comms directors!
The business case for improving and protecting a reputation cuts across an entire organisation. HR takes an interest as it’s important to be seen as a good employer, whilst it is IT’s job to safeguard the organisation’s assets, including, in some part, its reputation. Then you have the obvious departments like marketing and sales where reputation is a key element of their success.
When we (Firefly) talk about reputation, we split this out from brand or branding. We tend to think about ‘brand’ as what an organisation says about itself, whilst reputation is what others think about the organisation. This means that reputations are largely built by the experiences and interactions we hear from others – customers, partners, media, employees, candidates… even the ‘robots’ like Google and Alexa. And it’s our job as communication professionals to influence these experiences and make the most of interactions.
With these multiple influences on your reputation you must ensure you’ve spoken to the right people in the business when creating your communication strategy for 2020. And have you asked the right questions? So, who’s on the list?
Marketing and sales
You’ll have likely worked together with this group as they have the most to gain from having the right reputation. To state the obvious, being known and recognised helps your marketing and sales team boost leads and convert new customers. But they’re a group you must stay close to, and regularly check in with to ensure your communication programme delivers value.
Make sure you ask them:
HR and recruitment
To attract and retain the best people, the reputation of the organisation counts. In fact, pay won’t always sway candidates, as 50% say they wouldn’t work for a company with a bad reputation. Organisations that neglect their reputation as a good employer will risk losing great people. Therefore, what needs to be highlighted is who the organisation is as an employer – what people get from working there, what exciting innovations are happening, what’s the vision and mission of the business.
Make sure you ask them:
Leaders are intrinsically linked to an organisation’s reputation and many stakeholders will want to understand who’s steering the ship. The reputation of the individuals in senior roles will impact the broader reputation of the organisation – in most cases adding strength through the compelling communication of an organisation’s vision, mission and purpose.
Make sure you ask them:
Product and service development
Many teams will be feeling the external pressure to be more sustainable, to be more innovative, essentially to ‘move on’ from the old ways – or simply to continue making better products at a lower cost. For example, products using lots of plastic unnecessarily, or software with a dated user interface will be quickly pushed to one side, and a reputation of being out of touch can quickly develop. Comms and development teams should connect, share customer insights and ensure what’s being communicated aligns to the future trajectory of the organisation. Those in charge of roadmaps will have this insight.
Make sure you ask them:
Security and IT
Unlike the other departments, working with your IT and security team is more about protecting reputation, rather than proactively building a certain reputation. Almost every organisation has been hit by some sort of cyber-attack – some more serious than others, and some with consequences for more than just the organisation itself. This is when security and IT teams link up to comms to ensure the situation is handled correctly and reputational damage is minimised.
Make sure you ask them:
With all this insight and understanding, the communication strategy you create is more likely to serve the whole organisation. It’s especially important to do this exercise when your organisation is going through change – which is pretty much all the time, right?
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