As revealed in Netflix’s new documentary, ‘White Hot: The Rise and Fall of Abercrombie and Fitch’, today’s company is very different from the brand of the 1990s and early 2000s. For more than a decade, Abercrombie and Fitch have been in the process of rebuilding its reputation; this reveals some interesting lessons that we can take away as PR and comms professionals.
In its heyday, Abercrombie & Fitch (Abercrombie) was worth more than $5 billion and had more than 1000 stores worldwide. During this period, the company was led by Mike Jeffries, who once revealed in that now-famous 2006 interview that the company’s marketing strategy was deliberately exclusionary. He only wanted the ‘attractive’, ‘cool kids’ wearing Abercrombie. If we look a little deeper, we see that this was not merely a surface level PR strategy – you want what you can’t have, right? Instead, racist and exclusionary policies were embedded within the company’s culture. While these policies once appeared to benefit Abercrombie, as attitudes changed, they quickly eroded the company’s reputation, which has had a fundamental impact on the business’s long-term growth.
The question is; what can the demise of Abercrombie teach us about the importance of managing your company’s reputation?
As the company’s figurehead, the CEO will always have a significant impact on the reputation of your company – both positive and negative! The former CEO of Abercrombie, Mike Jeffries, who once led the brand’s revival, would ultimately become its biggest liability. Jeffries was known for his bold ideas and commitment to the brand. However, he was also uncompromising, unorthodox, and did not take criticism well.
While Jeffries has long since left the company, Abercrombie is still working to ameliorate the damage caused by his tenure as CEO. Ultimately, Jeffries should not have been left to manage the company for so long. That being said, the current CEO, Fran Horowitz, has been working hard to ensure that the company is accountable for past mistakes. In a statement to CNN, Horowitz said, “we own and validate that there were exclusionary and inappropriate actions under former leadership,” adding that the company is now “a place of belonging”.
While the company has a long way to go, the importance of leadership accountability is evident here. Suppose a business fails to hold its leader accountable or recognise when it is time for leadership change. In that case, long-term damage will be inflicted upon the company’s reputation.
As times change, often should a company’s values. Failure to make the necessary changes will eventually impact the reputation of any company. When Jeffries began his tenure as CEO, he built the brand upon racist and discriminatory values. These values quickly began to seep into company culture and policies, hiring practices, and even the designs on the clothes.
In 2003, 8 former employees sued Abercrombie for race and sex discrimination. Without admitting any guilt, the company settled and was required to pay $40 million and sign a decree to change its practices and promote diversity.
For a while, the company continued to get away with its discriminatory practices. However, these days consumers value and expect brands to promote diversity and inclusion. Abercrombie failed to move with the times, which meant that as attitudes changed, the brand became toxic, and their failure to own up to past mistakes came back to haunt them. Companies should continually audit their values and policies to ensure that they are promoting diversity and inclusion and that they are not breaking the law, for that matter!
The demise of Abercrombie from a multi-billion dollar brand to a disgraced clothing company can teach us a few things about managing your company’s reputation:
Facebook has had its fair share of crises in its relatively short and troubled tenure – the most recent being revelations from whistleblower, Frances Haugen, about the company’s algorithm increasing divisiveness on the platform, as well as insider knowledge about Instagram being harmful to mental health. And yet, at the start of the year, we heard about the company’s rebrand to Meta with a renewed focus away from social media and toward what is known as the metaverse (check out our previous post on the metaverse to find out more).
While it seems perfectly feasible for Facebook to rebrand – as businesses typically rebrand every seven to 10 years (Firefly included!), Facebook sceptics might think that the ‘Meta’ rebrand is merely an aesthetic exercise in an attempt to cover up a string of wrongdoings. Rebranding to Meta to align with future goals and visions of the metaverse does make sense – a company setting out a new vision, new goals and a rebrand to align to those goals is the natural next move. But in the case of Facebook (and many other rebrands, which I’ll come onto), it can also be a reputation reshaping exercise, which brings me to the question, is a rebrand enough to save a reputation?
Moving with the times – why companies rebrand
Facebook isn’t the first, nor will it be the last company to rebrand, especially after a spout of bad publicity. In fact, many brands will do a complete overhaul throughout their time – in a lot of cases, it’s how big brands have kept going for so long. When McDonalds chose to completely revamp its restaurants from the playful, Ronald McDonald kids culture to the more sophisticated, café-like culture of today, it was simultaneously going through a major crisis. The documentary “Super Size Me” exposed various health concerns around McDonalds food, prompting a drop in profits and leaving a bad taste in the mouth (no pun intended) for consumers.
Elsewhere, the Gillette 2019 advert which announced the brand’s new slogan and made references to #MeToo and toxic masculinity conversations split opinions across the public. Some deemed the change a fresh look from the 30-year old tagline, while others decided to boycott the brand, claiming it as “feminist propaganda” and “emasculating men”. The brand rode the wave, defending the campaign and stuck to its new ways despite the outrage.
Besides moving with the times, a rebrand might also be spurred on by a new CEO or exec team, there may have been a recent merger or acquisition, or perhaps the company is ready to go global and needs to rebrand to be able to reach that global audience. Whatever reason a company chooses to rebrand, it can reap many reputational rewards, but also faces multiple risks if not done right.
Don’t just be a pretty face
Saving a damaged reputation needs to be carefully considered. Simply changing the face of your brand alone won’t cut it, the audience will be able to see straight through the cosmetic changes, so remember to also work on real change inside the company too.
Here are few pointers to consider if you’re thinking about rebranding and reshaping your reputation:
Back in the early 90s, I watched a film called The Power of One with Morgan Freeman and a very young Daniel Craig playing the villain. It was essentially the story of a young boy becoming the symbol of change and hope – as far as I recall, it was a good watch but the title stayed with me.
I was reminded of the power of one recently as we watched the Fastly crisis unfold. Dozens of websites were down including Amazon, The Guardian, Reddit and even the UK government website. What was even more shocking was when it was reported that this outage was caused by one single Fastly customer. At first, I thought it was bizarre for such a big issue to be caused by one person, but actually it’s not. Single people impact and change the world every day, whether they know it or not. And actually, it’s the power of the individual that can make or break companies, especially when it comes to reputation.
One person, one move, one potential crisis
I was told a great anecdote recently about frozen chickens when discussing reputation with reputation lawyer Magnus Boyd for our new book, Reputation in the Round (coming soon – keep an eye out!). Magnus said: “Imagine that you have a young member of staff in a supermarket who decides to have a bit of a laugh. This person kicks a frozen chicken around like a football and someone records it, putting it on social media. We’d all expect a bit of a crisis from this, and perhaps the stock price of the supermarket will take a hit as people see the video. What people don’t think about is that pensions are investing in companies like this, and suddenly your retirement plans are in the hands of an 18 year-old playing around with a frozen chicken. That power has only really come about in the last decade but drives home the importance of involving everyone in discussions about company reputation, and making sure that they permeate through the entire organisation and everyone is aware.”
This really shines a light on the potential of the individual and highlights just how important it is to ensure that everyone is on the same page when it comes to your reputation plans. The recent open letter to BrewDog from ex-staff complaining of a culture of fear demonstrates this clearly – the people at the top are really clear on the bold and punchy characters they wanted to be, but many in its workforce felt differently. It was the choice of more than 100 ex-employees to publish the open letter, while it was the choice of the CEO to publicly respond. Was this enough to override any reputational ramifications? It’s possibly too early to tell. But what we do know is that organisations must always think about their most valuable asset – their people.
Fast growth needn’t make your people furious
Technology companies are particularly infamous for fast growth – the pace of innovation is getting faster and faster by the day. Things change constantly, opportunities blossom and more often than not, it all seems to happen at once. The trick is to try and keep up with the tides, not swim against them.
In times like this, it may feel that the best thing to do is shout about success but it’s a perfect time to start listening more. Think back to the recent issues with Goldman Sachs – junior staff complaining of working 100 hour weeks and feeling as though they were victims of workplace abuse. We’re all guilty of working a bit too much from time to time, but when it’s this many extra hours there is clearly more growth than the people can keep up with and most likely unrealistic targets set for them too. When you grow, people have so much more on their plates and these plates don’t get bigger. Sometimes you just need more plates, otherwise there is a risk of people being overworked, underappreciated, and issues such as burnout become more likely.
Top tips for managing fast growth to prevent reputational risks
Reputation is fragile, like a spider web. It takes a lot of time to build but can be broken down quickly. Here are some of the ways that technology companies can pause and make sure that the fast growth ahead is manageable:
Much like the protagonist in The Power of One, one single person can have a huge impact – be that a young man standing as a symbol of hope to strive for a better future or a single Fastly customer causing a mass internet outage. Reputation is not only in the hands of the people at the top, it’s also the responsibility of the everyday employee – their time and effort need to be not only valued but celebrated. Each person holds an important power, it must be nurtured and cared for, especially during the stressful times of fast growth.
With so much innovation coming from today’s tech firms, the number of major announcements they’re making on a regular basis has skyrocketed. Nowadays, companies aren’t relying solely on the media to get their news out into the world. They can use their owned channels and upload an announcement to their website and social feeds in a matter of minutes. They’re usually drawing attention to the wonderful new things the company is doing. Every so often though, they upload something very different.
I’m referring here mainly to announcements that reveal cultural changes, which have become something of a normality in recent years. Coinbase banned discussions around politics and social matters last year, for example, which was followed by Basecamp banning those topics on its company-wide Basecamp account and even taking it a step further by stopping 360 employee performance reviews and disbanding all of its committees. Both companies’ announcements raised eyebrows and concerns across the industry.
The crux of the matter
What’s fascinating about ‘no more politics’ announcements is the manner in which the message is delivered. As someone with their ear to the ground on all things reputation, I found the Basecamp statement was especially interesting. This was a bold, confrontational announcement that explained a number of changes in the company, some of which have proven unpopular externally and may be disliked internally too. The tone was almost daring the reader to challenge them. It was the higher-ups saying “this is what we’re doing, deal with it”.
Regardless of whether you agree or disagree with the decision to ban political discussion in the workplace, there are lessons to be learnt here. Let’s not forget that this wasn’t a reaction to a crisis, it wasn’t a story uncovered by an investigative journalist, there haven’t been any laws broken – the company opted to share private information willingly.
They identified that these are contentious matters and sought to disclose the decisions to remove any risk of a potential white blower sharing the information externally anyway. There’s nothing wrong with getting out in front of a story and it can often be the correct strategy in certain circumstances. In this scenario though, three things really niggled me.
Firstly, Basecamp’s announcement didn’t just reveal the banning of political talk on its company channel. It included the revelation that it was disbanding all committees. It also revealed the decision to no longer use 360 employee performance reviews and, instead, managers and team leaders would be solely responsible for performance reviews. In this one announcement, they released three decisions that arguably could result in question marks over the health of Basecamp’s culture and conditions employees face. Would it have been better to reveal such decisions one by one over a longer time period instead of dumping all three at once? Did the committee and 360 reviews decision even need communicating?
Secondly, the importance of reading the room and getting the tone right cannot be overstated. Every business operates differently in one way or another, sure. And, for some, maybe committees really don’t work. Whatever the activity a business pursues or stops though, explaining the reasoning and decision for doing so clearly and in a way that doesn’t provoke is critical. For example, explaining the removal of 360 feedback because they’re “not very useful” isn’t sufficient. After all, any seasoned professional knows that reviews such as this, like almost any activity, is only effective if implemented correctly. At the moment there is growing pressure to improve business culture and look after employees more. The messaging for an announcement that in any way touches on employee performance should reflect that.
Thirdly, business decisions are made with the best intentions most of the time. Sometimes, they’re made on gut feeling and with minimal data and insight. Political discussion, the effectiveness of committees, and the usefulness of 360 reviews aren’t exactly quantifiable. Therefore, a decision on them is based on the hope that doing something different will work out better. If you’re communicating a change around matters such as these, there’s an element of humility needed, and ego has to be left at the door. No company knows categorically whether banning political discussion will be better, so communicate your hope that it will be and your desire that employees’ work lives will be improved; don’t simply position something as bad and must be banned.
Do these decisions really matter?
In a word – yes. They should matter, anyway. Now, don’t get me wrong, political discussion can be challenging, draining, and can drive a wedge between even the closest of colleagues – so I understand why an employer might want to minimise this.
It would be interesting to know exactly how this decision was reached though. Did this come from the workforce as a request and, if so, did a majority of employees approve it? Or was it a dictatorial decision, forced upon employees? One suspects it’s the latter.
Furthermore, who determines what is and is not ‘political’ and what falls under the umbrella term ‘social matters’? My take is that topics such as diversity and climate change would be off limits, given their political and social nature, and that is to the detriment of all parties. Without discourse on these topics, employees have no power in holding their employers to account for failures or lack of action on important global and societal issues. Boardrooms become echo chambers for the white elite, because they’re not tuning in to what the workforce cares about.
What’s the alternative?
As the CEO and leader of Firefly, my view is that there are viable alternatives to the ‘no political discourse’ approach. Businesses should trust their employees to know when to speak up about what’s important to them politically and to know when it’s appropriate. They should listen to employees’ views and how that affects the organisation and consider what the business could or should be doing in response.
What it really comes down to is that employers should trust that the employees will know when to get on with the work and deliver what’s needed to clients and customers. Set clear work objectives, help people stay focused, and ultimately treat people like the adults they are. Yes, it’s more effort than a ban, but businesses of today can’t simply restrict the things that require more effort.
An open culture will reflect well on company reputation. Just look at the extremes to which many tech companies go to so that, on one hand, their employees feel heard, valued, and respected, and on the other hand, they can be seen as good companies to work for and invest in. The likes of Microsoft, IBM, and many others, wouldn’t be driving diversity and sustainability transformation to the degree they are if it weren’t for sound business and reputation reasons.
As for an alternative for 360 employee performance reviews, I would ask any company that’s not found 360 reviews successful whether they simply need a different approach to how they undertake them, instead of discarding them altogether. Maybe they could benefit from changing the tools they use for the reviews, or train people to improve how they complete reviews, or even bring in professionals to complete them so it’s more objective. It seems to me that the senior management at Basecamp might benefit hugely from a good, constructive, and positive 360 experience, because more self-awareness builds stronger relationships and stronger relations aids a more positive reputation. More impactful 360s start at the top and, if it is done well, it will reverberate a positive change for the better down through the organisation.
I’m looking forward to seeing how other well-known tech companies communicate changes such as this in future – whether they follow the ‘drop all the changes in a single update’ approach, keep quiet and wait for information on updates to be leaked, or drip feed the information gradually over time. When it comes to banning political discussion in the workplace, the industry has been going in the opposite direction in recent years, but it’s possible we’re about to witness a change. It would be a major shame if bans on conversation around politics and social matters become more widely adopted, at least in my view. What’s yours?
The pandemic hit some organisations harder than others, and for companies like Airbnb in the hospitality industry, it was a big blow. So, it wasn’t a surprise that Airbnb made the decision to pause all its performance marketing, but what may be a surprise is that the cut is going to be permanent.
Airbnb’s founder, Brian Chesky, explained that despite taking performance marketing down to zero, the company still had 95% of the same traffic from the year before. This lesson has prompted a complete rethink of marketing spend at Airbnb.
Airbnb plan to move spend away from performance marketing and into brand marketing, with a focus on media relations. During the company’s earnings call, Brian Chesky said that this new ‘full funnel’ marketing strategy is “very important to the corporate story”.
Looking at the numbers, it’s not a decision that has been made lightly either – and I should say that they haven’t cut performance marketing altogether, but reduced it significantly.
Now, you may be thinking that it’s alright for them to make such a bold move, they’re already so well known. And you’re right. The Airbnb brand is strong so getting people to the site is not an issue.
The focus now for Airbnb is different – their communications objectives are now centred around broader reputation and helping people to understand the brand better. The company wants potential hosts and guests to understand the benefits and what makes the experience distinctly Airbnb.
This isn’t just a strategy for brands with big reputations, it’s about applying the right marketing mix to support your objectives. What PR allows is more than just eyeballs on your website, it’s a vehicle to educate, inform and shape your company’s reputation. Those who get it really right create more than just a commercial connection, but an emotional connection to the brand too.
Airbnb really get this.
Now is the time to reassess your marketing spend. The pandemic has changed everyone’s behaviours, so consider this: Do you have a clear understanding of what these behaviours and beliefs are? How do you adapt your comms with that understanding? The European Journal of Social Psychology states that it can take between 18 and 254 days to form a new habit, and an average of 66 days for that habit to become an automatic behaviour. We can safely say that we have had very long stints with significant government restrictions, meaning our routines have changed. How we all live and work will never go back to the way things were, so your marketing strategy mustn’t either.
And it’s not just about gaining a better understanding of your audiences – it’s about realigning your communications to this ‘next normal’.
But remember that there are always changes around the corner. The beauty of Airbnb’s move is that they’ve allowed for flexibility in their marketing strategy, and have kept a mix of tactics, which can be dialled up and dialled down.
We’re on the path out of the pandemic – be bold and #reset!
The past few weeks must have been pretty stormy in the KPMG comms team. KPMG’s ex-chairman, Bill Michael, recently came under fire for making controversial remarks about his employees “playing the victim card” and “moaning” about their circumstances during the lockdown. The comms team reacted fast and the organisation was quick to make changes – and communicate them well! However, it’s unfortunate that most of the damage took place in a matter of days as Michael’s story trial was analysed and scrutinised by the media in no time at all. It’s clear that there is a lot of work to be done with repairing KPMG’s damaged reputation and the comms teams are more than likely sorting it as we speak, but what would you do if this happened to your organisation?
Of course, this question may feel like nothing more than hypothetical but getting stuck in these kinds of dilemmas isn’t as far away as you may want to believe. It could be something as simple as a video leaking of your CEO or Senior Director saying something in private that goes against the company vision or values. It could be a spokesperson retweeting something without fully understanding the implications. Or even just someone forgetting to change from their social media account to their personal account and tweeting something inappropriate from the company feed. It may seem unlikely, but these things have happened countless times before. Cast your mind back to 2017 when Uber’s founder Travis Kalanic’s argument with a driver was leaked – it cost him his job and a hit to his reputation. We’ve explored this further in our Reputation Shapers guide that you can access here.
There is no doubt that an over-exuberant or insensitive leader somewhere will make mistakes again, and there is so much being written right now about leading with empathy. But, how can you prevent this from happening in the first place and protect your organisation if the heavens open and you find yourself in the middle of a communications storm? Here are three tips to help with weathering the storm:
Take time to train
Just because someone is a good speaker doesn’t necessarily mean that they are ready to speak to the world. It is so important that senior teams are trained and fully briefed before stepping into the media limelight. And it’s not just about knowing how to speak well with the media, it’s about knowing how to stay on message and communicate appropriately. Similarly, it’s important to know what kind of person they are. Are they likely to lose their temper? Are they stubborn? If so, these things could become an issue and understanding what they may need and supporting them is equally as important.
Remember, it’s not just the media we have to be prepared for. The drama with KPMG stemmed from an internal discussion at a town hall, Uber’s issues arose from a leaked conversation with an employee and countless figureheads have been cancelled on social media for speaking out of turn. Just like the timeless saying goes: Fail to prepare, prepare to fail.
Staying calm in a crisis
Being in a crisis, regardless of the situation, is a stressful ordeal for anyone to face but being prepared for it makes the experience a bit more palatable. With any media-related plans that have even the slightest possibility of turning sour, your comms teams must be prepared for a crisis situation.
If you aren’t prepared and something has come up to bite you, much like the KPMG comms team must have felt recently, the first step is to pause and understand just how damaging this is. Knowing what you are working with will help to rationalise the next steps and understand how much help and support you may need. This can also help to understand how rapid your response should be. Jumping on the issue too soon could make it seem insincere but leaving it too late leaves time for speculation to occur.
Secondly, what is the best way to communicate your response? Is it sending a press release, or holding a press conference? Or even just focusing on one interview to clear the person’s name? Whatever is the best practice for the situation, stick with that and follow it through until the end. Depending on the scenario, actions may be your next step. When looking at KPMG, the cultural lack of awareness might not end with the removal of the chairman but it’s a start – this needs to be followed up with proactive action from the company to get their reputation back on track to prove to their people, clients and the outside world that they are doing things to actively improve these situations.
Finally, ensure you are monitoring the situation and staying on your toes. Just because the news cycle is over, doesn’t mean it won’t come back to bite you!
Crystal clear communications
The vocabulary we use to communicate is just as important as the way we communicate. An easy way to ensure the right language is used is by accurately preparing for communications – this can be through detailed briefing documents with sections that focus on topics and phrases to actively avoid, or in-person training sessions. Granted, pressure or nerves may get in the way, and that cannot be helped, but giving support and practising should help to avoid potential mishaps.
The only thing worse than saying the wrong thing is saying nothing at all. When faced with a difficult question, it may feel safer to say “no comment” or divert from the question itself but this can be just as damaging. Recently, Matt Hancock came under fire from Piers Morgan on This Morning following the free school meals scandal. Instead of answering the question, Hancock merely recited the “safe” phrases and unsurprisingly, the interview spread like wildfire. Should his comms team have been prepared for this question? Absolutely! But communications can be unpredictable and with the power of social media, one foot in the wrong direction can become a crisis in a matter of minutes.
Getting it right with communications is tough – the world is unpredictable and what grabs people’s attention is changing every day. As comms professionals, we must ensure that we are prepared for all outcomes, good and bad. These tips will help you to prepare your teams and leaders for communications gone bad but sometimes it helps to get an outsider to help. We run workshops and personal coaching programmes that can help with these issues and prevent them before they arise – you can read more about our services and offerings here.
We all have conscious and unconscious opinions that influence our decisions, but it’s the emotional, unconscious opinions that people are more likely to follow. Why? Because we’re human, we like shortcuts and sometimes we don’t want to think too much about something. If ‘Simon’ says it’s great, then it must be great and that’s good enough for me too. We have busy lives, even in lockdown, and sometimes we want to save ourselves the time and hassle of fretting over every decision.
Here’s an example: I decided I wanted to embark on a healthy eating and fitness mission, but being in tech PR & comms, and wanting to enhance my baking skills in lockdown, I also dreamt of buying a Wi-Fi-enabled, app-controlled breadmaker. My friend Simon said his breadmaker was brilliant. So, I didn’t do any research and bought the same one. But, after baking bread daily for 2 months, I have gained a lot of extra pounds and, whilst fun, it has achieved the opposite of my intention. I can’t blame Simon, or the breadmaker, but the decision was hasty and impact weighty.
This shortcut thinking is called heuristic thinking. It’s a way for our brains to save a bit of energy and to work more efficiently. Often, we’ll make a quick, irrational or impulsive decision, that won’t be completely reckless, but sometimes we won’t be aware we’re even doing it. And it happens a lot, every day. Why do we reach for the same brand in the supermarket? Why did we all panic about loo roll a few weeks ago? Intelligent, sensible people became obsessed with a quest to buy loo roll, and yet, the nation survived.
In my lockdown cocoon (and bread heaven), I’ve missed shooting the breeze with my friends and colleagues. Zoom works just fine, but there’s always some element of formality to it and the conversation isn’t as free flowing. I’ve missed sharing problems and giving and receiving those tidbits of information that will help shape my own opinions and perhaps help me make some good decisions throughout the day. That said, I haven’t totally ignored all third-party opinions. I’ve read a lot of content online, attended many webinars and researched many topics via Google. But I do miss the face-to-face exchanges with people, bringing outside thinking into my opinions.
Given the ‘follow factor’ of the unconscious opinion, it’s made me realise that what other people say about you, your product/service or your business is the most powerful trigger. That instant ‘warm recall’ of a product/service or a company that puts a smile on someone’s face, and creates loyal, returning or new customers is surely the holy grail of reputation.
But how do people form their opinions in the first place? They may be based on what others say, or their previous thinking and behaviour patterns, or maybe they have an experience which forms it.
Guessing what sort of reputation you, your product/service or business might have based on a few recent interactions is very dangerous. No data means no depth. And this is where heuristic thinking is positively lethal. You really need to know the truth and not follow your rule of thumb hunch. You need to proactively ask and engage with all your stakeholders. A sample size of 35 per category is a good start because of the Central Limit Theorem. However, asking more people is always more accurate and recommended.
Start with your employees first because they are the window to your company’s soul, and if the team isn’t feeling it, then the customers certainly won’t. Use every opportunity you can to gain employee feedback – whether it’s a team-wide survey after a product launch, a monthly all-hands meeting or an impromptu Q&A session with the senior leadership team. Opening up the floor and encouraging your employees to ask questions will help make informed decisions, and avoid employee backlash later on, when it might be too late.
What your workforce really thinks of how they were treated in lockdown will be known relatively soon. When business picks up, will they vote with their feet and leave? What will your Glassdoor reviews be like this time next year, when you’ll be hiring again? I know plenty of people who have said that they’ll be moving on just as soon as the job market opens up. The true colours of leadership teams were shown recently, and, for some, it wasn’t admirable at all. So, how did your leadership team cope with COVID-19? Are they admired or derided?
Next on the list is your customers. Throughout the pandemic you might have been offering reduced services, how did your customers react? Were they satisfied with the customer service and given clear instructions on what to do in their particular situation? Looking into what’s being said about your brand on social media is one of the easiest and quickest ways to gain customer insights, whilst small focus group can go even deeper. At this time, your customers will expect you to have all the answers, even if you don’t know them yourself, but it’s how you’ve reacted and responded to your customers that will be key to how you’ll be viewed in the post-pandemic world. So, did you delight or dismay your customers?
How businesses have responded to this recent crisis will be remembered for a very long time. And, of course, depending on the outcome of the above will depend on how your prospects see you. How will your business emerge?
Will you pull through with a great reputation? Will you have the reputation you deserve? Will it be a reputation to help you rebuild or grow your business? If not, maybe you need to work out where your reputation gap is between what you say you do, and what people experience.
There are no shortcuts to true excellence and success. It is earned. It needs to be worked on every day. Reshaping a reputation without real insight and data could waste much effort, money and time. It would not be a shortcut but a potentially long road to a wilderness, even if the intention is good.
So, about that bread machine… it’s been a blast, but it’s relegated from the worktop to the back of the kitchen cupboard for now. Simon and I have now signed up to a new healthy eating meal plan, involving no bread, and the extra weight is disappearing very slowly. Bake in haste, repent at leisure.
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.
When you think about successful and well-known leaders in the business world, which words spring to mind? How about strong? Decisive? Innovative? Disruptive? How about wealthy or unscrupulous?
What about ‘kind’? Did that make the top ten – or even the top twenty?
In our experience, kindness is rarely seen as a positive attribute for a leader. Despite an increasingly woke business world, where there’s a growing focus on sustainability and transparency, simple kindness is still often dismissed as a ‘nice to have’ that organisations just can’t afford or don’t prioritise.
Let’s unpack that a bit more, because as a human, there seems to be something wrong here. Why isn’t kindness desirable in the leadership community?
Show me the money!
It’s a really easy question to answer, and unfortunately, it’s not pretty. More often than not, ‘kind’ can be associated with words like ‘nice’, and if we’re being brutally honest, some see kindness as ‘weak’. There’s often an ‘attitude hangover’ from the eighties, nineties and noughties where leaders model themselves on figures like the Wolf of Wall Street or other characters from fast-talking macho TV shows or cultures.
Similarly, there’s often a feeling that kind people get taken for granted or taken advantage of. The anchor of London Real, Brian Rose, puts it neatly “[that] if we hang out with lower status monkeys, we’re going to go down the tube with them” – as if there’s some kind of contagious ‘neediness’ virus that’ll spread from people who need help to those helping them. When you think about it, this barely makes logical sense – if you’re the one giving, you’re not needy by definition.
That said, there’s little doubt that the business world is a tough place; leaders have to make difficult decisions, conduct disciplinary hearings, make people redundant, get the best deal for the organisation, and stay smart. It’s clear to see why the default path for leadership is often being as cut-throat with your employees as you are with your competitors, but it’s not the only way to be.
Is it possible to be kind and a leader?
It’s a horrible experience to lead a round of redundancies or close a facility, but it’s possible to do it with kindness, treating employees with respect, as humans. Your competitors might profit from ‘dirty deals’ for years – but in the age of transparency, they might also be found out. After all, McDonald’s was completely untouched during the ‘horsemeat scandal’ of 2013, despite reporters’ best efforts to dig up dirt.
Similarly, a CEO can be undermined, even destroyed, by a review on Glassdoor or an allegation of misconduct.
Being kind is a long-term investment in your brand. Geoffrey Colon, Head of Brand Studio at Microsoft Advertising, recently gave a talk at CES, where he mentioned that Satya Nadella is encouraging all Microsoft employees to not only think about what they can do, but what they should do. Essentially his line of thinking was that brands can’t ‘just’ do a good job anymore; they have to serve a long-term purpose and solve a real human problem. This means staying relevant – and perhaps more importantly, staying profitable. This is a serious reputational consideration – and from this perspective, establishing kindness as a corporate value makes serious sense.
It doesn’t mean being weak; quite the opposite. Being kind is often having difficult conversations sooner, but in a fashion that treats your employees like human beings.
To give another example, when Mary Barra became CEO of General Motors in 2014, she had to deal with the recalling of over two million cars after issues resulted in the tragic loss of life. Despite the awful circumstances, Barra communicated with a kindness, respect and presence that firmly established her as one of the greatest leaders in industry today. Most of the press articles covering Mary’s statements at the time begin with her opening comments, which express deep sympathy for the victims, before being candid about the root causes of the issues.
Barra took responsibility. She expressed candid regret, and she explained what she would do to not only address the immediate concerns, but also the systemic problems across GM. Her approach was kind, but it wasn’t easy, and it certainly wasn’t weak.
But Barra wasn’t only a great leader with the big issues; she reputedly changed GM’s entire dress code from a long-winded document to ‘dress appropriately’, treating staff with the trust and respect to make their own decisions.
None of these policies are the sign of a weak, unsuccessful leader. In fact, under Barra’s leadership, GM’s share price has been consistently higher than prior to her joining. Similarly, even the most bullish of leaders – such as Oren Klaff, who trains leaders to pitch to Venture Capitalists – admits that he can be ‘nice’. Opinionated, of course, strong when he needs to be, but still ‘nice’!
Furthermore, a general change is coming; some leaders who established themselves in earlier decades are learning new values or handing over the reins to younger, more woke generations – but it takes time. However, there is evidence that younger generations are calling out antiquated behaviour more often in the ‘OK Boomer’ movement. Admittedly, this isn’t the kindest way to do it, but nonetheless, evidence that there is a significant generational change coming!
In fairness, many kind leaders do exist in older generations – at Firefly we’ve had the pleasure of working with some of the best people in the industry.
Remind me why I should be kind?
There’s really only one reason to be a kind leader: it’s the right thing to do. But if that’s not enough for you, here’s a few other factors to consider.
– According to the University of Warwick, happy people are 12% more productive. In fact, a Google study found that increasing employee support resulted in a 37% rise in employee job satisfaction.
– Satisfied employees stay in their roles, and they work harder. Companies have both ‘character’ reputations (‘do I like you?’) and ‘capability’ reputations (‘are you going to do what you said you’d do?’) and if you erode the former then you’re purely dependent on the latter. This means that people are less likely to give you the benefit of the doubt when your products and services fail – so it’s beneficial to have a good character reputation.
– Applying kindness to the wider business function and environment pays; funds that specialise in clean energy, water and forestry like Pictet Environmental Opportunities have seen a 50% rise in value in the last four years.
– Customers appreciate kindness – and this attitude comes from the top. Ritz Carlton hotels are famous for small but meaningful acts that drive repeat business – again and again.
– Kindness drives return business, engaging customers – and this brings a 23% higher ‘share of wallet’, compared to competitors, according to Gallup research
Get involved, or get out of the C-suite
Not all leaders choose to actively motivate their staff, instead relying on pay and benefits to do that for them but for those that do, it’s often portrayed as a binary choice between the carrot and the stick. In the twenties, it’s not that simple anymore; after all, while a kind, firm, fair leader can motivate staff, they also empower staff to motivate themselves, supporting them, being an ally and an advocate for them. This falls somewhere between the stick and the carrot. [Ed. A ‘stirrot’? No? A ‘carrick’? I’ll stop.]
Either way, kind leadership is a step forward to a better brand of business, one that is more respectful to its employees, its suppliers and the world at large. And in this politically volatile, economically uncertain age, that’s something that we sorely need.
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