Online Reputation Management is a terrible thing to lose

By Reputation Management

Posted by Deon Binneman

Please pass this on to all the PR and Medisa lecturers, they may find this provocative.

Online Reputation a terrible thing to lose
What has JCI, SARFU, Exxon, Thor Chemicals, Bill Clinton and Michael Jackson got in common? Their reputation got shattered by a single act of indiscretion. Reputations that were painstakingly built over many years and at great cost. No wonder that “Reputation Management” is the newest buzz phrase in management
circles.

The reason for this new and intensive focus is simple: A good image is a terrible thing to lose! It has been said that 30 years of hard work can be destroyed in 30 seconds. And, while that might seem melodramatic, don’t try soft selling its meaning to Exxon, Johnson & Johnson, Pepsi-Cola, South Africa or Union Carbide who had a shadow cast over its operations since the Bhopal disaster where over 2000 people were killed due to a gas leak.

Ask Thor Chemicals or Staal en Beton, Pretoria. Grim reminders that crises can strike a Business at any time; and during these crises a Companys image and reputation can be damaged significantly. Often, this can be a result of not responding adequately to media enquiries. Understanding what Communication challenges may arise during crises or before one occurs is therefore critical.

So what constitutes a good reputation? This depends from organisation. There is no one reputation that works for an organisation that will work for another. Each organisation must find its own version, based on
the industry the company is in and what the customer requires. BUT one thing stands out “A Company with a good reputation is one in which the deliverable and the demands are in synch”. Companies whose reputations are aligned with corporate goals include Federal Express, which has a reputation for
reliability, Honda which has a reputation for quality and Disney whose fun, family-friendly reputation is a perfect fit for the companys products and services.

No Company, organisation or individual whose livelihood depends on public support can therefore afford to function without a reputation building and a crises communication plan, Yet, many organisations still have no such plans. Many companies say they need it but think that with positive thinking and hope the inevitable will never occur.

The reality is that Crises (and Reputation disasters) are often unavoidable. What is avoidable is being ill prepared. After all, Noah built the Ark before it rained. And, how is it possible that some companies find
opportunities in the time of crises, while others succumb to the danger.

The secret is that they have a well prepared Crises Communication and Management Plan and reputation management process in place and that all the staff, including those who will deal with the media are well trained, reputation conscious and ready to face the crises. For many years the PR profession propounded the importance of planning proactively for crises. Crisis management became a plan of action to be implemented quickly once a negative situation occurred.

Crisis Management however is now evolving into reputation management for a number of reasons:
Firstly, because this new phrase should attract more attention from top management. Chairmen and CEOs don’t often want to think about potential crisis situations. For many executives, a crisis is something that happens to someone else. It is a distant thought that can quickly be relegated to the back of the mind, replaced by concern for profit and productivity. After all that is the “business of business”. This is often caused by belief systems that have put boundaries on their thinking. A Failure to look systemically at things, to view issues in a new light. Some executives believe in denial. It will never happen to us, whilst others suffer from myopic thinking, believing that they can actually control everything, including the impact of non- reputational decisions. Others believe that if they have 5 star NOSA ratings and have complied with legal requirements such as the Occupational Health & Safety Act – that they have done what is required. So, the phrase “crisis management” may not sell well at the top. But every executive must be concerned about the reputation of the company or organization.

Second, more and more organizations are facing situations that have real potential for harming their reputations. The rapid change, the warp speed in which markets change, the quick way in which information can be communicated using the world wide web all play a part in increasing opportunity for
disasters. For instance : What happens to a company when a senior executive is arrested for fraud,
such as in the Old Mutual/Blank affair? What happens when an AIDS-infected employee is eating in your company cafeteria, and most employees refuse to come to work? In each case, the organisations reputation is at stake?

According to the Institute for Crisis Management in Louisville, KY, news stories on class action lawsuits against organisations went up 538% from 1991 to 1992. Coverage of business crimes rose 328%. Certainly, these incidents created crisis situations, but in the long run, it will be the public’s perception of reputation that mattered.

This is an important point, because the media are concentrating more on these types of stories. The June 1993 issue of Public Relations Journal (page 7) reported that news coverage of business crises in 1992 increased 45% over the previous year. Most medium- and large-market TV news departments now have special teams to dig into consumer complaints and expose business foul-ups. They salivate over stories such as the JCI fiasco, and the Thor Chemicals mercury poisoning or the Dow-Corning silicone scandal.
Perception is truth. And, even though most executives don’t like it, the media establishes the perception of your organization. And, unfortunately public opinion shift quickly, but reverse itself slowly as attitudes
die-hard. When there was a rumor a while ago that Nelson Mandela was ill, share prices dropped almost immediately.

So, in this new public relations discipline of reputation management, dealing with the media in an organized,
aggressive and timely fashion is mandatory. When your reputation is at stake because of a crisis that occurred one hour ago, it is not a good to call a meeting to discuss strategy. Second, the most important rule in defending, preserving or enhancing a reputation is that you work at it all year long, regardless of whether or not a crisis strikes.

The time to build a reputation is day by day. After all, would you like to be in a position where you have to alter or counteract unfavorable opinion, convince uninformed or uncommitted opinion, or reinforcing or conserving favorable opinion of your company? Of these three, changing hostile opinion, or neutralising it is the most difficult. Gathering latent opinion on your side is easier. It may take time, but ” latent” opinions contain fewer prejudices to overcome. Conserving your reputation is like dealing with old friends you want tokeep them.

On January 29, 1992, the New York Times reported that Dow-Cornings handling of the controversy that led to the Food and Drug Administrations call for a moratorium on breast implants could be compared to the Exxon Corporation response to the Exxon Valdez oil spill. Critics said that their mistakes included a lack of public action by its CEO, too little sympathy and compassion for women who said they were harmed,
and the failure to get the news out quickly. One consultant called it a classic textbook case of crisis mismanagement. He told the Times: ” It looks like the lawyers are in charge trying too limit their liability. But the damage is much worse to the corporation if they lose in a court of public opinion than if they lose in the court of law”. They obviously did not have a reputational management perspective.

Reputation Management is a trend, not a fad. It is also far more than just company image. Reputation will always supersede image. Can a company for have a good image but a bad reputation? You bet. Look at Apple Computer Inc., which coasted on its good image as long as it could until its reputation for not innovating and producing new products caught up with it.

The reasons have been set out above, but the philosophy is rather simple: Your image was not built in a day, but it can be destroyed in one. Every CEO, company president and corporate public relations executive should begin each day in a very basic way by remembering that Noah built the Ark before
it rained”.

Reputation management is a strategy that is used all year long, utilising a proactive approach, and being proactive is the best crisis preventative. Building a reservoir of goodwill not only greatly reduces the likelihood of corporate crisis, but positively enhances an organisations ability to enter, win and maintain its markets around the world. When Russia and China welcome McDonald’s, it is because reputation, not hamburgers, paved the way. And perhaps that is what Dow-Corning forgot : that credibility is more
important than legal positioning.

So what is Reputation Management?
Reputation management is a proactive and systematic approach to identifying issues that currently affect your company or will affect it within the next 12 to 36 months. Like it or not, your company’s policies and actions are shaped and developed in anticipation of, and reaction to, political, economic, social and technological forces. It is also a process of casting a look internally and examining processes, procedures, policies and issues that could impact and damage the company online reputation. It involves an in depth look at the quality of management, financial soundness, use of corporate assets, community and environmental responsibility, quality of products or services, value as a long term investment, innovativeness, and the ability to attract, develop and keep talented people.

How to build a good reputation
Building a good reputation starts in the boardroom, not with a news release. Your companys good name is based on the development of good policies, not reactive damage control of bad ones. It requires an allocation of your management time and budget and assigning them to your reputation asset. It recognizes that direct and indirect costs of continual reputation damage are unacceptable. It creates a culture where long-term reputation enhancement outweighs short-term expediency. It empowers everyone to ask: If we do this, will it hurt our reputation? It should be noted that Public relations is not reputation management.

Rather, it is an outgrowth of reputation policy. Think of public relations as a mirror on the wall in your home; it reflects what you are. Think of reputation management as the foundation of your house; if it is unsound, your house will tumble to the ground, mirror and all. Regardless of your organizations size, reputation is a senior management responsibility. That does not mean senior managers execute the tactics of reputation, but it does mean they are responsible for reputation policies and the people who work on reputation issues. Assuming the mantel of that responsibility requires an understanding of the foundations of reputation.

The basic foundation of reputation
1. Important decisions by stakeholders are invariably based on trust. Trust is a 2-way process that is based on consistency (After all you expect a Coke to taste the same each and every time), reliability and predictability. It is about being congruent in word and deed. Good reputations are therefore built on good actions and policies that earn stakeholder trust. Before there is any communications, there must be reputation substance. The techniques of modern public relations (or advertising or promotion) are useless and worthless in the absence of substance. Examine your own role as a stakeholder with other organizations, and you will realize that trust is at the core of your product choices. Johnson and Johnson reinforced that lesson in a very special and positive way when several people died after taking Tylenol that had been poisoned? We buy what we trust. And when you invest in a share, you buy what you trust.
Companies such as Waltons and Dimension Data have seen their names appear on the top of the Business Times list, because of their reputation.
2. There is no quick or easy way to have a good reputation. You earn a good reputation over time by working at it. If you want people to regard your organisation highly, that must be a priority to which you allocate time and money, one for which you plan and budget as you would for any aspect of your business. Pay attention to your name. It is written in management literature: ” which does not get inspected, will not be respected”.
3. A good reputation is everyones job, not just managements. The entire organisation must nurture reputation relationships, from the tealady to the distribution clerk. Every action of every person affects perceptions. A careless act by one person tears down the good efforts of many. There are no shortcuts. Everyone has to always ask: “If other people knew what we were doing, would we be able to withstand that scrutiny?”
4. You cannot have good external reputation unless you have a good internal reputation. Charity starts at home. There are multiple reputation stakeholders. First among equals are employees, the front-line troops of reputation. If the folks on the inside do not buy in, how can you expect external stakeholders to think your organization is credible? Your own employees will be vocal about their relationships with your organization – good or bad. If they do not trust you, they will tell everyone, severely damaging your reputation and likely hurting your business in the process. The employees of the organisation can be either negative or positive ambassadors.

5. It may take years to build a reputation but only a moment to destroy one. Just as your next customer order for products is dependent on the quality and timeliness of your last one, a reputation is, more than anything, a reflection of what is perceived right now. There is a saying in show business that ” Every night is opening night”. Yes, it is helpful to have earned a good reputation over time. That can be invaluable for the day trouble knocks at your door. But, you can never let up even for a minute-workout risking all you have built.

A reputation is priceless asset to be protected and managed at all times. “Buildings deteriorate, products malfunction, copyrights expire, but if properly managed, an organizations good name and reputation grow in value with each passing year,” says communications consultant Mary Ann Pires.

What It All Means
First and foremost is that organisations should ensure that the right policies and programs are in place.
You should be telling your organizations story but only once you have determined that there is congruence between internal and external messages. Understanding the need to do that and being able to lead an effective, properly targeted communications program to all stakeholders is the responsibility of every reputation manager.

You may as well assume that your organisation will surely face tough business issues that have tremendous implications for your reputation. You will not spill a million gallons of oil in the ocean, but you may have a
sludge dam that breaks. You will not make a product that causes breast cancer, but you may have an employee die due to hazardous chemical exposure. You will be forced to lay off workers when business is down. You will not sell products that make people sick, but you may sell a product that malfunctions and if you may face what the IBM advertisement example depicted: “If your failure rate is one in a million, what do you tell that one customer” . Each of these examples reflects, at the very least, a serious problem. If
mishandled, each represents a genuine business crisis and a serious threat to your organizations reputation.

Conclusion
There is a clear and present need for you to become sensitized to reputation management, to understand its importance to both your company and your career, and to become comfortable with what you should not expect from this function. It must become a priority, along side marketing, production, legal, financial, and sales issues, so reputation problems never even arise.

A Reputation is like a fragile vase. You can glue a broken reputation back together again, but it will never look the same as it did before you damaged it. What are you doing to preserve, maintain or enhance your companys good name. What do you intend doing in the next 12 months to improve your reputation, your departments or your organisations reputation. Those are the issues. Those are the choices. The ball is now in your court

ACTION JOURNAL
Companies attempting to improve their reputation should adopt one or more of the following steps:
Plan to enhance, build, sustain or maintain their reputation. Assess and rethink from the ground up not only how, what, where and to whom you want to communicate internally as well as externally, but also how to best manage the entire reputational process. The first step in the process is research. You have to find out what your reputation is before you can begin to influence it. Start with a clean slate. Have an in depth look at internal issues including a reputational management audit. Review external impacts and reconcile the two. Prepare a white paper that deals with an objective look at all aspects of the reputation building process.

Remember the effective solution of problems is dependant on a thorough diagnosis.. In the absence of a proper diagnosis, the wrong solutions may be applied. All companies conduct a legal financial audit every year. Why not conduct a reputational audit? Turn the company inside out and address all the factors that contribute to the consumers perceptions of the company.

Set operating standards for the behaviors expected of all personnel. Walk the walk if you talk the talk. Some organisations pay lip service to the reputational management process. If senior executives don’t believe in
and consistently practice reputation building, neither will the troops. Educate management and the workforce through training workshops and using every available internal medium to build awareness of the process.

Remember awareness always precedes behavior change. Sell the message, not the program. Remember it must be an ongoing effort. One-time or sporadic communications accomplish little and may be counterproductive. As with any communication, the key to success is repetition and reinforcement.

The Author: Deon Binneman, CPRP,RAPP is the owner of DB Consulting, a Johannesburg based
management and Public Relations consultancy

Published by Reputation Management in Corporate Reputation Management, Online Reputation Management