The management of corporate reputation is facing unprecedented challenges in the digital age. The internet and social media are being used in increasingly sophisticated ways to share ideas, draw attention to issues and to mobilise public opinion as never before. Anyone can now broadcast their views instantly and globally, and greater expectation for transparency sees companies facing growing scrutiny by regulators, activists and NGOs, customers and employees.
Years can be spent building a strong brand and yet its reputation can be shattered in a single moment in one sweep of online comments, and many companies still fail to understand the damage that poor online reputation management can do to their business, choosing to be reactive rather than proactive in protecting their brand. If you still think your online presence is secure it may be time to reconsider.
Digital technology has “democratised the conversation, massively changing the corporate reputation landscape”, says Andrew Grant, founder of leading financial communications advisory firm Tulchan Communications. “Anyone from anywhere in the world can now talk publicly and visibly about a company and it only takes three or four retweets for something to cause considerable reputational damage. Unfortunately it is often the dissatisfied that speak the loudest.”
The relationship between the power of social media and a brand’s overall reputation has been experienced by many businesses, as Ed Coke of The Reputation Institute, the world’s leading research and advisory firm for reputation, explains: “A great example of this is Ryanair, the Irish low-cost airline. The company has a well-documented resistance to enhancing its reputation, and arguably continues to suffer from online campaigns such as ‘I Hate Ryanair’. Although our research shows that Ryanair regularly underperforms when indexed against the reputation of other companies, this consumer perception is formed from direct experience and mainstream media as well as social media.
“In Ryanair’s case, since it has begun to focus more on reputation management over the past few years, we’ve seen improvements in its position,” he adds. “Typically, the more negative social media campaigns against brands are in response to inauthentic actions undertaken by companies, with Twitter Q&A sessions such as #AskSeaWorld or #BeachBodyReady from Protein World recently prompting backlashes.”
Interestingly, but in no way linked is United Airlines, which experienced this first hand in 2008 when it broke the guitar of singer/songwriter Dave Carroll. The ensuing customer service disaster, during which Carroll tried unsuccessfully to win a claim for his instrument, resulted in him writing a song, producing a music video and sharing it online via YouTube and social media.
‘United Breaks Guitars’ spread rapidly and to date has received more than 14 million views. A Google search of the term ‘United Breaks Guitars’ brings more than two million results and it is estimated that within four days of the video being posted online United Airlines’ stock price dropped 10 per cent, costing its stakeholders around $180 million.
“All it takes is one major issue to destroy a reputation,” says Samsung’s European Communications and Digital Director, Greg Dawson. “There are constant threats to any organisation and you’ll find numerous examples of brands that have been highly successful only to be derailed by a single crisis.”
And it’s not just the sharing of information that poses a threat to corporate reputation. There has also been an alarming rise in cyber-crime. “Companies must be aware that there are organisations out there with the sole purpose of sourcing public information about them, collating it and damaging them or gaining a competitive advantage,” says Tulchan’s Andrew Grant.
Energy company Shell was the unwitting recipient of a ‘cyber hijack’ in 2012. In an elaborate hoax from Greenpeace and The Yes Lab a fake website, Arctic Ready, was created along with Twitter and Facebook accounts designed to increase awareness of Shell’s contentious Arctic drilling programme.
The full-blown online assault used social media, online video and gaming to publicly humiliate the company. The accompanying ‘Let’s Go!’ campaign used a series of adverts including a picture of its Noble Discoverer drilling rig, which had suffered an earlier incident, with the caption ‘Let’s Hit The Beach’.
“There is now widespread acceptance that reputation, good or bad, has a tangible impact on business and organisational performance,” says Kate Hamilton-Bailey, Head of the Corporate Communications Practice at Odgers Berndtson. “Top talent in this field must be both strategic and intellectually agile. Good judgement still remains key. The best are able to see the bigger picture and develop a long-term integrated plan, as well as being able to make decisions quickly under pressure and at pace, understanding multiple viewpoints and communicating through numerous and varied channels.”
Effective reputation management relies on identifying risks and assessing their magnitude. According to Samsung’s Dawson the company has a reputation management programme that comprehensively addresses every aspect of the business. It includes daily news and media monitoring for short-term/crisis response; weekly cross-functional reputation; monthly reputation meetings incorporating proactive programmes; and a quarterly reputation leadership steering group involving the European CEO and reviewing performance of the existing reputation management programme.
In doing so Samsung creates an ongoing dialogue with its customers on what they expect from the business, not just regarding products but also Samsung as a company. It uses this insight to develop communications programmes accordingly. It’s a strategy that is clearly working. The company jumped from 43rd in 2011 to tenth place in 2014 on a list of the world’s most reputable companies, collated by The Reputation Institute.
Incorporating your online or digital presence into any reputation programme is essential, as Joanna Manning Cooper, Director of Marketing and Communications, England Rugby 2015 and previously Head of PR/Media for LOCOG, Organising Committee for the London 2012 Olympics and Paralympic Games, explains: “London 2012 was the first truly digital Olympic Games and Paralympic Games – Games in the Twitter era.
“We had a fully integrated digital and social media strategy and plan, and a dedicated digital team responsible for building our web and social media platforms, developing content, and monitoring social media,” she adds.
“It’s vital to have an online reputation management plan that operates in real-time, monitors opinion and responds or rebuts appropriately.
“We built an integrated communications strategy and plan that was shared by all our stakeholders and drove our communications and PR throughout the build-up to the games. Proactive campaigning and communicating all our milestones and stories was underpinned by the need to build confidence in the Organising Committee and keep the public updated on all elements of the large, complex Olympic project.”
Sporting events such as the Olympics perfectly illustrate the global nature of online reputation management. What is said about you today in London, for example, can impact your business around the world tomorrow. Similarly, certain practices that are acceptable in one region, such as poor labour conditions, can be quickly picked up and shared to generate negative PR.
Aldo Ligouri, Global Corporate PR Director of public Japanese retail holding company Fast Retailing Group, based in Japan, elaborates: “It’s vital to understand the cultural sensitivities of a particular region, whether it’s religion, politics or education. In Japan, for example, corporate reputation severely influences how customers think and act towards a business. Japan has a very high level of appreciation for quality unlike any other I’ve worked in. For Japanese customers anything of low or questionable quality is looked down upon, which is particularly challenging for companies entering the Japanese market.
“Consequently we spend considerable time understanding the importance of reputation, particularly online,” he adds. “In Japan there is a high sensitivity to news, both digital and via more traditional media and it can carry significant weight for a business. It’s important to consider that regardless of the fact that we are headquartered in Japan we are a global company and it’s vital that we respond and react quickly and transparently to balance any negative press.”
David Webber, Partner in the Odgers Berndtson Brussels office responsible for EU and public affairs assignments, believes that a strong focus on government affairs and lobbying can act as an insurance policy that helps to mitigate risk and safeguard reputation. “Everything is now instant and global, and transparency is the new rule,” he says. “Government affairs professionals need to be closer to the core of the business and talking directly to the CEO and board in order to implement rapid and global actions in a transparent manner that is both credible and legitimate.”
If companies are fully prepared to engage with their online reputation and take a proactive approach then there are significant opportunities to be found, as David Crundwell, SVP Global Head of Corporate Affairs at Thomson Reuters, argues: “We need to stop talking about ‘digital’ or ‘social’ as if they are special; they are now the norm. Quite simply it is much easier to manage reputational risk effectively today than it was in the past because multiple channels give multiple online options. Being successful requires access to great data, a decisive mindset and a real empathy for your audiences globally.”
“Reputation can actually be seen and managed by numbers in the digital age,” adds Samsung’s Dawson. “There are tools that manage it by the second and provide visibility through a five-year programme, for example. Companies can be in control of their online reputation by having the correct monitoring, reporting and management team to review and respond.”
For Tulchan’s Andrew Grant, managing reputation is “essentially about performing against expectations. You need to ensure that the market understands your business and that you can instil confidence in the abilities of the management to deliver. I advise identifying the expectations of all parties that you deal with and actively ensuring that your reputations and actions meet those expectations.”
Meeting expectations? It sounds simple. The truth is that with the correct strategies in place it is possible to manage your reputation in the digital age. Companies need to work hard to take control of their online brand identity; monitor social media and use them accordingly; be transparent and always act professionally; and ensure it’s an approach taken from the board room down. Never underestimate the cost of a poor reputation. Whatever the size of your business or the sector you work in, people are talking about you right now. If you think it’s something you can ignore it’s time to think again.
Lucy Harding and Pieter Ebeling, Partners in the Global Procurement and Supply Chain and Consumer...
Lucy Harding and Pieter Ebeling, Partners in the Global Procurement and Supply Chain and Consumer...