Reputation Management Not Needed… Until It’s Needed

Poet Robert Burns is widely credited with the phrase, “The best laid plans of mice and men often go astray.” Relating this phrase in a business context, it stands to reason no matter how much a company orchestrates activities and executes its battle plans—high-impact mistakes happen. However, in an age of over-optimization, and marketing and communications cost-cutting, “soft stuff” such as brand management, press relations, crisis communications and the like are often shelved or discarded in favor of “just-in-time” strategies. Indeed, reputation management isn’t needed … until it’s needed.

In an article from “The Observer,” John Naughton wonders in amazement at how society ever managed without the Internet. Naughton ponders a world without Google, Skype, instant messaging, and online bank accounts. And while the Internet has created boom for most of us, the rise of social media hasn’t been sweet ambrosia for all companies. In fact, with social media and Internet technologies, now company decisions and actions are mostly public, including those of front-line employees. Now, actions that happened last week, last night, or 10 minutes ago can be broadcast across the globe in seconds, creating very dangerous challenges for company branding and reputation efforts.

In the Financial Times article “Perils of a Tarnished Brand,” authors Morgen Witzel and Ravi Mattu notice that even the most scripted and orchestrated product launches can go haywire. And even when “best-intented” marketing plans are well-executed, companies can be exposed to the ramifications of their daily operational and strategic decisions (e.g., Google in China and BP). “What affects reputations, in turn affects brands,” the authors point out.

Every employee is a brand ambassador, and brand management is no longer simply the purview of marketing managers. Even the best branding intentions can go awry when actions don’t back up corporate speak, say Witzel and Mattu.

Of larger concern however, is marketing cost-cutting trends in the name of efficiency that potentially leave brands and reputations exposed.

Robert Mabro, Honorary President of Oxford’s Institute for Energy, describes this problem in a letter to the Financial Times. He writes, “(Companies) no longer want to employ specialists in soft matters, such as political issues and the like. When an accident occurs, they find themselves hopelessly unprepared. This of course (ends up) destroying shareholder value!” Moreover, economist John Kay sums up the problem quite succinctly, “Yesterday’s cost-savings are so often today’s corporate crisis.”

One potential solution is for companies to invest more in “softer matters” like brand, reputation, crisis and risk management. Undoubtedly, some of these considerations are tough to justify in an age of narrow return on investment marketing calculations such as cost per lead.

However, Internet and social media technologies that transmit events, news and crisis accounts—at the speed of light—aren’t going away. To succeed in such an environment, companies must invest in the softer functions mentioned above even when “payback” doesn’t appear imminent.

It’s difficult to forecast all types of crises that could occur. A much better plan is preparedness. Is your company up for the challenge?

Related: Financial Times “It Pays to Expect the Unexpected

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