Linda is the President/Founder of Relations with the general public in Portland, ME, has a master’s in leadership and is nationally accredited in PR.
Reputation plays a major role in the survival of businesses. Just look at the fallout for Facebook when news broke in 2021 of an internal study showing Instagram’s negative impact on teen mental health. The stock price fell 20 points after the whistle-blower report. The term “brand tax” started floating around, referring to the negative impact this backlash had on Facebook’s other brands.
Reputational risk and brand tax are not just big business issues; they can play a major role in hindering growth for small businesses. Seemingly small decisions can escalate into major issues that can lead to the loss of key staff, crippling a company and causing potential partners or collaborators to look elsewhere. Maintaining a reputation should be a long-term focus for businesses of any size.
5 strategies to help protect your reputation
After more than 30 years of helping companies respond to crises, here are some of the most important lessons I’ve learned about how to protect their reputation.
1. Be proactive.
A clear plan of action for crisis response should always be in your mind. It’s like a fire escape plan – if the house is on fire, you want to know how to get out safely. For example, a PRSA study looked at repairing the reputation of cruise ships during the pandemic. It found that proactive crisis planning led to an increase in positive media coverage—up to 60%—and eventual returns to pre-pandemic ridership levels.
You don’t want to do all the reputation risk management when you’re actually there. Crashing will just make it harder to overcome the situation. So engage a crisis advisor before you need one, keeping your legal team, your PR firm in the know, and your HR department close at hand.
2. Know how to recognize a crisis.
The definition of a reputational crisis can vary from business to business. To determine if you are in one, there are some common factors you can look at. For example, is it a situation where you are regularly calling your PR, HR or legal teams to discuss it? Is there an issue with one of your stakeholders and does their reaction have the potential to negatively impact your business?
Failure to recognize a crisis can quickly overwhelm internal resources, and being overprotective slows down response time. See what’s really happening and move quickly to implement your crisis response plan.
3. Think before you speak.
Sometimes, saying the wrong thing is worse than saying nothing at all. The ability to respond appropriately – or fail to do so – will be noticed by both customers and the public. Since a verbal mistake will just add more work for you and your team, stop and think thoroughly. Clear and concise messaging definitely benefits your ability to move forward, as you can avoid backtracking or having to defend your words. This helps in maintaining trust with your clients or customers.
4. Understand the real financial consequences.
Progress stalls in a crisis, which affects time, productivity, and demand for products and services. Long-term costs can linger, affecting business long after the news cycle has passed. Furthermore, your market value is partly based on reputation. According to a 2020 study by communications firm Weber Shandwick, 63% of executives say reputation determines their market value, while nine in 10 respondents said reputation was important to their board of directors.
Contact your insurer to determine if they cover losses based on reputation. Most plans simply cover lost revenue, but we know the long-term financial impacts are more profound, such as loss of board member confidence, the need to block future projects, and the negative impact on growth.
5. Set and reset expectations.
Think carefully and communicate the expectations you have for the business. Reputational risk is created when set expectations are not met. For example, if you can’t meet your customers’ needs, be proactive about changing expectations to be realistic. You need to sit down with your teams, talk about your goals and determine how to achieve them. Then, it’s important to keep meeting and discussing goals so you’re always prepared for change.
Even with your best efforts, it is impossible to predict a potential reputational crisis. That’s why being prepared and proactive is vital to your business. Don’t wait until the last minute to engage your response team and lose focus on the long term because you’re trying to find a quick solution. With these pieces in place, you won’t be surprised when reporters call.
The Forbes Business Council is the premier growth and networking organization for business owners and leaders. Do I qualify?
Follow me I tweet or LinkedIn. Look my page.
Leave a Reply