I want you to travel back through time to 2005: imagine yourself at a busy London underground station shoulder to shoulder with other commuters. As a train draws in you hear a commotion and notice that an elderly gentlemen is being given a very hard time by a member of staff. He’s shouting at him aggressively, swearing and seems to be threatening him. Other people see what’s going on and raise their eyebrows or tut quietly to themselves. It’s an unpleasant incident that’s over quickly, but it may warrant a watercooler conversation or a mention over dinner that evening. But that’s the end of the story. Travel back through time to 2009 and the same incident occurs, but with a very different outcome...
But even worse is possible than the damage suffered by BP and News international.Some businesses fail to survive at all:Arthur Andersen was one of the world’s most respected and successful professional services firms.Its involvement in the Enron scandal resulted in its closure.It has over 100 civil suits against its name because of Enron and it has gone from employing 85, 000 people worldwide to around 200 today, most of them handling law suits and presiding over the orderly dissolution of the company. Its reputation was so badly tarnished, that no company wanted Andersen’s name on an audit. It was too severely damaged to continue.
More recently, we have witnessed the extraordinary chain of events in London at Rupert Murdoch’s News International newspapers which has:Led to the closure of the UK’s biggest selling newspaper, the News of the World..a brand which was 186 years old, closed overnightLed to wide spread criticism from Parliament, all 3 political parties, every other media outlet, celebrities and even the Church of EnglandSelect Committee enquiry ultimately prevented News Corporation from completing its takeover of BSkyB... In the short to medium term anywayCost the jobs of up to 200 reporters, and several senior executivesEmbroiled Britain’s PM in the scandal (Andy Coulson hire)Resulted in a brand which is now widely described as “toxic”Also damaged associated brands and organisations: the police; other newspapers; politicians; private investigators; Press Complaints Commission....will lead to regulation, wrongdoers will go to prison and a different monitoring of the media....political knee jerk reactions often follows reputational eventsEvents being monitored aggressively in the US..An organisation which was seen just a few months ago as impregnable, and being courted by politicians of all persuasions is now on its knees – all because of the mishandling of an issue at one of its business units..which has now wrecked a scheme intended to transform the company and no longer free to develop in the way it had planned to, nor necessarily under the leadership it expected. Lose strategic direction and leadership plus political regulation, law suits ....loss of public faith etc....loss of suppport for the brand....
A quick case study to show what I mean about being authentic to the brand.
Through poor communications and poor operational handling of the disaster....
Leadership, reputation and trust in an era of total transparency
Leadership, reputation and trust in an eraof total transparencyJonathan Hemus, Insignia CommunicationsMarch 2012
The new context for leadership andreputation Lack of trust Death of deference Greater scepticism Increased transparency Expectation of swift and expansive communication A loss of control Demand for authenticity
Death of deference “There are two trends: decline in deference and the rise in the importance of word of mouth. People have a much lower level of deference in experts [and] in government information. They are much more convinced by independent information and word of mouth. “Spin is a huge issue for people. It comes up spontaneously in a way it wouldnt have done a few years ago” IPSOS MORI research, 2007
Death of deference “Rather than risk alienating millions of social media users by trying to turn it off (which I’m not sure is even possible) surely the way to address social media is to better understand it, and look at ways to use it to our benefit” Superintendent Mark Payne, West Midlands Police
Demand for authenticity “ What the hell did we do to deserve this? April 29, 2010 ” “ The Gulf of Mexico is a very big ocean... the amount of volume of oil and dispersants we are putting into it is tiny in relation to the total water volume. May 14, 2010 ” “I think the environmental impact of this disaster is likely to be “ The first thing to say is I’m sorry… we’re sorry for the very, very modest… May 18, 2010 ” massive disruption it’s caused their lives. There’s no-one who wants this over more than I do. I “Of course I can (when asked May 18, 2010 ” if he could sleep at night...) would like my life back. May 31, 2010 ”23
Succeeding in the new environmentThe value of trust is at an all-time high – build and nurture itExpect your every move and every word to be public knowledgeEmbrace the opportunities that social media providesPlan for the challenges that social media bringsEarn reputation; don’t create an imageEverything you have done to build reputation will be put to thetest when crisis strikes
Leadership, reputation and trust in an eraof total transparencyJonathan Hemus, Insignia Communicationsjonathanhemus@insigniacomms.com@jhemusinsignia0786 832 9102