BUILDING REPUTATION RESILIENCE BEFORE A CRISIS - Ipsos
BUILDINGREPUTATIONRESILIENCEBEFORE ACRISISIpsos Corporate ReputationDate: August 2020 Ipsos Building Reputation Resilience Before A Crisis August 2020 Public Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential
INTRODUCTION: BUILDING REPUTATION RESILIENCEBEFORE A CRISISHow do you prepare for a crisis like no other? What unifies companies that survive and thrive when disasterstrikes? One thing is clear; the role of corporate communicators in building resilience has come into sharpfocus in 2020. The COVID-19 pandemic is undoubtedly one of the biggest crises in a generation.Organisations soon earnt plaudits for their response to the crisis, fast springing into action to supportcustomers, communities, suppliers and their employees. Other organisations across a range of sectorsadapted supply chains to support frontline workers in the fight against the virus. From personal protectiveequipment (PPE) production to hand sanitiser, organisations from a diverse range of industrial sectors rapidlyswitched production to join the fight against the virus, often in the face of plummeting revenue as lockdownscame into force.Havaianas and parent company Alpargatas temporarily repurposed and adapted their factories in Brazil tomake protective equipment for healthcare professionals. In March, RBS quickly converted the conferencecentre at its Gogarburn HQ into a food bank and charity hub, staffed by RBS volunteers, to support localcharity initiatives.However, some organisations eroded reputation and business value through wrong-footed responses or theCOVID-driven exposure of business practices that fell short of public expectations. As the pandemic evolves,more corporate crises will no doubt come to the fore. However, corporate scandals have never been far fromthe headlines. Well-publicised crises over the years shed light on what makes for a successful resolution to acrisis and the responses that destroy business value. Aside from effective responses during a crisis itself, ourexperience consistently shows that organisations that have built up strong reputations are better able toweather the storm than those who’ve neglected to nurture their reputations and align their behaviour withstakeholder expectations.So, what can organisations do to build reputation resilience to protect themselves in times of crisis? We’vedrawn upon the experiences and perspectives of the Ipsos Reputation Council, which is made up of over 150senior corporate communicators from some of the world’s largest organisations to understand best practice inreputation resilience. Based on conversations with our members, we’ve identified five essentials that we canshare. Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential1 Ipsos Building Reputation Resilience Before A Crisis August 2020 Public
1. UNDERSTAND AND INVEST IN STAKEHOLDERRELATIONSHIPSA programme of consistent, flexible and meticulouslyplanned corporate communications and stakeholderengagement is crucial. An organisation’s ability torecover from a crisis relies on the goodwill andpositive relationships it has fostered among a broadrange of stakeholders. Over half (54%) of ourmembers see this as one of the top two determinantsof reputational resilience.This structured approach to stakeholder engagementis about investing in relationships of trust. This goesbeyond just confidence that a company will keep itspromises and be reliable. It requires an element of‘active’ trust, demonstrating to stakeholders that itbehaves responsibly, that it is open and transparentand that these attributes emanate from the top.Perhaps most importantly, businesses need tounderstand stakeholder’s expectations and developfeelings of mutuality among those who impact theirlicence to operate. This means delivering sharedvalue and ensuring stakeholders know that thecompany has their best interests at heart. Reputationvalue will quickly erode if stakeholders feel they’ll betaken advantage of.To understand stakeholders, and build trust andgoodwill, organisations need to understand who theirstakeholders are, what they think, and what impactthey can have on the business. This enablescommunications resources to be targetedconsistently and effectively over time.Making this happen requires engaged employees.Reputation Council members routinely highlight theimportance of employees as a lynchpin stakeholdergroup for reputation building. If employee behaviourand culture do not align with the values youcommunicate, building trust and reputation resiliencewill be impossible. In the words of one ReputationCouncil member:If there is a dichotomy between what you say andwhat you do, you are going to come a cropper.So, in the end, the messaging has to beauthentic and the stories have to be authenticand if you are saying one thing and doinganother you will end up in Private Eye, which is abad thing. Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential2 Ipsos Building Reputation Resilience Before A Crisis August 2020 Public
2. MONITOR AND MANAGE REPUTATIONAL RISKMany Reputation Council members see issuemonitoring as a key factor in their ability to respondeffectively and appropriately when issues arise,especially if an issue has the potential to become acrisis. Indeed, one in five Reputation Councilmembers believe that every issue must be treated asa potential crisis.Members have many tools in place to monitor andmanage issues and recognise how to distinguishreputation ‘turbulence’ from genuine crises. Crisismanagement ‘bibles’ and playbooks providestructure to guide a response to a crisis, but alsohelp separate minor issues from more seriousproblems. One example of this is a reputation riskmatrix. This allows communicators to determine theimpact of an issue relative to its importance to thebusiness which then helps them respondappropriately.“We put anything we can imagine on that riskmatrix and we assign different portions of ourbrain space, people and resources to thedifferent risks.It is reasonably rare, not unheard of, butreasonably rare that something happens that is amaterial reputation event that wasn’t foreseen onthat matrix.”Reputation Council member Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential3 Ipsos Building Reputation Resilience Before A Crisis August 2020 Public
3. RESILIENCE BEGINS AT THE TOPIt has become increasingly clearthat reputation management is aboard-level concern; 93% ofmembers agree this is the case.Furthermore, a majority ofReputation Council membersregard strong leadership as oneof the most important factors inresilience.In the UK, for example, theexpectation that reputationmanagement is a key part ofcorporate governance is reflectedin the Companies Act.There are now requirements forcorporations to show how theyhave considered the views of keystakeholders and how this hasinformed their decision making.Importantly, the tone needs to beset by leadership that drivesconsistent behaviour andengagement with the values anorganisation communicates bothexternally and internally.To build credibility and improvereputation, it’s vital that there isn’ta gap between what a companysays and what it does at a seniorlevel, as well as among rank andfile employees.The COVID-19 pandemic and anincreased focus on diversity andinclusion, thrust into the spotlightby the Black Lives Matterprotests, has brought corporateauthenticity into sharp focus. Thegrowing enthusiasm for ESGinvesting is also a further catalystfor real action from industryleaders.Senior leaders are increasinglyexpected to demonstrate theytake issues such as theseseriously, and are at the forefrontof positive, authentic change atthe organisations they lead. Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential4 Ipsos Building Reputation Resilience Before A Crisis August 2020 PublicWe are now seeing whether theambition to serve allstakeholders, as agreed by the180 CEOs in last year’s BusinessRoundtable, is simply spin or thenew reality.The latest crises have givenleaders the opportunity toshowcase authentic, purpose-ledcorporate governance, withCEOs such as Unilever’s AlanJope and Goldman Sachs’ DavidSolomon taking a lead on theseissues.58% of ReputationCouncil membersthink leadership isone of the mostimportant factorsin resilience.
4. THE KEYSTONE OF RESILIENCE IS A STRONG REPUTATIONWe know from our research that a strong reputationprovides myriad benefits. It drives stakeholderadvocacy, underpins bottom-line behaviours such aspurchase intent, advertising believability andconsumer recommendation. It helps to attract theprospective employees that enable a company todeliver on its promises.relationships of trust are in a much better position toweather crises when they arise.Stakeholders are more likely to listen to anorganisation’s point of view, give it the benefit of thedoubt or offer support when it is needed if they trustit and have a strong sense of mutuality with thatorganisation.In the case of crisis management and reputationalresilience, organisations that have built largereserves of goodwill with stakeholders, based onDefinitely believe negative infoProbably believe negative infoProbably give benefit of the doubtDefinitely give benefit of the doubtHowever, there are no short-cuts to a strongreputation. From the smallest organisations to largeconglomerates – aligning promises with delivery isno mean feat. Internal communications need to alignwith internal behaviour. External communicationsneed to be realistic and mirror the externalbehaviours that underpin stakeholder experiences ofa company. In short, organisations need to ensurethere isn’t a gap between what they say and whatthey do. One Reputation Council member referred tothe advice that Steve Jobs gave his CEO:5“What you do is either a brand deposit or abrand withdrawal, and you need to have a lotmore brand deposits than brandwithdrawals. The simplicity of that is, theconsumer will give you the benefit of thedoubt if you have been making consistentbrand deposits.” Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential Ipsos Building Reputation Resilience Before A Crisis August 2020 Public
As noted by a Reputation Councilmember, ‘you can’t communicateyour way out of a crisis youbehaved your way into’. Indeed, itis often in cases where anorganisation’s measurablebehaviour is at odds with what itsays to the world where mostreputational damage occurs.The current pandemic isuncovering many examples, suchas sub-optimal workingconditions in factories being insharp contrast to promises ofrewarding jobs and zeitgeistdriven HR policies. Other currentissues, from #MeToo and#BlackLivesMatter provide dailyreminders that manyorganisations haven’t put theirmoney where their mouth is,leading to social media stormsthat chip away at reputationvalue.Crises also enable organisationsto make changes for the better.Learning from mistakes and usingcrises to course-correctprocesses and behaviour canstrengthen reputation in the longterm.Crises outside organisationalcontrol – such as the pandemic –also provide an opportunity torethink long-term reputationbuilding strategies. We recentlyspoke with Reputation Councilmembers on their views on thepandemic and it is clear thatmany communicators are seekingto learn from corporate responsesto the challenges of COVID-19 torethink their communicationsplanning.The pandemic is also shining anew light on the role of corporatecommunications as a keybusiness function. There isincreased recognition of theimportance of well-planned,professional internal and externalcommunications as companiesnavigate the crisis and its fall-out.The way we behave andengage with stakeholdersduring the crisis is going toreframe how we’re perceivedwhen we come out of it.Reputation Council member6 Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential Ipsos Building Reputation Resilience Before A Crisis August 2020 Public
5. IF THE WORST HAPPENS COMMUNICATEOrganisations that seek to obfuscate and avoid blame for crises rarely come off well. Some of the besttextbook examples of companies that have overcome crises are those that took responsibility for a situation,communicated clearly and often with stakeholders and strived to mitigate impact on their stakeholders andcustomers. Often, it requires a trade-off between the approaches sometimes recommended by lawyers toavoid financial liability (often being that an apology could be seen as an admission of guilt) and the potentialloss of business and reputation value should an organisation get its response wrong – particularly when thereis a risk to life or deaths have already occurred.We also know from our research with key stakeholders such as MPs and Business and Financial Journaliststhat admitting responsibility, acting with openness and transparency and being straight with people is how themost impressive companies recover from reputational issues. In an era where information travels fast, andmisinformation even faster, this very much seems like common sense.CONCLUSIONOrganisations that seek to understand their stakeholders, invest in these relationships, manage risk and havea clear roadmap for reputation building are likely to be in a strong position to successfully deal with criseswhen they arise. Combined with strong leadership, when a crisis hits, organisations will be prepared to takeownership of a situation and most importantly will have a receptive stakeholder audience that can help themnavigate through tough times.We recently presented at PRWeek’s Crisis Communications Conference – content can be found hereFor more information about our work on reputation management and resilience please get in touch.Thomas Fife-SchawResearch Director, Ipsos Corporate sos.com @IpsosReputation7 Ipsos Doc Name Month Year Version # Public Internal/Client Use Only Strictly Confidential Ipsos Building Reputation Resilience Before A Crisis August 2020 Public
it and have a strong sense of mutuality with that organisation. "What you do is either a brand deposit or a brand withdrawal, and you need to have a lot more brand deposits than brand withdrawals. The simplicity of that is, the consumer will give you the benefit of the doubt if you have been making consistent brand deposits."
FRM:SG2.SP2 Establish Resilience Budgets FRM:SG2.SP3 Resolve Funding Gaps FRM:SG3 Fund Resilience Activities FRM:SG3.SP1 Fund Resilience Activities FRM:SG4 Account for Resilience Activities ; FRM:SG4.SP1 Track and Document Costs FRM:SG4.SP2 Perform Cost and Performance Analysis FRM:SG5 Optimize Resilience Expenditures and Investments
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