Image and reputation crises occur when there is shake in confidence by the direct stakeholders of a company or leader, which can also negatively affect the perception of public opinion broadly.
Normally, the image and reputation crises occur by tangible reasons, such as operational failures or accidents and also in the delivery of a good or service. However, increasingly, the origin may be intangible, based on the reaction to controversial comments from a corporate leader that become public or to a controversial position taken by the company itself on topics beyond business, related to behaviors, values and worldviews.
In general, the public repercussion of the fact determines the severity damage to image and reputation. A digital technology, especially social networks, increased the frequency of image and reputation crises and enhanced its effects, because the repercussion tends to be faster and more far-reaching.
An image and reputation crisis can cause:
Revenue reduction: customers may stop purchasing products and services, in addition to promoting “boycotts” against the company.
Loss of investments: fund managers and private investors want to distance themselves from companies with shaken confidence or negative public exposure, both to avoid having their name linked to the organization with problems and because of the effect on the growth of the business it manages. There are also impacts on participation in public competitions.
Legal problems: actions filed by customers, suppliers or partners directly or indirectly negatively affected by the occurrence.
Hiring and retention costs: the most talented professionals with the most career opportunities carefully evaluate the reputation of the company they choose to work for.
Loss of social license to operate: when there is a severe breach of a community's trust or public opinion in relation to a company or brand, its operations may become unfeasible, leaving no other option than to close its activities.
The importance of crisis management
When crises are well managed, with a strategy to contain and mitigate damage, wear tends to be mitigated. With efficient incident management, the company is able to communicate assertively with strategic audiences and regain credibility.
Crisis management requires taking quick decision and forceful action to contain the crisis – both from the point of view of the triggering event and communication with stakeholders. For this reason, the company needs to have a pre-approved crisis management strategy and the ability to execute it quickly, at the appropriate time. Hence the importance of professional monitoring throughout the entire cycle of the incident, from identification of the crisis to its complete overcoming.
Risk management and crisis management
Risk management is a control and prevention process while crisis management is a containment strategy. Both are part of a single company preservation strategy, but have own processes and timings, as well as requiring different skills from the professionals who execute them.
A risk management begins with the correct mapping and classification of risks and those responsible within the company, as well as the choice of a approach to treating each risk. It is important to remember that a crisis was already a risk ignored or poorly managed.
How to manage an image and reputation crisis
Professional crisis management in a Oorganization concerned with its reputation, with the preservation of the brand before stakeholders and with the future of its legacy requires measures such as those listed below:
- Definition of crisis management governance, with the installation of a crisis office, with clarity of authority and able to take action as soon as triggered
- Authorized Spokespersons speaking on behalf of the organization, technically prepared and with communication skills
- contingency plans for updated key risks
- Communication plan segmented by audience
- Strategic and institutional positioning content pre-approved and updated
- Monitoring press coverage, on social media and proprietary channels
In a crisis, the company must act to take control of the narrative to clearly inform stakeholders and avoid distortions and misinformation that could worsen the situation. This includes acknowledging faults, being empathetic, and apologizing.
A time of crisis may also be when the company puts its spokespeople. If these organization representatives are prepared and aligned, aware of the key messages For now, it is worth evaluating whether it is appropriate to involve the institutional or technical area. And, above all, be clear about the best time to place the nudemere 1 of the organization on the front line, exposing it or preserving it.
O communication timing it will depend on the severity of the crisis and the company's level of preparation in the PR area, responsible for internal and external communication and for ensuring image and reputation. But be careful: precipitation can worsen the crisis, while a delay can give the impression of omission.
This is the time when decisions need to be made based on rigorous monitoring of the evolution of facts. And they must be based on an appropriate stakeholder map. Even though a reputational crisis is multi-stakeholder, it is necessary to consider who is relevant at each specific moment and how to keep them informed.
The right time to discontinue actions
The damage caused by a crisis do not disappear immediately and, if not treated properly, they remained only in a latent state, serving as a negative reinforcement argument in the next crisis.
The post-crisis reputation reconstruction strategy foresees initiatives whose results need to be evaluated over time. Among them are emergency actions to regain trust and bonds with priority stakeholders. There is also a need to actions for relationship and positioning with a wide range of audiences and society in general.
The moment is also ripe for reflecting on what were the main triggers for the crisis to occur. Another important issue is evaluating which measures need to be taken preventively and which points should be reinforced in communication. One final report with conclusions and lessons learned is essential as a source of consultation and support for mitigation plans, so that the company is better prepared in the event of new crises.
