“Criticism is not a crisis, but it can turn into a crisis”, says Melzi, on the importance of having trust and credibility with stakeholders – Photos: Gladstone Campos / Especial RF
Being at the forefront of high-impact organizations amid the escalation of Covid-19 was an unprecedented challenge, especially for managers who were at the epicenter of the pandemic. Reputation Feed interviewed Rogério Melzi, one of these leaders, to address the perspectives for 2023 in the light of reputation and its contribution to companies, the economy and society.
With the ability to transit through different sectors, especially the essential ones, such as education, in addition to health, Melzi experienced the worst moments of the health crisis from inside hospitals, then as CEO of Hospital Care, a holding company that manages health management services. integrated that operates in several cities in the country.
Today, Melzi contributes as an adviser to Hospital Care, Cyrela, and +A Educação. In this interview, he tells how he faced the pandemic and the impact on the reputation of the services he commanded, what he thinks about the positioning of leaders and companies in these times of social networks and how ESG is on the agenda of the councils, among other topics:
“If (reputation) cannot be an asset at certain times, it can at least protect against unavoidable day-to-day operations. Before you are condemned, crucified or written off, your stakeholders can speak for you when something happens that is out of your control.”
What are the challenges for 2023 and how can reputation help companies in this scenario?
We have to divide the challenges into at least two categories. A complicated economic side and a polarization that is not trivial. There is also an expectation that, more and more, companies will take a stand on things that perhaps they should not take a stand on. To make matters worse, there is a growing confusion between the individual and the legal entity. It's a pressure cooker without limits. In this context, reputation, at the very least, is a shield. if (reputation) cannot be an asset at certain times, it can at least protect against things that tend to be unavoidable, normal day-to-day incidents of an operation. Before you are condemned, crucified or written off, your stakeholders can speak for you when something gets out of hand.
“The company that manages to stay on the sidelines of controversial issues tends to be more victorious because it can focus on its attributes”
How should companies deal with the expectations of stakeholders for positioning on issues, which are often controversial, in society?
Ideally, the company that manages to remain on the sidelines of controversial issues tends to be more victorious because it can focus on its attributes, on what it does for society. At the same time, there are universal values that everyone must uphold. With racism, there is no tolerance. And it's no use talking, you have to live it intensely. If you live intensely in an organizational culture that does not tolerate racism, you will not need to speak out, because others will speak for you: your employees, your customers, the people who interact with you. And now we are seeing a new complexity in the figure of the entrepreneur. As much as everyone has the right to a personal life, how much of what is done in the individual will be transferred to the brands that the person represents? Even the consumers themselves are learning how to deal with all this, because it is not possible that people want to spend their lives researching whether a certain entrepreneur prefers A or B to know whether or not to buy the product of the company to which he is linked. I understand that in the case of the company it is different. When the company takes a stand, it engages society. Then, yes, the consumer has to make his judgment.
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Thinking about your trajectory in the areas of health and education, for example, did you consider reputation as an asset to be taken care of?
I have been working on an idea of stakeholder balance for a long time. During the pandemic, for example, as a health worker, I couldn't think about financial results or shareholders, especially in the health area. The balance was completely on the assistance side. But this cannot last forever. At some point, the balance has to be restored. And you have to know how to explain it to people. We need to know how to talk about these things in the most transparent way possible.
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“At that moment, we were able to maintain an open dialogue with the students. And I could only do that because we had spent the good years building a good reputation for the brand and the people we led through our actions.”
Is it possible to list in this trajectory some points of reputation that contributed to leverage the business?
I can speak from my experience in the education sector, which was greatly affected in the 2014 crisis, when the government cut the Fies (Student Financing Fund, Ministry of Education program designed to finance higher education). Students had difficulties, and education companies needed to speak out. At that moment, we were able to use the credibility that had been developed with these stakeholders, students, teachers and even public agents. We were able to maintain an open dialogue with the students. I spoke with the students, recorded videos explaining what and how to do it and also how we tried to solve the situation. And I could only do that because we had spent the good years building a good reputation for the brand and the people we led through our actions. This example is very vivid and involved thousands of people.
“When a stakeholder comes out publicly in his defense it is very good. This is the most wonderful thing that can happen when it comes to reputation.”
And what was the learning?
There, it was proved that we need to work on reputation in the boom years. When a problem happens, and it usually happens at the worst time, your customer, your pool of collaborators and shareholders will always be there. When a stakeholder comes out publicly in his defense it is very good. Criticism is not a crisis, but it can affect you and become a crisis. So when you have an unfortunate episode, and it's publicly reported, your audience will defend you. This is the most wonderful thing that can happen when it comes to reputation. Even though the company has to take a stand, and it will almost always have to take a stand, it comes out of it very strengthened.
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“We spared no resources. This is an example. What's the result? Several of our hospitals have won awards from their cities for their action during the pandemic.”
In the pandemic, from a reputational point of view, what were the lessons learned? There, everyone entered a situation of extreme vulnerability and you were on the front line. What's left of learning?
Thinking about health, I experienced the pandemic in hospitals, without being a doctor. I didn't stop working on any day, I didn't have Covid and I went to all the hospitals. This was a non-standard crisis. We made magic, we had a lot of structure. There were 12 first-line hospitals (in 2020-21). At one point, he said to the financial director: 'it just can't go bankrupt'. Shareholders understood. In those months, especially in the second wave, we spared no resources. This is an example. What's the result? Several of our hospitals have won awards from their cities for their action during the pandemic. These great crises are compared to a war. You have a great opportunity to make a difference with courage. This account is big, because it takes many months, years, to rebalance from an economic point of view. In the long run, it's really good for you.
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“Success will come from the way you engage your audiences”
Is this decision to choose the long term positive?
In the vast majority of times, success will come from the quality of management, strategy, positioning, but it will come from the way you engage your audiences. In the long term, it is possible to clearly show that, at certain times, we need to be more focused on one public and, at other times, on different stakeholders. This generates credibility, which allows, in moments of peace, to be on good terms with most of its audiences. This is the role of management. But, if you live in a short-term environment, and you don't have a backing of investors and controlling partners, it's very difficult, and you end up making decisions that favor a certain public too much. For me, sustainability is a friend of the long term, it has difficulties in the short term.
How much reputation is on the boards' agenda, and what is the board's role in building and preserving the company's reputation?
On the agenda of the councils, there is more ESG. Some, encamp. Others, like Natura, which was a pioneer, made it an advantage. And there are still those who will do it because they have to. What I call reputation is broader, it is much stronger when there is a concern of a founder or a second generation in preserving a legacy, a history, and not leaving achievements behind. It's stronger than when you have a financial or capitalist investor or when you've already gone to the stock market and let it spread.
Christianne Schmitt is editor of the Reputation Feed and Lucia Ritzel is a journalist, consultant mr. and Head of Content at ANK Reputation
christianne.schmitt@ankreputation.com.br
lucia.ritzel@ankreputation.com.br
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not to lose:
Jorge Gerdau Johannpeter is the next and last interviewee in the 2023 Perspectives series
