How your business can recover from reputation damage
Tuesday, May 16, 2017/
The “walk of shame” that teens like to snigger about has a whole new meaning these days, especially when applied to companies and organisations recovering from reputation damage.
Acknowledgement and admissions
I recently described an email United Airlines sent to me (and many others) apologising for its brutal bumping of a customer from a Chicago flight. As its chief executive Oscar Munoz attested, the company is now in effect doing a big public “walk of shame”, promising no more armed law enforcement officers (except in security or safety emergencies), less red tape, and so on. However, I wonder if they will cease their overbooking practices?
When businesses and government enterprises get caught in some unconscionable behaviour, many do the right thing, admit their wrongs and “atone” accordingly. Usually, compensation is paid, promises and changes in policy and procedure are made, the chief executive fronts up to figuratively be put in the village “stocks” and pelted with anything in reach. But others stick their chins out, refuse to admit their intransigent behaviour is causing reputation damage, and hunker down like the limbless Black Knight in Monty Python’s Holy Grail: “I’ll bite your legs off!”
It’s true that it takes 20 years to build a company’s reputation, and just minutes to lose it. Warren Buffett said that, and he certainly knows what he’s talking about. So assuming your reputation-challenged company isn’t a loony Black Knight, what are some steps toward recovery?
What can you do?
1. Admit your mistake
Some people and organisations do this poorly. They write or say words to the effect that they “regret what happened” (not really), but show few other signs of recognising the effect of their actions. Most of us can spot a Clayton’s apology a mile away.
Show contrition, be graceful and mean it. Hear and feel what the people you affected need you to say.
2. Get real — face the facts
Address the issues that caused your reputation to wobble — the causes, not the symptoms. The stuff your stakeholders (customers) already know about you. The issues employees are bottling up, for fear of losing their jobs. The very inconvenient truths few are willing to address.
3. Address the fundamentals
If, after your stuff-up, you concede that the customer is “king” (or queen), then sometimes this means reshaping company policies to fit their needs. So, for example, not doing a United Airlines-type mixed message: throwing money at passengers to voluntarily give up their seats and leave the flight, and then forcing them off when they refuse.
It takes considerable thought and energy to reconfigure what may be long-established or funky new company policies and approaches, but putting profits before ethics is not going to cut it. Start practising how to deal with future blow-ups, and use this unfortunate experience as your best teacher.
4. Restore credibility
Ask the hard questions and examine external standards and practices, not the internal policies and standards that may have put you in this mess to begin with. Credibility, like respect, must be earned. Ask yourselves, are we really looking into how things can be improved so this major miss-step never happens again?
5. Write about it
Build your positive picture, develop new big positive stories that help when people search for your company name. This is a massive task and cannot be done overnight. Sadly, the internet houses shame effectively.
Don’t let it happen, don’t make it worse
1. Don’t be complacent
Even if your company is currently top of the pops and raking in huge dividends, use the good times to find out what your stakeholders really think of your business, in detail. Access the truth about how the world sees your business. Chances are, there may be some smarties who aren’t that impressed. Get out and do something about how you’re seen in the world, and prepare yourselves for when things may not be great.
2. Don’t be a silo
This means not being closed off from the world, other departments, or whichever other areas happen to be in your orbit. It requires not relying on insiders to tell you how you’re travelling. Cultivate outsiders, even those who’ve vocally asserted that the emperor/empress has no clothes. Social media will do this for you anyway, but you can choose to pursue considered opinions and invite feedback on a confidential basis.
3. Don’t resort to siege mentality
There are often high profile examples in the news. Those people make the mistake of listening to their echo chambers (flatterers and inner-circle types who back-slap and reinforce poor practices on the basis that everyone else is an uncomprehending idiot). Way to go! All the way down to company and reputation oblivion.
4. Don’t distract
Some companies and organisations believe that if they throw a few goodies to customers and stakeholders, all will be forgiven. Er, no. Loyalty is a much-abused term these days.
It’s best to be consistent, consistently good, open to fresh ideas and input, and responsive to people’s needs. Focus on substantial ways that restore you in the public good books. Be 100% committed.
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