They say it is never too late to say sorry, but Thomas Cook’s overdue apology over the deaths of two children in Corfu was so inept it will act as a case study in how not to deal with a corporate disaster. And the resulting social media campaign against the company as a case study in how easily corporate reputation is hammered in the digital age.
The basic tenets of reputation management stress the need to ‘own the problem’ (even if it was created by a supplier), react quickly, over-compensate damaged parties, and communicate effectively to all stakeholders both by apologising and by detailing the company’s intentions to improve.
However in an increasingly complex digital business world organizations need much more than a basic understanding. Underlining this the work at Oxford University Centre for Corporate Reputation focuses on these core themes:
Reputation is relational: firms do not own their reputations – these are owned by others. Corporations and institutions can influence this, but they do not control it.
Multiple reputations: organizations do not have a single reputation; they have a reputation for something with someone, which can mean several different, even competing, reputations. There is no single measure of reputation.
Reputation intermediaries: reputations are influenced in different ways and to differing degrees by intermediaries, including the media, regulators, ratings agencies and professional advisers.
The importance of reputation lies in its signalling power: in the absence of full information, it can create enduring and distorted perceptions.
Reacting effectively after a crisis is just part of the story, organizations need both to build a resilient brand that can withstand reputational damage when crises arrive and to put the leadership structures in place to properly manage reputation in good times and bad.
A recent article in the Centre’s ‘Reputation’ magazine emphasises the increasingly important ‘strategic’ role of the Corporate Affairs function. The role involves a much deeper contribution than the traditional remit of communications engagement, image development and crisis management. It is now being asked to contribute to attracting and retaining talent, winning contracts and advocates, and supporting the long-term goals of the business and its licence to operate.
The article points to five factors that lie behind this:
Governance: organizations are creating new governance structures relating to reputation and organizational values. These changes are a catalyst for the strategic engagement of corporate affairs at board level.
Currency and relevance: highly topical debates around societal impacts, core values, corporate distinctiveness and risk management provide an opportunity for corporate affairs directors to show their value in practical terms.
Metrics: the advances in available metrics – mostly (to date) through media trawling and social media algorithms – show how the function is becoming accountable. This creates a language of engagement that is understood and valued by senior executive/board level colleagues, raising the perceived professionalism and impact of the corporate affairs role.
Language: corporate affairs directors and their teams are professionalising their use of language and narratives. Internally this drives a greater acceptance of their strategic function and engagement, and externally it connects with every stakeholder and helps deliver effective strategic outcomes for the organization.
Research: There is more academic, and non-academic, research available to corporate affairs directors to support the proposition that their function is robust, rigorous and methodical in its approach and impact, and that examines and sheds light on the influences that underpin the multiplicity of external perceptions (a key plank of research at the Centre for Corporate Reputation).
Read the full article in ‘Reputation’ magazine