From outrage to integrity: How businesses can recover from reputational crises 

Reputational crises can be positively overcome depending on how proactively and sincerely issues are responded to and strategically managed 

How businesses can recover from reputational crises

The vast majority of businesses are extraordinarily poor at protecting their reputations, seeking to rely on the hierarchical, the superficial, and the cynical. And when they find themselves in their stakeholders’ crosshairs, it takes them all too long to rebuild trust – if at all – much to the detriment of the bottom line. Nevertheless, reputational crises can be positively overcome.

The times we live in perfectly lend themselves to conflict involving businesses. Local issues rarely remain isolated; what happens over here can become an issue over there. Similarly, regional issues can create local problems. In addition, stakeholders are now ever-more demanding of what they expect from businesses in response to the seismic changes we are now encountering. There are even times when businesses encounter outrage that is not of their making.

Nevertheless, for businesses to thrive after a reputational crisis, as a consequence of something they have walked in to or from something of their own making, often depends on how proactively and sincerely issues are responded to and then strategically managed. 

Beware the scorned

In response to seismic change, organisations have poorly adapted or even rarely appreciated that adaptation is necessary. They have left themselves susceptible to reputational crises.

What has worked well for years now seems fragile. Where before organisations could impose new projects or operational activities on say, affected communities, stakeholder groups, even staff, people are no longer so accepting. Where before, the communication or spin from businesses was trusted, people may now view this as cynical and manipulative.

What I constantly see are those that generally find themselves at reputational ground zero are rigidly hierarchical businesses. They don’t appreciate that what contributed to their success in the past is now an obstacle. The hierarchical culture continues to be reflected in many ways, ranging from the style of the business’ leaders through to the way that people outside the business are treated. That has huge implications before and during a reputational crisis as hierarchical businesses value the internal voice of the organisation rather than that of those affected. We know what is best. 

This mentality is often reflected in project plans or Gantt charts where engagement with the affected is towards the end of the project and tick-a-box in nature. To make things worse, hierarchical businesses value control, meaning they remain unresponsive to the concerns of the angry. 

I see this constantly. Certainly, there are high profile examples at present like the water utilities, the post office scandal or internationally, Boeing. However, there are crises everywhere at various scales. 

And yet, businesses are poorly prepared for a reputational crisis. Imposition, unresponsiveness, and resistance to concerns remains the strategy. As a consequence, the impacts for organisations can be significantly adverse. 

Contract cancellation. Adverse attention from the media and regulators. Disengaged staff. Costly delays to meeting milestones that can stretch out into months and years. Make no mistake, it never ceases to amaze me the number of affected people who will, essentially, put their lives on hold while they seek to ensure that the relevant businesses like your own pay. 

Nevertheless, if businesses think strategically and with empathy, they can move past these draining ordeals. 

From ground zero to hero

There are several levers that need to be pulled for a business to mend and then rebuild its reputation. Many of those revolve around shifting strategically to a stakeholder-centric mindset.

That is a big step: not a customer-centric mindset, but a stakeholder-centric mindset, contemplating how your operations impact upon your most influential stakeholders. Whether they are customers, regulators, membership bodies, or even community individuals, it doesn’t matter. 

That may mean changing your processes to reflect a stakeholder-centric mindset. That might mean changing your structure, particularly at a management team level. That might mean specific training that you provide your staff. It certainly means re-shaping your business strategy, culture, and inherent leadership style. Even your business model.

It certainly means sharing control, collaborating with these influential stakeholders in rebuilding and managing not only your business’ reputation, but also on strategies or programs where they share a common goal with you. “What do you think about this? What do you believe are the key issues over here? And how do you believe they can be resolved?”

I can hear the common response to that already. “Why should we change and be more proactive and responsive when they have been unfriendly and said such bad things about us in social media? They can be so unreasonable.”

The answer is simple. If you wish to move on, if you wish for your business to be viewed in a positive light, and if you wish for your business to thrive in this age of uncertainty, you have no choice. In my experience, your opponents are often very reasonable people who are expressing very reasonable concerns.

Yet, there is so much upside to the approach. An authentic stakeholder-centric mindset not only is necessary if your business’ reputation is to recover from a crisis, but involving people who have similar goals – but from different perspectives – can, importantly, also drive the identification of innovative solutions to big issues as well as innovative new services and products. 

But first, rebuilding must commence somewhere. It requires listening – and listening deeply – to concerns and being truly responsive. It requires sincerely expressing the hardest phrase of all to them: “I’m sorry.” And it requires being understanding, humble, and curious.

For recovery to be successful, it requires you to acknowledge that what has worked well in the past for your business may now be an obstacle. It requires you to take ownership.

David Ross
David Ross

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