Reputation plays a major role in businesses’ survival. Just look at the fallout for Facebook when news broke in 2021 about an internal study showing the negative impact of Instagram on teens’ mental health. The stock price plunged 20 points after the whistleblower report. The term “brand tax” began circulating, referring to the negative impact that this backlash had on Facebook’s other brands.
Reputation risk and brand tax aren’t just big business issues; they can play a huge role in stunting growth for small businesses. Seemingly small decisions can grow into large issues, which can lead to losing key staff, crippling a company and causing potential partners or collaborators to look elsewhere. Maintaining a reputation should be a long-term focus for businesses of any size.
5 Strategies To Help Protect Your Reputation
After more than 30 years of helping companies respond to crises, here are some of the most important lessons I’ve learned about how to protect their reputations.
1. Be proactive.
A clear plan of action for crisis response should always be on your mind. It’s like a fire escape plan—if the house is burning, you want to know how to get out safely. For example, a PRSA study looked at repairing cruise liners’ reputations during the pandemic. It found that proactive crisis planning led to an increase in positive media coverage—up to 60%—and eventual returns of pre-pandemic rider levels.
You don’t want to do all reputation risk management when you’re in the thick of it. Scrambling will just make it harder to overcome the situation. So engage a crisis counsel before you need one by having your legal team figured out, your PR firm kept in the know and your human resources department close by.
2. Know how to recognize a crisis.
The definition of a reputation crisis may differ from business to business. To determine whether you’re in one, there are some common factors you can look at. For example, is it a situation where you’re calling your PR, HR or legal teams regularly to discuss it? Is an issue happening with one of your stakeholders, and does its backlash have the potential to negatively affect your business?
Failure to recognize a crisis can quickly exceed internal resources, and being overly defensive slows down the reaction time. Look at what is happening realistically and move quickly to enact your crisis response plan.
3. Think before you speak.
Sometimes, saying the wrong thing is worse than saying nothing. The ability to respond appropriately—or fail to do so—will be noted by both clients and the public. Since a verbal blunder will just add more work for you and your team, pause and contemplate thoroughly. Clear, concise messaging obviously benefits your ability to move forward as you can avoid backstepping or having to defend your words. This helps maintain trust with your clients or customers.
4. Understand the real financial consequences.
Progress stalls in a crisis, which impacts time, productivity and demand for products and services. Long-term costs can linger, impacting business long after the news cycle moves on. Further, your market value is, in part, based on reputation. According to a 2020 study by communications firm Weber Shandwick, 63% of executives say reputation defines their market value, while nine in 10 responders said reputation was important to their board of directors.
Reach out to your insurer to determine whether they cover losses based on reputation. Most plans just cover lost revenues, but we know the long-term financial impacts are deeper, like losing board members’ trust, needing to stall upcoming projects and negatively affecting growth.
5. Set and reset expectations.
Carefully think through and communicate the expectations you have for the business. Reputation risk is created when set expectations aren’t met. For example, if you can’t meet your customers’ needs, be proactive about changing expectations to be realistic. You should sit down with your teams, talk about your goals and lay out how to achieve them. Then, it’s important to continue meeting and discussing goals so you’re always prepared for change.
Even with your best efforts, it’s impossible to predict a potential reputation crisis. That’s why being prepared and proactive is vital for your business. Don’t wait until the last minute to engage your response team, and don’t lose focus in the long term because you’re trying to find a quick solution. With these pieces in place, you won’t be caught off guard when the reporters call.