{"id":633675,"date":"2017-02-16T00:00:00","date_gmt":"2017-02-15T23:00:00","guid":{"rendered":"https:\/\/www.ie.edu\/insights\/latest-news\/articles\/how-to-protect-your-reputation-during-crisis\/"},"modified":"2019-02-06T13:17:32","modified_gmt":"2019-02-06T12:17:32","slug":"how-to-protect-your-reputation-during-crisis","status":"publish","type":"articles","link":"https:\/\/www.ie.edu\/insights\/articles\/how-to-protect-your-reputation-during-crisis\/","title":{"rendered":"How to Protect Your Reputation During a Crisis"},"featured_media":636472,"template":"","meta":{"_has_post_settings":[]},"schools":[],"areas":[16,22,25],"subjects":[],"class_list":["post-633675","articles","type-articles","status-publish","has-post-thumbnail","hentry","areas-competitiveness-growth","areas-sales-marketing","areas-talent"],"custom-fields":{"wpcf-article-leadin":["Corporate reputation is a company\u2019s most valuable intangible asset. Effective communication management can help a company overcome a crisis more quickly and with fewer negative consequences in terms of market capitalization, talent retention, and consumer preference."],"wpcf-article-body":["Crises are no longer atypical; they are structural. During a crisis, the main attribute at stake is trust. Although crisis resolution usually requires companies to adopt operational, commercial, financial, or labor-related decisions, good communication management plays a vital role in ensuring that the company\u2019s image stays clean and avoids irreversible damage. More than economic sanctions, criminal liability, or damage to the company\u2019s image, crises always entail very deep feelings such as fear, insecurity, and rage.\r\n\r\nAll companies know\u2014or should know\u2014their weaknesses and vulnerabilities. With these factors in mind, they can outline a crisis prevention and management plan that will allow them to minimize the impact of a difficult situation that could cause them to lose the trust of key stakeholders, be they investors, consumers, or employees. Companies must anticipate and prepare for the worst-case scenarios, understand who their key audiences are, and be ready to convey the right messages to them.\r\n\r\nWhen confronted with a crisis\u2014like Samsung, which had to recall mobile phones because of battery issues, or Volkswagen, with its diesel emissions scandal\u2014companies face various challenges, including communicating in a way that minimizes the negative impact. In any crisis, there is a trigger, usually preceded by warning signs, which you have to be able to interpret. The warning signs are followed by the explosion, the \u201cfire,\u201d and usually a search for someone to blame. Throughout these processes, there are red flags that you must react to. For such a response to be possible, all members of the organization should be alert to signs of a problem that is likely to worsen. Take the example of McDonald\u2019s. Whenever pamphleteers, squatters, or anti-system protesters proliferate in a particular area, the multinational takes action because it understands that these developments can presage the occupation of its establishments as a show of protest against the capitalist system.\r\n\r\nIn times of crisis, we are continually in contact with all of our audiences. Communication allows us to manage, in real time, our efforts to listen, engage in dialogue, and tailor our messages as events unfold. You have to be able to decode stakeholders\u2019 expectations. During a crisis, the natural tendency of business managers is to assume that problems will subside on their own or to focus exclusively on the customers, neglecting other audiences such as government bodies, unions, the media, consumer associations, and even competitors.\r\n<blockquote>During a crisis, the natural tendency of business managers is to assume that problems will subside on their own or to focus exclusively on the customers.<\/blockquote>\r\n<strong>Reacting with empathy<\/strong>\r\n\r\nSilence is not a good choice. If something can be found out, it will be. And if it\u2019s bad, it\u2019s best for people to hear it from you. Denial is only a valid option if everything is false. Shifting responsibility doesn\u2019t work, either: \u201cblaming the dead\u201d generally breeds distrust. What about confession? By itself, it\u2019s not enough to resolve a crisis. People will forgive a mistake, but they won\u2019t tolerate lies. If a company or institution shows that it reacts to a crisis with empathy (understanding its audiences), diligence (solving the problem), and honesty (taking responsibility), it can emerge stronger.\r\n\r\nIt\u2019s important to distinguish crises from issues and potential conflicts. A crisis often has an \u201cowner\u201d: a brand, a protagonist\u2014someone who is blamed or expected to respond. With issues, however, ownership tends to be shared by multiple players. Who owns the problem of global warming? Crises are usually solved from within, endogenously, whereas issues require a collaborative response involving public-private alliances across multiple sectors. Crises generate a reactive response, whereas issues require a more proactive approach.\r\n\r\nWhat should you do before a crisis hits? There is no single exact strategy, but there are various plans that can prevent such a situation: conducting a risk audit, writing a crisis-management manual, monitoring the issues that affect the sector and the entity in question, and having an experienced, well-trained crisis team or committee in place beforehand.\r\n\r\nCrisis prevention, management, and resolution make it possible to address a potentially adverse situation more effectively. Because crises give signals that allow us time to prepare, it\u2019s best to conduct an analysis to identify the risks, determine how serious their consequences could be, and decide how likely these adverse events are. This is known as a risk audit: you rank the likelihood of the various scenarios and prioritize your angles of attack. It\u2019s common, though impractical, for crisis committees to lock themselves into a self-analysis that leads them to view the problem differently from the way society sees it.\r\n\r\nCrises are living things, so you mustn\u2019t stop listening. The team tasked with addressing the crisis on the company\u2019s behalf must be predefined and have a particular profile. The team should be composed of people with different backgrounds, including corporate players\u2014especially lawyers and communications professionals\u2014as well as technical specialists who are accustomed to dealing with crises of that particular sort and ready to deploy the necessary arguments. The team should also include someone who thinks about the market and the customers. All these angles can and should be represented on the crisis committee. In any case, executive management must absolutely be present, because the team needs to be able to make decisions.\r\n<blockquote>During a crisis involving consumer products, you have to get on television and talk to people on an emotional level, rather than using scientific arguments.<\/blockquote>\r\n<strong>Identifying risks<\/strong>\r\n\r\nCompanies need to identify risks in order to minimize them. This is especially true in the case of publicly traded companies. Investors want to know what the company will do in the event of a situation of financial, operational, strategic, or liability-related risk. The company I work for operates in 20 countries in different time zones. At least once a quarter, we find ourselves dealing with a coup, a currency devaluation, or an election\u2014some source of uncertainty that affects us\u2014somewhere in the world. Besides that sort of thing, each company or institution faces its own intrinsic difficulties\u2014crises that are foreseeable, or at least occupy the realm of the possible (personnel adjustments, mergers and acquisitions, problems with product quality, etc.).\r\n\r\nGiven this reality, companies design contingency plans that are practically conceived in real time. Therefore, it\u2019s more important to have internalized dynamics and behaviors, plus teams of people with sensitivity and vision who are able to raise red flags when they detect issues that could be prelude to a crisis.\r\n\r\nHow can we learn to manage bad news? I think our \u201cpatients\u201d want to hear it straight. It\u2019s good for them to hear the diagnosis, so that they can start working through the same dramatic, multi-stage process that real patients go through: denial, anger when they realize it\u2019s serious, negotiation, depression, and finally acceptance.\r\n\r\nCrisis management has to do with emotions, not facts. In this field, there are \u201ccold\u201d media that speak to your brain\u2014newspapers, online media\u2014but there are also \u201chot\u201d media\u2014radio, television\u2014that target your heart. During a banking crisis, people expect to see the news in the financial newspapers. Everything changed the day that financial institutions\u2019 problems made the leap to TV news and talk shows. That\u2019s when we all started talking about preferred stock and evictions. The banks were uncomfortable with that change, because it forced them to deal with \u201chotter,\u201d more emotional media\u2014the kind that transform feelings into behavior.\r\n\r\nTherefore, during a crisis involving consumer products, you have to get on television and talk to people on an emotional level, rather than using scientific arguments that only reach the \u201ccold\u201d media consumers who use their head to understand the information. Nowadays, people don\u2019t question most information; they retweet and share their feelings. In times of crisis, this dynamic works against brands.\r\n\r\nIn my view, the spokesperson during a crisis should not be the person who knows the most about the subject. It should be someone with expert credibility but who knows how to get a point across and explain things using examples. In a difficult situation, you need to transmit very simple messages: the sensation of control and communication carries much more weight than what is actually being said. After a plane crash, it is more important to focus on details such as the airport of origin and the emergency procedures in place (medical care provided, patients taken to the hospital, support for family members, etc.) than to make premature guesses about things like the cause of the accident and the definitive passenger list. Conveying an image of control is crucial to building trust. Any hypothesis that is ultimately contradicted by reality will destroy your credibility.\r\n<blockquote>In a difficult situation, you need to transmit very simple messages: the sensation of control and communication carries much more weight than what is actually being said.<\/blockquote>\r\n<strong>New online risks<\/strong>\r\n\r\nThanks to the Internet, there\u2019s no such thing as time limits. The media are constantly generating content, and guidelines and criteria regarding the sensitivity of communication teams need to be established. Because there is no longer any downtime, information and decision-making are not focused on a single person but on a group. Nevertheless, the basics of crisis communication are essentially the same in online and offline media. In online media, things move faster\u2014sometimes at dizzying speed\u2014but the most important thing is still to listen and understand your audiences. Thanks to social media, you can do this very quickly.\r\n\r\nAfter a crisis, you have to analyze what\u2019s been done and control the damage to the company\u2019s reputation. Moreover, a truly large-scale crisis can cause aftershocks\u2014like an earthquake\u2014so people suffer more because they know what can happen again. After a crisis, the authorities ramp up their inspection measures in the affected sector, and irregularities usually emerge. The media and consumers are hypersensitized, and even those who are used to dealing with risk (pilots, machine operators, key decision-makers) become more nervous, increasing the likelihood that mistakes will be made. After a crisis\u2014accident, spill, fire, product contamination, etc.\u2014the combination of these factors often leads to new aftershocks, to which the public generally overreacts.\r\n\r\nOne final recommendation: don\u2019t lie. In a crisis, everything comes out eventually. You can control the information and the pace at which it is released, but you must never lie. And remember that it\u2019s very important to cater to your company\u2019s internal audience\u2014the first ambassadors of peace or conflict. Peer-to-peer communication is much more credible than communication through any media outlet.\r\n\r\n&nbsp;\r\n\r\n\u00a9 IE Insights.\r\n\r\n&nbsp;"],"wpcf-article-extract-enable":["1"],"wpcf-article-extract":["By <strong>Miguel L\u00f3pez-Quesada<\/strong>. Corporate reputation is a company\u2019s most valuable intangible asset. Effective communication..."],"wpcf-article-summary-enable":["1"],"wpcf-article-summary":["Crises are now a structural concern for companies. It is therefore advisable to develop a plan for preventing, managing, and resolving crises while protecting the company\u2019s reputation. In the prevention phase, it can be useful to conduct risk audits, analyze potential conflicts in the sector, and create a crisis committee. When the crisis hits, it is important to react with empathy, solve the problem, and take responsibility. The spokesperson during a crisis must be able to convey an image of control and speak clearly to people on an emotional level, rather than using scientific arguments. Social media can also be useful for listening to and understanding various audiences. You can control information, but you must never lie."]},"_links":{"self":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles\/633675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/types\/articles"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media\/636472"}],"wp:attachment":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media?parent=633675"}],"wp:term":[{"taxonomy":"schools","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/schools?post=633675"},{"taxonomy":"areas","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/areas?post=633675"},{"taxonomy":"subjects","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/subjects?post=633675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}