We are living in the year of elections, watching as leaders strive to rise to positions of power and authority across the world. And once the ballots are filled, and the votes are counted, we all watch as idle bystanders as our new leadership springs to action.
But we all know how fine the line is between strong and poor leadership, and how the consequences of the latter can impact everyone. Ironically, when we don’t like the political decisions made, or their implications, we waste no time voicing our concerns, yet when we don’t agree with a business decision, we rarely challenge our company leadership. But what if that same company leadership is the one responsible for our bad corporate reputation?
Sometimes during business as usual and our daily tasks, we forget the role leadership plays in corporate reputation. When things go sideways, the easiest solution is to call your communications agency – after all, they’ll fix it with a wave of a magic wand, right?
As much as we love to go above and beyond for our clients, there is a limit to how much we can “fix” once the deed is already done. The unadorned truth is, the best crisis outcomes stem from companies that take a proactive approach to reputation, and its protection. This doesn’t mean having procedures in place and solidifying them with practice prior to an event, though this is a critical element of preparation. This means considering reputation on a strategic, decision-making level, which is the responsibility of the leadership.
Contrary to popular belief, successful crisis outcomes – that save reputations – begin with decision making that is ethical and responsible in nature. When leaders fail to fully think through the decision being made, balancing all competing interests, that’s when major reputation faux pas happens, and you will have seen this happen time and time again.
David Cameron, whilst UK Prime Minister, decided to hold a referendum on the UK’s membership in the European Union, to prove he was right and the “Remain” side would win. In 2014, General Motors delayed recalling vehicles with a defective ignition switch that could cause engines to shut off unexpectedly. This was later linked to at least 124 deaths and ended up costing the company $900 million in settlements, and an immeasurable amount in reputational damage. Not to mention, most of us were personally impacted when Facebook allowed Cambridge Analytica to gather the data of millions of users, which was later used in political advertising and propaganda. To save everyone time, I won’t even delve into BP…
The latest being Starbucks, who mass rolled out their newest business strategy, the mobile “order-ahead” system, offering customers an easier way to get their morning cup of coffee and their employees a streamlined process, a win-win for all. Little did they know, it caused high demand, not expected by employees, leaving baristas overworked and offering a less-than-optimal customer experience.
Now Starbucks has, to quote Forbes, tossed out CEO Laxman Narasimhan, “like a poorly made latte” amid sharply declining sales and mounting pressure from investors.
I am sure every one of these leaders had reasons for the decision they made. Some may have even embarked on their said journey with the intention of bettering their company. But the question remains, were any of these decisions responsible? Did the leaders weigh agendas and make choices that were truly ethical, thoughtful, and considerate of the wellbeing of all stakeholders? The bottom-line is that accidents happen, and incidents come and go, whether you have a bad reputation or not. The companies who navigate crises successfully are the ones who can, after a mistake or failure, clearly articulate why they came to the decision they did in the first place, and why they genuinely believed this was the best course of action.
Even if it turns out to be the wrong decision, and stakeholders may not forget, if they understand your reasoning they are more likely to forgive. More so, your company coming forward during turbulence, showcasing they initially took the time to fully consider their actions, demonstrates transparency and accountability, securing the most important bridge we call trust.
Ultimately, the only way for an organisation to have long-term, sustainable competitive advantage in the form of reputation, is by practicing responsible decision making at leadership level, before anything ever happens.
It’s always a great idea to use your communications agency as an ethical sounding board if you aren’t entirely sure which decision to make.
