Presidential Apologies

Lately, it seems to me that every day brings a different teachable moment to those of us worrying about reputations and communications. Recently I had been following the heartfelt tweets of CEO Tony Fernandes of AirAsia. 

Yesterday's acknowledgement by President Obama about not sending someone more senior to the Paris peace rally last Sunday was the right thing to do. I had wondered myself about how this could have happened while being glued to the television set. It made me wonder about the discussion the communications team must have had with the President about sending a higher-ranking individual to attend the march while all those world leaders were taking center stage. Do you say something that you think can potentially harm a boss's reputation or do you let it just slide (hoping nothing harmful happens in the end)? Hopefully the former. President Obama's spokesperson Josh Earnest took the message to the people yesterday by saying, “It’s fair to say that we should have sent someone with a higher profile to be there." Although I assume that he was talking about the royal "we" and that the President approved the statement, it was not an outright apology which would have started with "We regret..." Instead, what we got was more a statement of fact. Despite the misstep, the acknowledgement was honest and swift and may have slowed the criticism to some degree. I thought it was good that the President admitted he erred and showed he could be wrong and could change course. Some leaders would have been insistent that the individual sent was high enough and what was all this commotion. I also learned while reading about the error that Obama had visited the French Embassy in Washington DC last Thursday to sign  a condolence book which made me feel better in the end.

A Reputation Recovery

The title of the article says it all, "Sailing through a scandal." Rupert Murdoch and his empire have turned the corner on reputation recovery. As you recall, News Corp was engulfed in scandal over the phone-hacking of a murdered schoolgirl's voicemails. According to The Economist where I found this fascinating article, the Murdoch family has recouped more than double their wealth since the controversy. And Murdoch's sons who are running the now split businesses of entertainment and newspaper publishing are doing just fine. 

What hit home was the article's truthful statement that "a loss can turn into an unexpected win." That is so true in reputation recovery. I've researched and studied the reputation recovery phenomenon for a long time now and if there is one clear thread, it is that crisis morphs into opportunity. There is nothing like a scandal or reputation disaster to make a company even better than it once was. Better leaders are put in place, tough decisions are made, humility returns to the C-suite, and less risky business behavior takes hold. No one wants any further embarrassment to harm the reputational equity of the firm.

The articles says, "The Murdochs’ happy ending is a reminder of how forgiving the corporate world can be if bosses at the centre of a crisis act swiftly and adopt shareholder-friendly policies." True. How a company responds to crisis is the ultimate test and like they say, first impressions matter. But as the article also points out, if Rupert had been a hired hand at an ordinary company, he would have been shown the door.

The Economist ends the article by saying, "Being enriched by scandal may occasionally happen once, but rarely twice." As it happens, that is not entirely true. Many companies stumble after a major crisis because of all the distractions that ensue. It is even more likely, not less likely, that a company will re-dent their reputation after a major crisis. Additionally, media scrutiny is more intense afterwards and journalists and pundits will pounce on any missteps. Granted, the stumble may not be as devastating as the first one but doubt gets raised and before you blink, there are no more do-overs.

Cybersecurity reputational risk

Just recently heard that our first US homeland security chief Tom Ridge is helping to launch an insurance product that specializes in corporate cyber security policies. In the article, I read that the global economy has lost more than $400 billion annually due to these cyber breaches that seem to be coming at us like a tsunami. Moreover, only one in four companies, if that much, have some form of cyber attack coverage.

I also learned awhile back when we did our Employees Rising survey on how employees were using social media to champion and possibly sabotage their companies, that one of the reasons that companies have chosen to train their work forces about being responsible social citizens was to caution them about how cyber hacking often occurs. And that is from employees themselves who can be unintentionally loose with passwords, clicking on errant links or not understanding well enough the safeguards of protecting confidential documents. Again, another reason for formal social media training at work and recognizing the importance of internal employee communications. 

Cyber breaches are clearly hurting the reputations of companies that find their customer data let loose online from hacking. This has become a major reputational issue and one that companies have to get smart about or they will be joining the ever growing long list of the largest data breaches. Plus the background stories in the media often reveal that companies and their leaders had some forewarning or were lax about privacy controls which only makes matters worse. Need I even add that CEOs have lost their jobs over cyber breaches! This is becoming a reputational issue of epic proportions.

How Incivility Dashes Reputation & Sales

Incivility can hurt reputation and harm sales. With the holiday season upon us, we took a deeper look at our research on Civility in America to better understand the connection. No surprise, the research shows that consumers react negatively toward businesses that exhibit incivility. With early reports showing slow sales this holiday season, companies need to ensure that front line representatives are on alert to deal with consumer's incivility and their own short-temper-ness. It happens. We are human. But consumers don't want to just take it anymore. They have too many choices. A businesses' reputations is at severe risk when an interaction is discourteous and disrespectful. Why would anyone go back to a particular store or buy something online when they can't get a reasonable answer from customer service or are treated poorly? Our survey provides the proof that people turn away from businesses when incivility is out of bounds. They tell their friends and family and the online community quickly takes note. Looking at this research from another angle, just think how ultra-civil behavior can make a difference. If a business is on civility steroids, wouldn't that make you want to shop there more often and tell friends and family online and off. It could make all the difference between an okay holiday season and an off-the-charts one for some. Plus it could super-charge your company reputation. Just check out these stats below. 

Civility in America 2013: Corporate Reputation Edition, Weber Shandwick

Civility in America 2013: Corporate Reputation Edition, Weber Shandwick