How Do You Keep Your Company’s Reputation Intact When Your Industry Has Been Tainted By Bad News?
1. How Should We React?
*(a) Don’t waste time. “When we got word of the peanut butter situation, we asked all our vendors with peanut-relayed products where their ingredients came from. When they told us Peanut Corporation Of America, we pulled it off the floor and started calling shoppers immediately.”
**(b) “You need to speak out publicly and take a position. You have to engage lawmakers, public officials, and the media. Last year Siemens paid big fines for bribes. Its competitors should have come out and stated their own anti-corruption principles.”
***(c) “The first thing a CEO needs to understand is whether there’s actual culpability or if they are a victim. The company is always presumed to be guilty, Which I fully reject. If you are innocent, go on the offense and don’t apologize if you didn’t do anything wrong.”
2. Should I Delegate Responsibilities Or Take Charge?
*(a) “It needs to be top-driven, but there are clear procedures in place that enable our staff to make a decision. We let our chief executive know, but we don’t wait to move forward — he wouldn’t want us to hesitate if someone’s life was at risk.”
**(b) “If your your company deserves some of the blame, your CEO needs to face reality. CEO’s often go into denial, and that’s the worst thing they can do. It’s a huge mistake to hire a PR firm and ask it to restore your image. The CEO’s job is to take the lead in restoring it.”
[Our comment: One tactic in restoring one’s image online is to use the internet, social media and blogosphere to position their response. The CEO takes the lead, but will not have trained staff who understand and specialize in online reputation management. Hence, this is usually outsourced to companies such as ours.]
***(c) “CEO’s must become chief crisis officers. Given the choice between a good leader and a good plan, you want the leader. Jeff Immelt has been candid about GE Capital. Rather than offering stilted PR-speak, he’scalling it like it is.”
3. What Works And What Doesn’t?
*(a) “After an E.coli scare ten years ago, we cewated a system that lets us use membership data to find who purchased a product at a particular time. When we learned of the peanut butter, we called 1.8 million folks.”
**(b) “BP had a tragedy in 2005 when 15 people were killed in an explosion at its oil refinery in Texas. After that, Exxon, where I serve as a board member, set out to reinforce its own safety procedures by reaching out to employees and managers at each of its facilities.”
***(c) “Don’t overrespond. Tyco did a great job when they were embroiled in the Dennis Kozlowski scandal. They realized their customers weren’t the public, so they strategically focused their crisis-management plan on specific groups, like government-procurement officials.”
*(a) Craig Wilson, AVP, Food Safety, Costco Wholesale
**(b) Bill George, Former CEO of Medtronic; Professor, Harvard Business School
***(c) Eric Dezenhall, CEO, Dezenhall Resources
To revitalize their corporate reputations, senior U.S.executives will have to rethink their priorities and heed the messages of consumers the world over. They will need to listen closely to the concerns of their stakeholders, demonstrate authentic care for their communities, commit to a shared set of values with their employees — and stand behind these beliefs even at a cost to short-term performance. That’s the only way they can develop enduring, sustainable, value-creating results and restore their corporate reputations.