Reputation is top of mind for every corporate communications exec these days. As Dan Tarman, managing director for Burson-Marsteller's corporate/financial practice, puts it,
"Restatement, SEC investigation, corporate malfeasance and insolvency are just a few of the nightmare scenarios that nearly all communicators have had to contemplate during these
past few months."
PR NEWS asked Tarman and Mark Weiner, CEO of Delahaye Medialink, to give us their thoughts on today's environment of unyielding corporate scrutiny. Tarman and Weiner are two of
our expert presenters for "Measuring the Impact of PR on Your Bottom Line and Reputation" on Aug. 13 (see page 5 for more details).
Dan Tarman
While the heightened scrutiny of corporate activities is without precedent, companies facing potential challenges should arguably adhere to an enduring set of communications
principles to protect and manage corporate reputation. Communications should be imbued with one overriding objective in mind: keeping key stakeholders on board by establishing
confidence that management is effectively addressing the issues, and that the interests of the specific audiences are being protected.
In the case of a Silicon Valley telephony equipment manufacturer that recently faced a major financial restatement, one of the most immediate imperatives was to dramatically
reduce its workforce. This translated into layoffs impacting more than 800 of the company's 1,000 employees through several waves.
During this process, it was crucial to manage perceptions among the remaining employees so that they continued to carry out the mission of the company. To accomplish this, the
company implemented a communications plan that included:
- Town hall meetings;
- Weekly company-wide email updates from the CEO;
- A two-way anonymous electronic feedback mechanism for the workforce;
- Message delivery training for all department heads; and
- Regular department meetings with smaller groups of employees.
- A team of key senior managers met weekly to calibrate the communications.
In this case, while the communications activities were effective, the company's long-term viability is still far from assured. Nonetheless, there is little doubt that the quick
action by management to communicate to employees enabled the company to continue to serve customers, generate revenue and perhaps survive.
By employing this type of effective internal communications, companies send a message of strong leadership through turbulent times. Through a stringent effort to create open
lines of communications with all stakeholders, companies will be well on the road to maintaining (or re-establishing, as the case may be) perceptions of credibility, trust and
transparency.
Mark Weiner
Now more than ever, a good corporate reputation is an asset to be treasured. Like any other asset, reputation should be carefully managed for positive growth and to minimize
risks during down times.
In "normal times," companies with good reputations enjoy benefits over those companies with a stain on their reputation: Employees are more likely to be attracted and retained;
customers are more likely to buy their products and services; and regulators are more likely to grant their approval. In contrast, companies with poor reputations, especially
those that earn their status as a result of bad behavior, are mercilessly punished, some to the point of destroying the company altogether.
What this suggests is that a company's strongest defense during difficult times is a healthy reserve of "credits" in its reputation account. Reputation can be monitored in ways
that provide both a current reading as well as a strategic plan for the future. Investments in reputation research and evaluation are a hedge against unforeseen downturns as they
provide the insight needed for continual improvement...money in the bank in this analogy.
Many crises come suddenly and overwhelmingly. Others are created by the dose, the magnitudes of which are only revealed over time. Similarly, major crises are averted
routinely, even in small ways, by properly managing the company and its reputation, day by day by day.