The Importance of Reputation Management in Crisis Situations
Reputation management is an integral and often overlooked part of crisis management. In times of upheaval, it plays an indispensable role in navigating the storm and finding a path towards crisis resolution and damage control.
According to Deloitte’s 2018 global survey on reputation risk, almost "87% of executives rated reputation risk as more important or much more important than other strategic risks their companies are facing."
Why is reputation management so crucial in crisis situations? Here's why:
Organizational Crisis: During a corporate crisis, your organization's reputation can act as either a shield or a magnifying glass. A well-regarded company can weather storms more comfortably while trust in a tarnished organization erodes swiftly and can aggravate the crisis.
Customer Trust: Companies with solid reputations tend to enjoy a higher level of trust among their customers. According to a survey by BrightLocal, "87% of consumers said they require a business to have a rating of three or five stars before they choose to use them." Such trust can be a critical factor in successful incident management.
Business Resilience: Reputation management can bolster your business resilience. Companies known for their strong ethics and exceptional services find it easier to bounce back after a setback.
Crisis Coordination: Effective crisis handling often demands seamless coordination with multiple stakeholders, including customers, employees, investors, and regulators. A firm with a clean reputation stands a better chance of effective crisis coordination.
As Warren Buffett famously said, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." In a world where a single PR faux pas can snowball into a full-blown crisis, the value of reputation management in crisis situations cannot be overemphasized.
