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.
