Banking a good reputation

What is a crisis? What is a useful definition of a crisis? These are the kind of questions that come up time and again in our nerdy crisis world.

The definition we generally go with is from a British Standard and will be familiar to anyone who works in business continuity or crisis management:

‘A crisis is an abnormal and unstable situation that threatens the organisation’s strategic objectives, reputation or viability.’

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When delivering crisis management training I usually try to tease out a definition of a crisis from the participants and the word reputation is the one I’m generally looking for.

But would it be helpful to remove reputational damage from the definition? To me that sounds counter-intuitive but features in a recent Ipsos Mori report on corporate reputation. The pollsters posited the suggestion that:

Full-blown crises pose a genuine threat to a company’s continued survival or licence to operate. By contrast, reputation turbulence is an issue, or series of issues, which impacts the impressions of stakeholders without posing a sustained threat to the company.’

This clearly struck a chord with the vast majority (79%) of Reputation Council members, saying being able to differentiate between the two is seen as very (59%) or fairly (20%) useful. Unfortunately, the report supplies no evidence as to why the respondents felt that way.

I remain unconvinced and still feel that reputation has to be at the core of any crisis definition. If your corporate reputation is lost, then that really can represent an existential threat to your organisation.

As Unilever’s Paul Polman notes ‘reputation has a habit of arriving on foot and departing on horseback’. 

Where the report is on more solid ground is when it stresses the need for firms to build a robust reputation through a track record of stakeholder engagement prior to any emergency.

One report respondent put it like this:

‘Our CEO is always talking about something that Steve Jobs told him: He broke it down and made it very simple. What you do is either a brand deposit or a brand withdrawal and you need to have a lot more brand deposits than brand withdrawals. And the simplicity of that is the consumer will give you the benefit of the doubt if you have been making consistent brand deposits.’

If you are known as an untrustworthy or slipshod company, then the public is unlikely to cut you much slack. But if, over the years, you’ve kept your reputational balance sheet firmly in the black you will be in a far better position to thrive and prosper even in the face of adversity.

I think we can all agree on that.

Jim Preen (Head of media)