Corporate Reputation and Crisis Management

We had a fantastic guest lecture on Corporate Reputation and Crisis Management by Eddie Bensilum from Regester Larkin, leading crisis and issues management consultancy as part of our corporate communication module.

Difference between an issue and a crisis

The first point Eddie raised was that as public relations practitioners we need to educate clients on the difference between an issue and a crisis. She mentioned that the difference can be understood on the basis of five parameters like speed, surfacing, scrutiny, structure and stance. A crisis happens quickly, suddenly and demands intense scrutiny whereas an issue develops gradually and generates sporadic interests from the audience. An organisation’s structure needs to be rigid during a crisis, on the other hand, in case of an issue, it should be fluid. The stance should be reactive in a crisis situation whereas in the case of an issue, an organisation should be proactive. Although this fundamental difference should be kept in mind by public relations practitioners before formulating crisis communications plan but I think they should also understand the relationship between the two. By this I mean that crisis and issues are not two different entities, rather they share a deep relationship. One can say that if an issue is not managed timely, it can result in a crisis.

Managing reputation

Eddie later highlighted why companies need to bother about managing reputation. She said that reputation is what people (who matter) think about the organisation and it is important because it affects their attitude and behaviour towards the organisation. She pointed that reputation is directly linked to trust which in turn is broken if there exists a gap between what the organisation say and do or if there is a gap between the audience expectations and the performance of the company. The book Exploring Public Relations define crisis as an event that disrupts normal operations of a company or organisation and if, badly managed, can ruin hard-won reputations in just days and even, in some cases, destroy companies. Thus, based on this definition we can say that managing reputation ensures sustainability for organisations.

The Andersen case study mentioned in Exploring Public Relations by Ralph Tench and Liz Yeomans builds upon the point that companies need to be not only careful about their reputation but they also need to be wary of the reputation of other businesses or partners they deal with. Andersen has been best known and respected auditing companies in the world. It was an established and trusted brand. The problem with the Enron energy company crisis (Enron executives had been mismanaging the business and falsifying its financial performance) had a direct impact on Andersen and it saw its business and client base rapidly and drastically reduced. Andersen was later implicated in an attempt to cover-up with reports of coded instructions to employees to ‘clean out’ Enron-related documents as US federal investigators prepared to launch an investigation. In this case study, Andersen was later implicated because of its involvement but what about situations where the partner or suppliers did not do anything wrong. They might still be affected by the crisis situation. Thus, in my opinion, it is imperative for organisations to build and maintain reputation and trust. For any crisis communication plan it is vital that is should have an effective leadership, a clearly defined structure, trained and competent professionals, an agreed process and intuitive and user friendly tools.

The new media age

Eddie rightly pointed out that social media has drastically changed the communication paradigm. As a result, people have access to more knowledge; they demand greater scrutiny and transparency and the trust levels of people on brands and companies has decreased. It has also led to the growth of anti-business activism and NGO proliferation. So, what has been the impact of all this on communication professionals? Well, for them this means that managing crisis is much more complex and therefore requires much more planning and resources.

Crisis is a blessing for PR

A very interesting point which was discussed during the class was that in case of a crisis, public relations or communications department suddenly becomes the centre of attention. The need and importance of public relations practitioners is realised the most in a crisis situation. I think this is quite true since communications play a very important part in managing crisis and public relations practitioners are equipped with skills and techniques of packaging and selling effective messages.

Image credit: http://www.thequietman.org/imagenes/chinese-crisis-2.jpg

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Related links

http://iml.jou.ufl.edu/projects/Spring01/Hayes/

http://en.wikipedia.org/wiki/Crisis_management

http://www.evancarmichael.com/Business-Coach/223/IMPORTANCE-OF-PUBLIC-RELATIONS-AND-CRISIS-MANAGEMENT-PLANNING-TO-YOUR-BUSINESS.html

References: Exploring Public Relations by Ralph Tench and Liz Yeomans, chapter 19, Crisis public relations management

Corporate Image, Reputation and Identity (Case Study P&G)

Corporate Overview:
Proctor and Gamble is a Fortune 500 multinational corporation producing consumer goods. The headquarters are in Cincinnati, Ohio, USA. It is the 8th largest corporation in the world in terms of its market capitalisation and its market capitalisation is greater than the GDP of many countries. The company has operations in more than 180 countries and is serving nearly 4 billion consumers.
Brand Value:
As per the table of 20 Largest US Companies, P&G has a market capitalisation worth $180 billion and has the strongest portfolio of brands. These 43 brands account for 85% of sales and more than 90% of profit. P&G is certainly one of the most valuable companies in the world.
Corporate Image:
Corporate image is the perception of the company which exists in the minds of its publics and how they view it. Corporate image changes from person to person and from time to time.

Employees: P&G employees feel a sense of pride for being a part of P&G’s rich cultural heritage and its global scale of operations. Their strategy is to Engage and equip all P&G employees to build Sustainability thinking and practices into their everyday work. By offering them a share in the company, P&G made them a part of their growth.
Consumers: For consumers, P&G stand for quality and value for money. P&G has always put consumer at the centre and has always evolved itself with their demands. As a corporate, it supports events and programs through sponsorships to ensure greater visibility and also gives its consumers opportunities to become a part of their growth. For example, P&G sponsored Allstate Gospel music Super fest, US Olympic team and the launch of Brighten Bay Idol, an online talent search for the next bright star.
Suppliers: P&G has nearly 80,000 suppliers across the globe and it sends across their message by recognising their contribution in the company’s success through award ceremonies. This way supplier feels a part of P&G’s growth and it makes the bond stronger. For example, P&G’s Global Business Development Dinner awards Procter & Gamble Company hosted over 50 external companies in Nov09 to acknowledge and celebrate successful external partnerships with P&G's Global Business Development Organization. A separate web page has been created on the website to cater to the information needs of potential and current suppliers.
Communities: P&G is actively engaged in community’s welfare activities. For example, recently P&G made huge contributions for Haiti earthquake victims. Initiatives such as Children’s Safe Drinking Water and Pampers 1 Pack = 1 Vaccine are examples of how P&G is improving the lives of millions of people every day. Therefore, communities see P&G as responsible and committed organisation.
Investors: The Company has been paying dividends without interruption since incorporation in 1890 and the company's dividends have also increased every year - more than 9 percent a year on average, over the past 53 years. The company’s website has a special category called investor relations and it contains all relevant and updated information for investors. The aim is to keep the investors well informed on the achievements and strategies of P&G and also to attract potential investors and encourage them to invest. The investors can also subscribe to press releases and events news on the website.
Media: The website is quite media friendly has a media section which comprises of latest press releases, media kit with product images and logos to download, quick facts about the company and list of media contacts. The journalists can also sign up to receive timely news updates. Through these tactics, P&G conveys a message that they are friendly, approachable and pro-active.
Government: P&G works closely with government regulators to ensure that products meet stringent safety and efficacy criteria.

Corporate Reputation:
Organisational reputation is when an individual collates all the photographs or images taken over a period of time into an album and forms an opinion of the organisation by looking at the entire collection of photographs. Therefore, since its inception P&G has successfully managed to establish its reputation as a leader.
Leadership: Nearly a half-million people apply for P&G jobs every year. They hire less than 1% and attract top talent because of P&G’s reputation as a great company for leaders. So, we can say that P&G has established itself as a pioneer in consumer goods.
Respectable: They are respectable because they show respect for all individuals It ranked 3rd on the world’s most respected companies list compiled by Barron magazine.
Diverse: Diversity & Inclusion is deeply rooted in our company’s Purpose, Values & Principles. P&G brings together individuals from different backgrounds, cultures, and thinking styles providing remarkably different talents, perspectives, and life and career experiences. They all work for a shared purpose together in the most diverse environment representing 140 nationalities. The mission of Diversity & Inclusion at P&G is:
Everyone Valued, Everyone Included, Everyone Performing at Their Peak™. For example, it was named top 50 companies for diversity in 2009.
Innovative: P&G has constantly evolved itself with changing times. One of P&G’s strategies is to shape the future by working transparently with stakeholders to enable continued freedom to innovate in a responsible way. It ranked 12 among world’s most innovative companies as per Business week.
Socially responsible: P&G is deeply committed to improve children’s lives through their socially responsibility programs. For example, through their Learn Live and Thrive initiative, they have reached 135 million children since July 2007. They aim to deliver an additional 20% reduction (per unit production) in CO2 emissions, energy consumption, water consumption and disposed waste from P&G plants, leading to a total reduction over the decade of at least 50%.

Corporate Identity: Corporate Identity is what the organisation communicates via various cues. Olins (1999) specifies three categories to encapsulate different structures of identity: monolithic – where one name and visual identity are used throughout (IBM), endorsed- where an organisation has a group of activities or subsidiaries which it endorses with the same name and identity (Chanel) and branded- where an organisation operates through a series of brands which may be unrelated (Procter & Gamble). According to Van Riel (1995), corporate identity mix includes symbolism, communication and behaviour. Symbolism includes symbols like company’s logo, type face, font, colour, building, stationary, visiting cards etc. through which an organisation consciously or unconsciously sends a message.
For example, P&G changed its logo when its publics started linking it to devil. They thought that the 13 stars represent the original 13 colonies of the US and that the satanic number 666 is hidden in the curly beard. Finally, in 1990s, P&G changed its logo to a wordmark using just P&G. This changed helped P&G in building its brand. The P&G logo and brand name today are far stronger than the old name and logo were. The Procter & Gamble logo was designed in 1991 by Lipson Alport Glass & Associates. The colour is blue which symbolizes trust, loyalty, integrity and power. Procter & Gamble uses the typefaces Franklin Gothic and Times New Roman.
Communication involves how P&G communicates with its stakeholders, for example, through advertising, public relations, marketing and other information sources like websites and new media. Behaviour means how P&G deals with its stakeholders like employees, suppliers, and customers etc.

Brand personality: is the expression of the core values & characteristics of a brand. Corporate personality is made up of the organisation’s history, culture, values and beliefs as realised through its staff, structure systems, its products and or services. Bernstein talks about stakeholders experiences of an organisation building into a mosaic ‘the picture is that of an individual, a corporate portrait of a “Mr. Cadbury’ or Mr Shell or Ms Avon. Olins links the notion of corporate personality to an actual human personality.
Olins links the notion of corporate personality to an actual human personality. If P&G was a person, how would you describe it? This brand personality helps P&G to differentiate itself and thus gain a competitive advantage. As public relations professionals it becomes imperative for us to understand the brand’s personality since this will help us in taking intelligent decisions, for example, choosing the right celebrity for the brand who compliments the brand’s personality which P&G has done quite successfully.

Outcome:
The reason why I picked up this brand is that it is a great example which highlights that the corporate identity task is to manage the multiplicity rather than suppress it. Though P&G has a very distinct division between the brands versus Procter & Gamble as an organisation but its images are consistent, not with each other, but with the organisation central values which includes leadership, reliability, innovation and quality.

References: Exploring Public Relations, Ralph Tench and Liz Yeomans, 2009 and Alison Theaker, The Public Relations Handbook, 2008

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