Are we, in fact, seeing more corporate scandals than ever before?
Every company seems to be in crisis, even the ones that have been our corporate royalty. The fact is there are more reputation stumbles than ever before. At Weber Shandwick, we actually looked into this and called it the "stumble rate" — we looked at the list of the most admired companies, and about 79% of those companies have lost reputational status over the last five years. It is not just perception, it is reality—and it's very disturbing, which is why reputation is more important than ever. These companies that we once thought were invincible have all stumbled, and now are at different stages of restoring their reputation. In Canada, you've seen a few examples of this, with Maple Leaf Foods, Sunshine Propane, and Greyhound.
Why is the stumble rate rising?
It has a lot to do with the changing reputation landscape. It is very difficult to manage reputation when we all live in glass houses—where everything is transparent. The Internet allows people, from current to former employees, to spill the beans. Once you start digging into a crisis or issue, there's always someone who leaked a memo or tipped off someone—there just always seems to be something. Usually there are early warning signs, but companies and their leaders have not paid enough attention.
What is your take on how Maple Leafs Foods handled itself after its tainted meat crisis?
Maple Leaf did a really good job, and I think that is because its response was led by the CEO, which is one of the basic tenants of recovering reputation. The company seemed to understand the new rules of engagement—which is to banish the two words, “No comment”, from your vocabulary, show empathy, and use all sorts of channels to convey your message. Plus, you need to do the right thing. Not everyone gets to see [Maple Leaf CEO] Michael McCain every day, and so when you see someone in his position do the right thing, it really adds to the reputation of the company as a whole. While Tylenol is considered the gold standard in this area, they had the advantage of having a whole week to prepare. You no longer have that luxury today.