Given the current financial meltdown sweeping the globe - the sub-prime lending mess, companies' lowered quarterly earnings, falling consumer confidence - the reputation "stumble rate" is guaranteed to continue to rise in 2008.
Weber Shandwick found that 52% of America's number-one most admired companies lost their crowns in their respective industries over the past five years. The sheer number and severity of corporate falls from grace magnify the need for companies to know not only how to build reputations, but more importantly, how to protect and salvage damaged ones.
As financial storms gather force, reputation loss is inevitable. There are several steps that leaders can take now to protect their company reputations and hasten recovery.
Take the heat. Just as CEOs get most of the credit when things go right, they should expect to take a majority of the blame when things go wrong. CEOs are the ultimate guardians of reputation and must act promptly, decisively, and transparently after a crisis or challenge to their company's reputation.
Communicate tirelessly. Leaders must communicate both the good and bad quickly and often. As GM CEO Rick Wagoner said, "People are always hungrier for information when times are challenging."
Leaders should use channels that are best suited for different audiences. In tough times, CEOs and senior officers should maintain and initiate their town meeting schedules, walk the halls, visit customers and vendors, and brave the press. Electronic communications should supplement face-to-face interaction as often as possible.
Stick to your value-based strategy. There is no better time to pay attention to a company's values than when the stakes are highest. Taking shortcuts to make ends meet during hard times quickly diminishes trust. If a company that heralds itself as an "employer of choice" reduces employee benefits or training when its revenue streams are vulnerable, the company's credibility will swiftly erode.
Don't overlook core customers while seeking new ones. The temptation to seek out new customers as other customers flee to low-cost alternatives is not uncommon. However, companies should not ignore their primary audience to chase new patrons. Customers can be unforgiving if they sense the service or quality they are accustomed to has declined.
Multiply everything you hear by 10. Leaders should take all the bad news they hear and multiply that many times over. Monitoring the blogospheres, suggestion boxes, exit interviews, and satisfaction surveys should be at the top of every executive team's to-do list.
Reputations are not always destroyed outright, but often gradually eroded by a ripple effect. To paraphrase a BP employee, even the loudest shout turns into a whisper when it reaches the CEO's office. When clear warning signs are detected and given an audience by company leadership, reputations will not be left up to the roll of the dice.
Dr. Leslie Gaines-Ross is Weber Shandwick's chief reputation strategist and author of the new book, Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation (Wiley, 2008).