In the first six months of 2010, the world saw great and huge corporations such as Toyota, Goldman Sachs and BP stumbling badly in the public arena, harming their reputations and financial performance.
This, allied with the worst recession since the Great Depression, has caused the reputation management process to change fundamentally. First, there is now an immediate public focus on identifying responsible parties and making them pay swiftly when something goes wrong and has a negative impact on the public. Financial services companies and ratings agencies were publicly blamed by the President and Congress for irresponsible practices that led to the recession and job and home losses. The CEOs of Toyota, Goldman and BP each went before congressional committees to answer questions regarding the behavior of their companies leading up to the crises.
Second, the dramatic rise of social media means crises live 24 hours a day, around the world. It's not just daily newspapers, nightly news programs, or even 24-hour cable channels: chatter and criticism now continues nonstop. And social media commentary can feed traditional media coverage (traditional journalists are huge users/consumers of blogs and other social media).
This new reputation management process means corporate communicators need more than a standard plan sitting on the shelf waiting to be dusted off when a crisis breaks. It is far more important to conduct comprehensive risk management scenario planning exercises, where the worst crises are considered and a plan is developed that specifically addresses each potential scenario. This process should not only involve corporate communications, but also the risk management department, CFO and CEO. Ultimately, the board of directors will also want to be informed about this process.
Additionally, every company should monitor what is being said about it in real time. That includes social media conversations as well as traditional media, and this should involve social media in multiple countries. A regular analysis of these conversations needs to be made, looking for what might become the next crisis, so that a customized response plan can be developed for different scenarios.
Welcome to the new world of reputation management.