The recent congressional scrutiny of Goldman Sachs only compounds the reputation troubles for the industry.
A recent Harris Interactive study revealed the 10 most liked and 10 most disliked companies. This year, the companies in the bottom 10 are as telling as the top 10, particularly given the concentration of financial services firms on the list of most disliked companies.In the public's mind, financial services firms and their executives generally bear most of the blame for the financial crisis and the severity of the current economic downturn.
I imagine the C-suites of these companies are asking what they can do to make amends, restore confidence, and polish their tarnished reputations. If I were advising one of these basement dwellers, I'd recommend they start in these three areas:
- First, pay more attention to Main Street. It is primarily local businesses that create jobs and fuel the economy. Local community relations efforts that used to be the backbone of reputation-building activities have given way to top-down corporate sponsorships and network television campaigns.
- Second, recognize that some reputation challenges are behavioral challenges, not communications challenges. Financial institutions have behaved in ways that make them disliked. Now they need to behave in ways that are likable. This means engaging in business practices that reflect integrity, accountability, and transparency.
- Finally, undertake a renewed commitment to diversity that produces a variety of perspectives and opinions. I imagine every financial services firm has a diversity recruitment plan, but just as in the PR and advertising industries, more can and should be done to broaden company perspective.
With the economy on the mend and financial services profitability returning, there's no guarantee the industry will have an incentive to restore its reputation. There's clearly a space for a financial services company that values its reputation and is willing to act in ways that improve it.
Karen Albritton is president of Capstrat.