Last week, after negotiations with the Financial Conduct Authority (FCA), Wonga agreed to write off £220m of debts from 333,000 customers.
This concluded a difficult six months in which it turned quickly from a recognised brand with memorable TV advertising into a poster child for irresponsible loan practices.
Payday lending is a classic externally driven issue: an issue that is driven by political, NGO and public outrage.
Externally driven issues require careful positioning, policy development, communication and often – and most importantly – change in order to manage or resolve them.
Some issues can, with a trigger event, snowball into crises.
But an issue does not need to be designated a crisis for it to present real and present danger.
Just as Google and Starbucks became the focus of attention on UK corporation tax avoidance, and Cuadrilla the poster child for UK shale gas exploration, Wonga brought the concept and practice of payday lending to life.
With the benefit of hindsight, Wonga may now be wishing it had engaged with stakeholders earlier and better.
In doing so, it may have understood that both the company itself and the industry more widely were perceived by many as providing an unacceptable service.
The company may then have chosen to implement change itself, using its leading position to differentiate itself from other payday lenders, instead of being forced to change by the FCA.
Regulators step in when self-regulation has not happened or when stakeholder or public opinion is so strong that they feel compelled to be seen to act.
Companies looking to resolve issues need to change either the conversation – i.e. devise and execute a communications strategy that will challenge the assumptions being made about them – or the company.
Often, a little of both is required.
Some sort of real change provides the ‘table stakes’ for entering into – and trying to change the agenda of – a more constructive debate.
The message for all companies here is that businesses do not exist in a vacuum.
And just as no business can afford to ignore its customers, no business can afford to ignore its stakeholders when they are so united in a negative opinion about you.
Stakeholder engagement is an ugly term but it is actually something very simple: listening to, talking to and learning from the people and organisations that have an interest in your business.
Companies don’t ignore what their customers think and they shouldn’t ignore what their stakeholders think.
And what is the role of communicators in this?
While communication alone does not solve entrenched externally driven issues, communicators do need to help shift the conversation on the back of real change as well as explain the importance and nature of this change to a sceptical external and internal audience.
The experience of Wonga shows that it is never too late.
The changes Wonga has agreed with the regulator may take the high profile company off the front pages and mean that in the long-term it is a more sustainable business.
As Wonga tries to reform and refocus, it should not go back into a bunker: it needs to keep listening and engaging with stakeholders – not just to fend off and manage issues but because it is the right way to do business.
Andrew Griffin is chief executive of Regester Larkin and author of Crisis, Issues and Reputation Management