Take BT: four years ago it was in trouble and its mobile phone business – then called BT Cellnet – was spun off as a separate company.
MMO2 was an instant laughing stock – quite literally. Demerged at just over 70p, the share price promptly halved. But CEO Peter Erskine and his team set about promoting the O2 brand. They stuck it everywhere – on the shirts of England rugby players, on poster sites and in the right papers. With innovative packaging and improved service, it was suddenly back in business as a hip brand – despite the fact that its technology (specifically 3G ) was way behind the competition.
O2's PR message was simple and delivered almost in an old-fashioned way: this business had been reborn with an open management. Erskine was ever ready to answer tough questions; those Twickenham boxes proving handy when he wanted to bend a City editor's ear.
Just before Christmas a monetary value was placed on all that work: Telefonica agreed to pay £18bn for O2. Its value had multiplied five times in four years.
Another example of reputation-led recovery is Marks & Spencer – a beached whale waiting, 18 months ago, for retail hyena Philip Green to offer to take the business over. After a famous scrap, CEO Stuart Rose convinced shareholders that Green's 400p-a-share offer should be rejected in favour of his own turnaround plan. It was a loaded victory, because few believed Rose could deliver: they expected Green to return, perhaps even offering less money. It was a potential PR nightmare – a largely hostile press, which like Green because he's good copy, had to be patiently turned round. The cracks in relationships between the company and the media had to be quietly papered over. There was no room for M&S's traditional arrogance.
Even now, with Rose having taken the share price from 350p at the time Green walked away, to above 500p this Christmas, the PR message is calm, polite and cautious: Yes we are hopeful but we cannot get carried away, Rose seems to say, despite his team having created some £2.5bn in shareholder value.
Paul Murphy is financial editor of The Guardian. Kate Nicholas is away.