COMMENT: EDITORIAL; The impact of reputation

It would be foolish to suggest that the drastic demerger of British Gas is the result of bad PR. Looming competition and the millstone of hugely expensive supply deals led the company to conclude that a problem divided is a problem halved. But its PR problems cannot have helped. And there is little doubt among observers that the concomitant departure of chief executive Cedric Brown was hastened by the ‘fat cat’ row which his salary hike originally sparked back in 1994.

It would be foolish to suggest that the drastic demerger of British Gas

is the result of bad PR. Looming competition and the millstone of hugely

expensive supply deals led the company to conclude that a problem

divided is a problem halved. But its PR problems cannot have helped. And

there is little doubt among observers that the concomitant departure of

chief executive Cedric Brown was hastened by the ‘fat cat’ row which his

salary hike originally sparked back in 1994.



People have been falling over themselves this week to say how well liked

and respected Brown is within his own company and the gas industry. This

may be true, but the reputation of British Gas suffered because it

ignored the PR consequences of the remuneration issue.



Perhaps the company has now learned its painful lesson. The appointment

of PR strategist John Wybrew to the board would seem to offer hope. So,

hooray for PR. Now everyone will realise how important it is to take

strategic communications advice before blundering ahead with decisions

which may damage their companies’ reputations, won’t they?



Really? The dismal reality is that, despite the litany of recent

corporate blunders, there is still little acceptance of the link between

reputation and company performance.



Journalists have been furiously trying to wring a confession out of

British Gas that Brown’s departure is linked to the salary debacle.

Perhaps out of loyalty to their fallen hero, the company has so far

demurred. What a shame. What a missed opportunity to make a clean breast

of it, admit that they got it wrong, and put the row behind them.

Instead the smell will linger on.



Too many managements would rather blame the media, the markets, the

Government, Saddam Hussein, the wrong sort of snow, or the tooth fairy,

rather than admit that their problems are of their own making. This

blindness to their own faults is particularly evident when it comes to

public relations. The task for the PR profession is therefore to

establish concrete evidence of the correlation between business

decisions and the reputation of the company, and between reputation and

business performance. This means not only evaluating the bottom-line

value of successful PR, but proving how companies can suffer through a

lack of PR foresight.



Even with such apparently corking examples as British Gas to hand, it

will be difficult to pin down. But without such evidence, PR may never

be seen as anything more than the icing on the cake in good times, and a

dispensable luxury in lean times.



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