Introduction

The workshop participants started to arrive at about 8.30 am. Half of them had their luggage with them,
ready to head straight back to the airport after the day’s proceedings. As we waited for everyone to
arrive, the talk over coffee was of jetlag, hotel facilities and return flight times. The accents were many
and varied; the job titles on the collection of business cards I was amassing were impressive. Clearly,
this was a workshop that the company was taking seriously.
And so it should. This was a ‘reputation management strategy work-shop’ and the company was a
well-known global manufacturing company with a host of household brands to its name but a
reputation that could be described, at best, as ‘mixed’. I had been asked to facilitate the workshop, and
was told that the desired output was a draft reputation strategy and plan for the next 12 months. The
agenda included crisis preparedness, issues management and the social responsibility agenda.
The standard round-the-table introductions confirmed that the participants were senior
representatives from operations, sales, human resources (HR), finance and legal services. And because
the workshop was about ‘reputation’, the communications people had come mob-handed. After a little
opening spiel, I kicked off the conversation proper by asking the participants to rank the following
overall company objectives from one to five in order of importance: financial success; a good
reputation; a happy workforce; satisfied customers and local licence to operate. All of them, except one
(not the lawyer, in fact) rated ‘a good reputation’ as number one.
What? A good reputation is more important than financial performance? More important than the
company’s legal licence to operate in its various markets? More important than satisfied customers?
Apparently so, because they all looked fairly happy with themselves. This was, after all, a reputation
workshop so ‘a good reputation’ was surely the right answer. Wasn’t it?
We moved on, and I asked them what they saw as their top reputation objectives for the months
ahead and, after a little discussion, the group decided that the top objective was ‘successful stakeholder
engagement’. They obviously noticed an expression of some surprise on their facilitator’s face, and felt
the need to explain this further:
‘We need to engage with our stakeholders’, said one of the operations people, ‘to understand the
external climate, protect our reputation and make better business decisions.’
‘And who are these stakeholders?’ I asked.
‘As it happens’, said one of the more junior communications people round the table, ‘I have our
stakeholder engagement list with me on my laptop. Our PR agency has just revised it, so it’s pretty up
to date. Would you like to see it?’
On went the laptop and on went the projector. As the neat table started to appear faintly on the screen
in front of us, we saw that five stakeholders were on the front page marked ‘Priority 1’: Greenpeace,
Friends of the Earth, WWF, the UK Department of Trade and Industry and the US Department of
 Aspects of managing reputation risk
Does all this mean reputation is indefinable and unmanageable because it is so inseparable and all-
encompassing? Of course not. Organizations have to deconstruct things into manageable chunks,
otherwise nothing would ever get done. But, what is important is that they should reconstruct it when
talking about it and ensure it becomes part of the whole organization’s culture.
As we will see below and through the rest of this book, there are three components of reputation
management that can be separated and managed in different ways, but they must be considered as
separated through management necessity only. They all essentially point at the same thing:
understanding the importance of, and the need to look after, the organization’s reputation. These three
components are:

crisis management;
issues management;
social responsibility.

So now we have ‘deconstructed’ into these three components of managing risk to reputation, how are
companies doing in crisis management, issues management and social responsibility? In 2006, the
company I run conducted an audit of the reputation risk management practices of various clients and
other organizations. An independent consultant conducted qualitative interviews with a good cross-
section of companies in various sectors. There were various interesting conclusions, four of which are
explained below.

Conclusion one – terminology is extremely diverse

Not only is reputation defined and discussed in different ways by different organizations, the terms
‘crisis management’ and ‘issues management’ are not as universally accepted and understood as one
might imagine. Whilst most respondents to our audit claimed that reputation management was a term
that was widely used in their organization, only a few admitted to feeling uneasy about how the term
was used and implemented through the organization. Of those who did have concerns, one comment
from one senior communications professional (who had ‘nominal ownership’ of the company’s
reputation) summed up this concern: ‘I don’t like the term reputation management’, she said, ‘and I try
to avoid it. It implies that it is in the hands of the few, whereas, of course, it is in everyone’s hands.’
‘Crisis’ is, for some organizations, a dirty word. Some think it is unnecessarily alarmist and prevents,
rather than encourages, people from taking ownership and responsibility. Some think that using the
word induces a negative crisis mentality, which makes a bad situation worse. ‘Incident management’
seems to be a popular alternative, with ‘emergency response’, ‘event management’ and ‘special
situations’ other variations on the theme. I can understand ‘incident management’ and ‘emergency
response’ for physical incidents, but not for the many other sorts of corporate crises that can strike.
‘Event management’ sounds too much like organizing a cocktail party and ‘special situations’ just
sounds sinister and military. I’m not sure that any of these alternative phrases quite communicate what
is captured by ‘crisis’.
For some local or product divisions within global companies, the term ‘crisis’ is avoided, because to
use it would take the power of managing the crisis away from these divisions and give it to some
stakeholders, which might help organizations to establish a new mindset.

Company X’s stakeholder list

We at Company X have many stakeholders and we want to engage with as many of them as possible.
We must prioritize, of course, but that does not mean going to those that are easily identifiable. Our
priorities are as follows:

Priority 1 The people without whose active support we can’t operate:

Customers, who buy our products and services
Employees, who make and sell our products and services
Shareholders, who finance the company
Local communities, who support our continued operations where they live

Priority 2 The people who hold power over us:

Governments, who can withdraw our licence to operate
Regulators, who can report perceived or real failings and can withdraw our licence to operate

Priority 3 People who influence those in the above categories:

The media, who have some control over our public image
Interest groups, who also talk to key audiences
Experts, who can have an influence in their field over the above audiences

Priority 4 People who want to see us fail:

Campaign groups, who oppose what we do and what we stand for
Competitors, who have no interest in seeing us succeed (although they might not always want us to fail,
lest we take the whole industry’s reputation down)

A central argument in this book is that many companies are engaging with the wrong groups on the
wrong agenda and the wrong issues. Recasting the stakeholder list and map will not solve this problem,
but it is a tangible shift towards getting the reputation priorities right.

Summary
At the beginning of this chapter, I quoted from Cadbury Schweppes Chief Executive Todd Stitzer. His
Financial Times article in summer 2006 was an interesting and important contribution to the debate
about corporate image and reputation management, in which he appeared to be advocating a more
confident and combative strategy. But just a matter of weeks after the article appeared, Cadbury
Schweppes saw its own reputation severely threatened after a large-scale product recall in the United
Kingdom sparked by a salmonella scare. The company emerged from the crisis with its business intact,
but its reputation badly scarred. I have not heard Mr Stitzer giving any more advice on reputation to his
corporate peers.
Being bold on the big issues, standing up for business and ‘regaining the reputation initiative’ is not
something that can be done in isolation from good day-to-day management of issues and crises. It is
hard to take a public stand on something when the perception is that your own house is not in order.
Changing the corporate mindset, getting reputation genuinely to the heart of the organization and
redrawing the stakeholder engagement list are just the start to regaining the reputation initiative. To
make a real difference, the same thinking needs to be applied to the various aspects of managing
reputation risk. The rest of this book looks at the three key areas of reputation risk management – crisis
management, issues management and CSR – and makes recommendations for change in each.

Notes
1. Stitzer, T (1 June 2006) Financial Times, ‘Business Must Loudly Proclaim What It Stands For’.
2. Reuters (14 February 2007) ‘TOTAL’s Record Profits Stir Up French Election’.
3. Financial Times (14 February 2007) ‘Business Leaders Warn Against Royal Victory’.
4. The Guardian (5 January 2007) ‘Labour Targets Airlines Over Carbon Emissions’.
5. The Independent (6 January 2007) ‘Government Should Look to Mote in its Own Eye Before Branding O’Leary
Irresponsible’.
6. The Times (25 April 2007) ‘Most Britons Believe that Airlines are Failing to Clear the Air’.
7. Financial Times (6 March 2007).
8. Philip Dewhurst quoted in PRWeek (11 December 2006).