INSULATION

Mirror, Mirror on the wall, Whose Reputation is the worst of all?

Deon Binneman — Sat, 06 Jan 2007 23:38:48 +0000

A Number of consultants and media outlets have researched and taken a look at some of 2006’s worst reputation disasters. Study these and learn from the actions taken and not taken.

PR Missteps and Masterstrokes – A look at some of the public relations disasters—and coups—in the business world in 2006

http://images.businessweek.com/ss/06/12/1218_2006pr/index_01.htm

http://www.prweek.com/us/news/open/free/blogs/609688

Interestingly the keywords in most of these examples point to human error, and/or human behavior and actions. Perhaps organisations are making a crucial error when they assume that executives, managers and staff know that the organisation’s reputation is important.

It reminds me of a story told by a friend of mine who is a very dedicated safety expert. He always says the following; when people say that safety consciousness thinking is just common sense that: “Safety is not common sense. There is nothing common about common sense.” For the past eleven years I have facilitated many health & safety training programs for him and it is always astounding when managers come to me afterwards to thank me for the basic lessons that I have just taught them. They always say thanks for the decrease in their lack of knowledge.

Assumptions can be very dangerous. It is like the legal statement: “What would a reasonable person have done?” What is reasonable? There is a key lesson from the training industry that is very useful in this regard namely that Repetition is the mother of skill. If you want someone to do a task to a certain level of competence, then you need to tell them over and over again until they get the message.

For me it is very clear that organizations’ assume that their management teams know how to manage reputation and leverage this asset, especially during a crisis. This assumption is a dangerous one as can be seen from the various examples.

If you want your managers to manage and look after your organisation’s biggest but most fragile asset, you need to empower them with the necessary knowledge, tools and techniques to do so.

What is the Golden Thread?

Deon Binneman — Fri, 05 Jan 2007 21:56:48 +0000

The magazine Fast Company is running a brilliant slide show depicting how some international brands faced a crisis and rebounded.

Visit http://tinyurl.com/yk2vyy to view the slide show.

Unfortunately the slideshow does not paint a true picture of the damage and impact the crises had on the organizations, but it does encapsulate briefly the response taken.

What is the golden thread amongst these examples in your opinion?

Every one of these examples clearly show that an organization can make lemonade out of lemons, i.e. deal positively with any crises and issue , if they think through the process clearly and never loses sight of the vision and values of the organization.

However for me, the golden thread is Prevention. Prevention is better than cure! Proactive Crisis Management is still better than post-event reactive management.

The Meaning of the Picture Header

Deon Binneman — Fri, 05 Jan 2007 08:33:34 +0000

Someone asked me why I used this picture in my Blog. This is my reasoning.

This picture symbolises the danger of reputation risk. It carries a powerful message that if your Reputation gets damaged, you are going to go one way!

On the other hand, if you should develop a powerful positive reputation, you will be going to Wall Street (Stock Exchange). Wall Street symbolises value, growth and future expectations.

If you look in the background, you will see a man in a black cloak. That’s me. The Reputation Advocate. Ready to help you in the right direction.

I could be ”Van Helsing” – Bram Stoker’s the monster hunter from the movie, summoned to dark land far away on a quest to banish evil, but more likely than that I could be V as in the movie V for Vendetta.

Set against the futuristic landscape of totalitarian Britain, V For Vendetta tells the story of a young working-class woman named Evey who is rescued from a life-and-death situation by a masked man known only as “V.” Profoundly complex, V is at once literary, flamboyant, tender and intellectual, a man dedicated to freeing his fellow citizens from those who have terrorized them into compliance.

Some see V as one man’s terrorist who is just another freedom fighter. Others see him as a liberator.

Point of the matter is that I am a Corporate Jester. Someone who through my presentations get audiences to think about their actions and behaviours. To think about prevailing practices and the corporate culture. To think about those things that the organisation is doing to harm its reputation.

In the Middle ages the Court Jester used to challenge the King to his thoughts and decisions. Sometimes he had his head chopped off, other times the King listened.

Through my presentations I try and challenge the status quo and make people aware of the impact of their reputation on the overall organisation’s reputation. If that makes me a Jester, then I must be on the right track.

Why should organisations protect itself against Reputation Risk?

Deon Binneman — Thu, 04 Jan 2007 20:02:36 +0000

Numerous studies have shown that the most significant issues facing business today are reputation risk (defined as the threat of any event that can damage a company’s reputation) and regulatory risk (defined as problems caused by new or existing regulations).

Unfortunately many companies damage their carefully crafted reputations either inadvertently or through blatant and incredulous acts.

Most of the damage occurs when there is not a careful crafted strategy for building, sustaining and protecting the organisation’s biggest risk and asset – its reputation.

The new order of the day seems to be accounting principle restructuring, companies seeking to improve trust building, governance and ethics principles and practices, stakeholders seeking disclosure and shareholders becoming more and more frustrated.

Yet, there still seems to be a general lack of understanding the true value and potential of an organisation’s reputation. And, as long as management do not understand how reputation risk manifests negative articles and doubt about company practices will continue to dominate headlines.

Unwanted actions and negative publicity leads to reputation risk. And reputation risk manifests when perceptions and opinions are influenced by negative experiences, impressions, beliefs, feelings and knowledge that stakeholders have about a company. It often results in loss of sales, share value decreases and breakdown of relationships.

Companies should be asking themselves about what actions they are taking to protect and insure their good name against all types of crisis – especially those that are sudden, smouldering and perceptual!

More and more companies are finding that their once hidden “smouldering crises” are now becoming fully-fledged combustible crises. (A smouldering crisis is any serious business problem which is not generally known within or without the organisation, which may generate negative news coverage if or when it goes “public” and could result in fines, penalties, unbudgeted expenses or unwanted scrutiny).

The damage of a reputation crisis can be direct and indirect. These costs could include penalties incurred because of a lack of legal compliance, litigation, media conferences and advertising costs and the hiring of crises communication consultants to put forward positive messages after the wrongful deeds. BUT what about the indirect costs, the effects on various stakeholders? The customers that do not return or stakeholders that takes their business interests elsewhere?

I believe that managers have both a professional and a moral duty to try to protect their company’s reputation. The way to minimise their company’s reputation risk is to be vigilant and report anything, which they believe, could erupt into an issue of unwanted publicity and to act to rectify it. But they can only do that if they understand what reputation is all about and how it can be managed and damaged.

I therefore assist companies with minimising and mitigating reputation risk and advise them on how to react and manage any crisis or issue that might destroy reputation, relationships and market share. A large part of my work involves speaking at conferences; capacity building by facilitating workshops around the globe on Reputation, Crisis Management and Crisis Communication response and helping organisations design and implement robust reputation risk management frameworks.

Not Missing in Action!

Deon Binneman — Thu, 04 Jan 2007 19:58:17 +0000

No, I have not been missing in action.

After a well deserved holiday, this blog will be up and running as from today. I trust that you enjoyed the festive season and did nothing to subtract from your hard-earned reputation.

I sincerely hope that during 2007 you will “Regard your good name as the richest jewel you can possibly be possessed of – for credit is like fire; when once you have kindled it you may easily preserve it, but if you once extinguish it, you will find it an arduous task to rekindle it again. The way to gain a good reputation is to endeavour to be what you desire to appear.” (Socrates – 469 BC – 399 BC)

The implications of these words is that reputation is something that needs constant work just like a gardener attending to his flower beds. Like as in gardening it does not take much for weeds to grow, pests to come and flowers to wilt.

Constant attention and vigilance is needed if you want to maintain and safeguard your reputation. Do you know what drives your reputation? Do you know what can add or subtract from that reputation?

Find out! In today’s knowledge economy your reputation is your stock-in-trade. Manage it carefully.

Why the name Insulation?

Deon Binneman — Thu, 04 Jan 2007 19:55:30 +0000

As the world become more and more networked, more and more companies are exposed to a changing set of vulnerabilities. The landscape of risk has changed. No longer can any country or organisation ignore the happenings of 911, Enron, and countless scandals facing organisations.

In this new world, incidents can damage a good reputation purely because an organisation can take to long to act decisively with problems. For instance a reputation damaging incident can become international news in a matter of seconds and destroy relationships and brand value in other countries where the incident did not even take place.

I chose the word Insulation as it has lessons for organisations wanting to protect themselves against reputation damage.

The word “insulation” means to protect. It is the act of insulating or the state of being insulated. It is the act of protecting something by surrounding it with material that reduces or prevents the transmission of sound or heat or electricity – a material or substance used in insulating: soundproof cork insulation; a layer of trapped air that serves as insulation.

Working towards protecting your organisation is the act of insulating. By reducing or preventing the transmission of wrong messages, incorrect actions and “flow” we can protect against Reputation Risk. By creating goodwill through our positive actions we can insulate against future mishaps.

This blog is aimed at Business Leaders and Executives especially Reputation managers, PR professionals, Risk managers, Crisis Managers and Corporate Affairs executives. It will empower readers with knowledge, tools and techniques through which they can enhance and protect their organisation’s most fragile asset and its greatest risk – its reputation.

It is my aim to make management realise why damage to Reputation is the number one risk organisations face worldwide and to assist them to design and implement robust reputation risk management frameworks that will protect against the destruction of this asset.