Senior executives are facing crisis of confidence

Only one in four business leaders are confident in managing their organisation’s reputation through a crisis, so should we be surprised then that corporate Australia drifts from one crisis to the next? Darren Behar, managing director at SenateSHJ explains.

Glass half-full types will tell you that the Chinese symbols for crisis are ‘danger’ and ‘opportunity’. But the CPA’s Alex Malley, Commonwealth Bank’s Ian Narev and Uber’s Travis Kalanick all recently demonstrated how readily C-suite executives have become far too busy untangling themselves from the dangers to realise any of the opportunities.

Comforting as it may be to reflect on the experiences of others with the benefit of both distance and hindsight, those whose jobs are to build, protect and enhance the reputations of businesses and organisations know all too well that none are immune.

It’s hard to fathom then why the leaders of many successful, mature organisations are prepared to accept that they are unable to manage their communications in the event of a crisis.

The reasons are complex. They are often misunderstood. And they are specific to individuals. No wonder then that business leaders are telling us that the modern ‘crisis’ is more baffling than ever before.

There is a growing sense that a crisis is not just unpredictable – it is increasingly irrational. Unpredictability is something most organisations and executives are adept at managing and planning for, but the illogical or unreasonable defy managerial solutions and the capacity to plan and prepare.

CommBank CEO Ian Narev recently learned about the importance of coping with a crisis

At a recent workshop with fifteen leaders who had experienced a crisis, one thing they agreed was that externally, the story mattered more than the facts. But even the story is hard to predict when it comes to Twitter storms, so-called ‘confected’ outrage and sophisticated online activism.

In the current environment public opinion moves quickly, often lacks nuance and it is increasingly hard to predict where scrutiny will land. Environmental and animal welfare causes have in many respects shown the way. Mining and resource companies will attest that compliance with the law is not enough if public opinion runs against an issue as it has for fracking and Coal Seam Gas exploration.

The demise of the $2.5 billion dollar Gunns pulp mill in Tasmania proves that money doesn’t guarantee success either – even with government support. The NSW greyhound industry, which narrowly escaped being banned by the government, can also attest to the power of public opinion and how quickly sentiment can run against an entire industry.

Examples like this contribute to the growing sense of unpredictability in the C-suite. This is further compounded by the tight timeframes of the modern media cycle, the ‘personal’ dimension of social channels such as Twitter and Facebook and the challenge of engaging with platforms which – unlike traditional media – are often completely unfamiliar to many executives.

Many executives find themselves asking if they or their industry are next, worried that they lack the tools to meet the volatility with action. For the reputation professional or corporate affairs practitioner, the challenge is to counter the fear of the unmanageable in a way which strengthens the fundamentals of organisational reputation.

Reputation management relies heavily on finding the link between a company’s culture, purpose and reputation. Combining this with a thorough understanding of the stakeholder landscape and a capacity to navigate internal and external environments remains the foundation of reputation risk management.

Doing so effectively requires a return to logic and a fundamental focus on the business, customer and operating environment. It may not sound difficult, but the volume and scale of recent events demonstrate the challenge is real.

Building and developing tools such as stakeholder maps and a current, tested communications plan will inevitably expose weaknesses, help identify gaps and challenge long-held assumptions. Not only does this give executives confidence in their ability to manage their reputations, but many business leaders find these activities bring the ‘opportunity’ part of a crisis into view.

Why do you think half of executives’ report reputation is harder to manage than any other risk?

Darren Behar is managing director at SenateSHJ.


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