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A reputation scare can be a point of transformation

October 10, 2019
Borderless Leadership

Our client woke up to find that, according to Google, the most important thing people should know when they searched for his name was that somebody had recently filed a court case against him.

Never mind that this person had spent a professional lifetime building multiple franchises and attaining stature in his field — for potential partners and investors, the court case had become the salient feature of his company and career. He was in the middle of major acquisition conversations when the item surfaced. The deals all began to stall.

This person was lucky in a way that perhaps others are not — his situation was tactically addressable. With the right remediation, the anecdotal reports of his diminished credibility dried up. The big deals got unstuck and life went on.

Is Your Reputation Ding the Sign of a Broken Company?
If your reputation issue is a minor blemish that can be buffed out in a few month’s time, then you’re in splendid shape. But what I see again and again is that reputation issues are a symptom of something much more serious — sometimes even a company that is fundamentally broken: a member of the board or senior management has jeopardized the brand and visibly dented earnings by creating a personal ethical crisis or bungling a response to bad news from the marketplace; further down the chain, deep reputational audits (including things you can’t see with casual searches) reveal fragmented operations, fuzzy value propositions and deep, enterprise-wide customer experience issues that are measurably degrading a prospect’s likelihood to believe and buy.

These symptoms require more than a mechanical response or a “point solution” from a one-trick vendor. In fact, rushing to this kind of solution may do more harm than good. Based on my experience, here are a few of the common traps that companies rush into when they face a reputation crisis—missing the opportunity to turn their “moment of truth” into a rapid and focused relaunch of their company.

Hiring Servants Instead of Peers
Hire a marketing agency to fix what you perceive as a tactical reputation issue and you’re immediately in the wrong conversation: The critical diagnostic phase will be framed in terms of selling you services and projects. In the course of this work, you may very well find some of the visible and obvious issues being addressed, but you’ll miss deeper strategic opportunities because both parties usually fall into the familiar rhythm of the “run and fetch it” client-vendor dynamic.

To make your turnaround possible, you’ll need a co-strategist who knows how to talk to CEOs and their boards, has not been drinking the company Kool-Aid, and will challenge you with questions about the very foundation of your business. In the course of this work, you will produce the marketing plan that a narrow-band vendor will happily charge you $50,000 for, except this one will be more actionable because it begins from a deeper, shared strategic rationale.

Even seasoned CEOs fall into the “operator” mindset and succumb to massive blind spots from which reputation problems originate. Moreover, few of them have ever had to author an effective turnaround plan in the heat of battle. Even the most capable marketing agencies rarely have the business acumen, operational vision or fortitude to not only effectively fix short-term issues, but steer you to more prosperous long-term waters.

The Turnaround Plan Comes from the Board or C-Suite
This is another red flag: board members and senior management notice a marketplace reputational threat (or somebody carries it up the chain to them), and they spring into action with marching orders to “just get it fixed.” There are numerous dangers here:

• In my experience, senior stakeholders do not know the root cause of the problem. They issue orders to put out a fire, not knowing where that fire started, why or when it may break out again. In terms of finding the root cause that unlocks better market position and long-term brand revenue, money and opportunity have been squandered.

• Except for the weight of senior management’s authority, the turnaround plan will not be credible to the execution layer. This is directly related to the bullet point above: a turnaround plan must tie together the goals of the board with the rich operational and strategic knowledge of the whole organization. Being able to not only diagnose deep strategic liabilities, but tie together management and the execution layer to enact the plan is an art and a science.

Providing the desire for transformation exists at the leadership level, your reputational crisis is the launching point for reexamining your talent, the way you’re measuring your efforts, and the operational foundation of your processes. By engaging in the fearless deep-dive, we have seen companies not only solidly address their reputation issues, but come out the other side with better talent, better KPIs, better systems and even fixed costs of marketing lowered by as much as 50%.

By Colleen Birdnow Brown

Source: Chief Executive

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