Argyle Commmunications

Daniel Tisch, National Post

The stories are frequent and familiar: Canada’s most beloved coffee chain fires (and later rehires) a server for giving a child a free doughnut. An ice-cream retail franchisee ejects a group of autistic children from a patio. A car-rental company employee is caught on video abandoning a long lineup of customers, flipping them a sarcastic salute in the process.

Operational gaffes often cause short-term heartburn for public-relations professionals. On occasion, however, they cause large-scale or long-term damage to that critical yet intangible business asset: reputation.

Can businesses plan for the unplanned, and anticipate threats to corporate reputations? The answer is yes. Consider why scenario planning makes sense today.

First, the decline in trust in businesses following the recession’s start is well-documented.

Second, the emergence of Web-based participatory media means that small operational risks can become huge reputational risks. You probably heard about at least one of the big-brand case studies cited above — and the odds say you saw it on the Internet.

Third, many corporate communications teams have been decimated by recessionary cutbacks, which means their organizations are less informed about their stakeholders than at any time in recent memory.

And fourth, there is more evidence than ever that reputation comprises a large part of the value of a business. According to Predictiv, a consulting firm that specializes in the valuation of intangible assets, these assets represent anywhere from 50% to 80% of a company’s market value.

We are seeing what I call a paradox of control: Never have we had less control over what others think about us, and what they do with that knowledge. But never has it been more critical that we control the message conveyed by our organizations. In the words of Douglas Reid of Queen’s School of Business: “We own the balloon, but everyone else owns the pins.”

Here are three things that every business can do today to improve its control over the reputational risks of tomorrow:

Take stock of stakeholders

Successful businesses regularly evaluate their stakeholder relationships. This means researching the attitudes and behaviours of any audience that is critical to business success — e.g., customers, analysts, employees, regulators and communities. Some of these relationships may have been frayed or neglected over the past year. Understand what matters to your stakeholders. Know what influences them, and what they expect from you. Segment and analyze the data. And, of course, consider how your competitors are communicating with these same audiences.

Internalize, analyze and act

Create a team that represents all functions within your organization. Engage the team in analyzing, understanding and anticipating your vulnerabilities, and the potential triggers of controversy. Equally important, consider the issues that emerged from your stakeholder consultations, and catalogue what you are doing about them. Gather verifiable facts that will sustain your claims. Consider where you stand in your industry: are you a leader or a laggard? Develop an action plan to achieve, protect and communicate a position of leadership.

Influence the influencers

Too many executives still view public relations as a one-way process of announcing good news and/or putting a positive “spin” on negative issues. In 2009, the news release is the beginning of public relations, not the end. Good PR is about developing sophisticated relationships not only with your audiences, but also with those who influence them. In a skeptical era, your stakeholders will be influenced by trusted third parties: consumer advocates, NGOs, community leaders, journalists and each stakeholder’s peers. The successful business reaches out pro-actively to build relationships with these influencers, based on a mutually beneficial, two-way exchange of information that builds trust over time.

While scenario planning is one of the lost arts of business, it’s more critical than ever. Thanks to a potent combination of technological and attitudinal change, scrutiny of business is happening more quickly and comprehensively than ever before. In the Internet age, the news cycle has never been shorter, and yet its online legacy has never been longer.

The good news, however, is that while stakeholders are more easily enraged, they are also more easily engaged. When a reputational crisis breaks, the business that knows its stakeholders best — and enjoys the strongest relationships with them — will recover far more quickly.

As Tim Hortons’ enduring connection with consumers shows, reputations can survive and thrive notwithstanding a tempest over a Timbit. And as the smartest executives know, the business that assesses its stakeholder relationships, engages influencers and turns analysis into action will invariably enjoy a competitive advantage — in either recession or recovery.

— – Daniel Tisch is president of Argyle Communications and Canada’s representative on the board of the Global Alliance for Public Relations and Communications Management.