There has been no respite for the economy and the business sector. The pandemic caused by covid was followed by the outbreak of war in Ukraine, pressure on global trade, rising energy prices, inflation and rising production costs. The complex economic situation has been compounded by political and regulatory uncertainty.This concerns the national, but also the international framework.
The likelihood of companies facing some kind of critical situation is rising.. There are many fronts that can threaten a company: from labour disputes to cybersecurity breaches to legal or environmental issues. But they all have a common denominator: are crises that directly attack reputationThe potential for serious damage to the image and confidence of the firm and its management.
We talked to Yago de la CiervaCrisis Communications Director at PROA Communicationteacher in IESE Business School and author of the book Leading Companies through Storms and Crises: Principles and Best Practices in Conflict Prevention, Crisis Management and Communication (2018).
What kind of reputational risk situations are companies facing today?
Companies face three types of risks. The first two are well known: the physical risks specific to their business, such as the possible toxicity of a product for the food industry, an accident for a transport company, etc.; and those related to any human organisation, for example, a confrontation with a group of employees or a trade union, a shameless manager, an official who wants to abuse his power, etc.
But there is a third type that is more difficult to manage, because they are new risks: those related to changes in the social environment: boycotts of different activisms, public scandals due to the gap between corporate principles and the prevailing values in their context, angry reactions in social networks due to a mistake in the strategy such as the greenwashingand many others.
All have an impact on the company's reputation, but the third group, which are primarily reputational because they affect stakeholder perceptions, require more contextual intelligence than the others, as well as more creative solutions.
Do the speed at which information circulates and the virality of social networks increase the potential for a crisis to cause harm?
The feature of social media that has the biggest impact on business is not its speed, but above all its ability to mobilise my stakeholders, both for and against. Speed has an impact in the sense that the company's response has to be much quicker. We used to have three or four hours to decide on strategy, and now sometimes we need to respond in a well-considered way in 20 minutes.
In this context, prevention seems essential: how should a company or organisation prepare itself to be able to react appropriately?
The only effective crisis management is prevention: anything else is pure damage management. Prevention is always better than cure. But it is not enough to know it, it has to be implemented. We prevent with a well-done risk analysis, leading to measures for risk elimination or minimisation, risk transfer and crisis preparedness: a plan and internal training.
What role does an expert crisis communication management consultancy play before, during and after the risk event?
An external consultancy brings three benefits: first, extra talent at times when managers themselves are overwhelmed with day-to-day activity, yet it would be imprudent not to prepare for a real and near risk; second, best practices that may not be known internally; and finally, an antidote to the bubble vision of managers who are "too sure" that it can't happen to me, or if it does I am already prepared to respond well and on the first try without prior training.
A particularly sensitive case for a company is that of an ERE or other type of labour conflict. Tell us some of the keys to how you have contributed to managing such a crisis.
Every company has a business strategy and good companies also have a non-business strategy. That is, they do not have a relationship with their stakeholders that depends on the moment, on the creative inspiration of the leader or on a circumstance of the past, but rather there is a concrete plan (with objectives, initiatives, timetable and budget) to win the benevolence of all of them.
When problems like the ones you mention arise, we help companies to think in the long term and find solutions that ensure the company's future. Sometimes they are not the cheapest ones, but the ones that help to regain trust, which is the treasure that is squandered in a badly managed crisis. We help to remind the company that shortcuts may be good today but very bad tomorrow.
Is it possible to recover one's reputation after a badly managed crisis?
Of course, unless the scandal is huge and we have lost all credibility, there is a chance to redeem ourselves. That is why it is so important to respond well to a crisis: because there is always salvation, if what we do after the crisis is the right thing to do. Sometimes we think that the most serious thing is the mistake or the problem that caused the crisis, but in reality the worst thing is the wrong response.
The same applies to managers. Professional life does not end after a crisis, even if we leave the company, if we have done what we should have done at the time. That is why crisis training and coaching is a very good investment of time for managers in any organisation.
If you are interested in learning more about our anticipatory and crisis communication management services, or require further information, please contact us at: info@proacomunicacion.es.
*The content of this interview may be reproduced and disseminated by mentioning PROA Comunicación as the source.