To say 2020 has been a significant, if not momentous year, is an understatement. It may well mark a turning point for business as we know it. COVID-19 has accelerated an already hot debate around how companies protect trust and reputation in the face of crisis, and how they engage employees as advocates when times are tough. Furthermore, major geopolitical tensions plus a US Presidential election, the rise and rise of fake news and a renewed focus on stakeholder capitalism, means increased challenges for business.
The confluence of these trends together with the societal expectations, as seen in the special Edelman Trust Barometer COVID Report, that businesses need to be doing more, offers unique opportunities for the corporate affairs role to particularly focus leaders’ attention on reputational risk…
In this session, Janie Jordan, reputational risk expert, high-stakes communication and author of the acclaimed book, The Four Highly Effective Stages of Crisis Management walked us through the following topics with some very recent case studies.
There is palpable anger and distrust with the idea of capitalism and the role of business in many societies. One such indicator is increased political polarization in many countries, even in well-established democracies. Economic issues are often—and perhaps always—a source of such discontent. Another indicator is the most recent Edelman Trust Barometer. Published in January, shortly before the COVID-19 pandemic changed the world, the report includes a survey of 34,000 people of which 56 percent believed that capitalism was doing more harm than good globally, with majorities in 22 of 28 markets surveyed.
As economic players, business people cannot stand offstage, watching the action—and the same survey found that people don’t want them to. Ninety-two percent of respondents said that companies should be speaking out on issues such as training, automation, and immigration, with 74 percent pointing to CEOs to take the lead. With the onset of COVID-19 and the wealth of information available, even those who would like to stay out of the action will find that, more and more, their employees and customers are demanding otherwise. The business ecosystem is evolving; those who resist will find themselves not only on the wrong side of history, but also at a competitive disadvantage.
Culture eats strategy for breakfast
Saying the right thing, is not the same as doing the right thing. Employees across all industries have zero tolerance for discrimination and harassment. Your employees must believe in what you are doing and be involved in employee advocacy. Employees must feel as though they can bring their concerns to the organisation (internally) rather than to the media. Look within your organisation to determine – is there an appetite for doing the right thing?
Calling out bad behaviour
When calling out others it is best to stick within your framework/industry. As a business you can’t be everything to everyone so have a set list of issues for which to advocate. If you are going to be outraged about something you need to back it up and do something about it. You need to take action. Your outrage needs to be fact based and not called into emotional dialogue.
Reputation is about action and advocacy
What is clear is that the organisations that are thriving are those that are putting people before profit, they are leveraging their networks and really digging into stakeholders. Businesses should know their supply chains. Consumers place twice as much value in ethical businesses than competency. We are seeing trends in changing the structures of businesses. The structure is being changed to benefit all of society, instead of being structured to make profit and benefit only stakeholders.
We will continue our ‘Trust and Reputation’ conversation with Janie at our next Trans-Tasman Corporate Affairs Dialogue webinar in December. Details to come.
About Trans-Tasman Business Circle
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