Building reputational resilience

Why being prepared to withstand crises before they hit is just as important as the crisis response itself.

The October 7 Hamas attack on Israel and the subsequent Israeli invasion of Gaza reminded many businesses that reputation-impacting events are often well outside of their control – but how they respond (or don’t) can quickly cement their reputation in many stakeholders’ eyes. Whether you plan for it or not, reputational challenges are coming for you and ignoring them isn’t an option.

There is no shortage of reputational risks that businesses face, and in our digitally connected yet highly polarized society, responding thoughtfully and authentically to these risks can mean the difference between a full-blown crisis and an opportunity for stakeholders to see your values and exceptional leadership. These situations demand skilled communications strategists, an established response plan, coordinated deployment of thoughtful messaging across channels, and a diverse, collaborative team that can protect against blind spots.

But that’s not what this article is about. The habits an organization needs to develop before a crisis hits require as much attention as the crisis response itself. We believe these behaviors come together to build reputational resilience that can have an outsized impact on how companies ultimately weather and rebound from a crisis.

Prepare for heightened public scrutiny 

Corporate reputations are under attack from every direction and need to be built sturdier than ever. Public criticism of evasive, incomplete or inauthentic responses to the Hamas-Israel war is just the latest example. Tomorrow, it may be environmental activists bringing attention to missed ESG goals. And the day after that, consumer groups blasting an organization’s halting and inconsistent response to a data breach.

But while no organization is flawless or immune from criticism, not all companies are equally vulnerable to a full-blown crisis. Some have carefully cultivated a reputational foundation built to withstand heightened scrutiny.  Building a strong reputation takes more than manipulating brand image and public perception. It’s an exercise in corporate self-improvement, doing the work and embracing the behaviors that lead internal and external stakeholders to reach their own positive perception of your company and its leaders.

Too often, this point gets lost in conversations about crisis management. No doubt, navigating through the eye of the storm is crucial. But successful outcomes, particularly over the long term, are usually a result of the preparation undertaken in the preceding weeks, months and years. We refer to this as reputational resilience.

When facing a crisis, many organizations may feel that they have to work with the cards they’re dealt. But they fail to realize (or conveniently ignore) that their reputation is largely within their control, and as a result, so is the lasting impact of that situation. People will develop their perception of your company based on the information you proactively put out into the world. If the public is misinformed, or your positive behaviors are hidden, people can come to an incorrect conclusion about who you are and what you stand for. In other words, a durable counternarrative makes it less likely for a criticism to stick. Show your audience what you believe now so that later, when the going gets tough, they have evidence of not only your good intentions, but your integrity.

A major sticking point for some companies? Humility. Managing perception requires organizational self-awareness. Nothing torpedoes a business more quickly than blatant dishonesty and stubborn resistance to candor and transparency. This means having tough conversations, acknowledging where you can do better, understanding and living your core values, and being candid when you fail to uphold them. For those who do, weathering a crisis is more manageable.

Build organizational awareness with words and action 

“The way to gain a good reputation is to endeavor to be what you desire to appear,” said Socrates. But corporations today are too often more concerned about what they say than what they do.

For instance, “corporate values” too often amount to making public statements or putting words on a website. Yes, those messages are important. But companies can’t speak their values into existence. They must make sure those values are widely understood within the company to ensure that team members will actually adopt behaviors to advance those values. And this work begins well before any crisis scenario rears its head.

Authenticity means the alignment of what one thinks, says, and does. Corporate values are the touchstone by which we evaluate the authenticity of an organization’s crisis response. Making overly ambitious or vague statements about societal issues that a company cannot meaningfully impact is not authentic. It might even be damaging if the media or other stakeholders call it out. Similarly, pushing out bold public pronouncements that are not reflected in past behaviors will feel to your stakeholders like manipulation.

Those risks are why reputational management needs to be systematized and cross-functional. As NYU Stern School of Business professor Alison Taylor has argued, the communications team cannot be the sole proprietor of the values function at a company. “We seem to have developed this view that taking a public position is somehow an end in itself,” she recently said on Buston University’s Crux of the Story podcast. “We cannot treat communications as divorced from what the company is actually doing.”

Tell stories that communicate values 

While we want to emphasize behavior over talk, we are not arguing that communicating values is unimportant. To the contrary—it’s essential, but it has to be done in the right way. And the most effective tool for that task is a story. Stories are where behaviors and messaging meet.

Neuroscience supports the effectiveness of stories. It shows our minds are not especially adept at processing and internalizing complex data and facts. But we are good at remembering stories.

Berkeley Haas School of Business professor David Aaker has published research on the effectiveness of “signature stories” that can highlight a company’s organizational values and inspire employees and customers. These stories often feature a hero—a customer or employee—who acts in a way that helps define the company’s mission or ethos.

These stories can play an important role in rebounding from a crisis. In his book Creating Signature Stories, Aaker cited the example of Barclays Bank, which had taken a reputational hit following news of an interest-rate rigging scandal. To regain the trust it lost with the public, it announced a new purpose: “Helping people achieve their mission—in the right way.” It also developed stories featuring individuals who benefited from the bank’s new initiatives, which ultimately helped rebuild trust with the public. If developing those storytelling muscles had not been a priority, it’s not clear that Barclays would have been as successful in weathering this crisis.

But powerful stories are helpful not just when attempting to rehabilitate corporate reputation after a crisis; they are even more impactful (and likely to be perceived as authentic) when nurtured and shared before a crisis ever hits. If people know you are operating with integrity, making a positive impact, and treating your people and consumers well, they will be far less likely to interpret one bad act or messaging mistake as indicative of a toxic or negligent corporate culture.

Crafting impactful stories is not easy, of course. Identifying your audience should be step one. Prioritizing internal audiences with these stories is essential. Energized and inspired employees can be among the most effective brand ambassadors. Those stories can also prepare employees to navigate crises by reminding them of the company’s core values.

Show vulnerability and courage 

Trust is one of the most precious commodities in business today. In industries where customers can take their business away with less friction than ever, trust can be the difference between a company staying in business or going under. To maintain trust, leaders must be ready to acknowledge when their company’s actions fail to match their values.

Showing vulnerability is not a weakness. Often, it’s a sign of strength that can have several benefits. For one, it helps build trust with employees, customers and other stakeholders. It also helps foster open dialogue internally. Employees who know they can admit mistakes are more likely to share and correct them rather than hide or defend them.

For many, showing vulnerability is not natural. That’s especially true in a crisis, where the default reaction is a defensive crouch. But this rarely engenders trust. Like any other habits, showing courage and vulnerability takes practice. But the more you do it, the more it will pay off when it counts.

Clay Steward and Kelsey Eidbo are vice presidents at Infinite Global and members of the agency’s Crisis and Litigation PR Group.

Reprinted with permission from the December 30, 2023 issue of O’Dwyer’s January 2024 Crisis Communications & PR Buyer’s Guide Magazine.