Public trust in business, as with politics, has deteriorated over the past three years. Companies need to do more to win back hard-won trust, argues Allan Biggar, Founder and Chairman of All About Brands plc
As I wrote in the marketing newsletter at the beginning of the year, there have been an unprecedented number of CEO transitions taking place in some of the UK’s biggest companies.
Of course, many of them will be overwhelmed by the volume of information they need to assimilate and the immediate decisions they need to take, some on only limited understanding of the facts to hand. Even for those who have been ‘groomed’ as successors in the best tradition of corporate succession planning, the enormity of the job may still come as a surprise.
Perhaps the biggest challenge they will face is how to live up to expectations, both internal and external. As with any new senior appointment, people will have preconceptions, hopes and, in some instances, fears about what the ramifications will mean. It’s a challenge of reputation and, as I discussed in the February edition of the newsletter, it’s one that needs careful attention.
But there’s another element to this story. And that’s the steps senior, high profile CEOs need to take in trying to restore public confidence in the role of business. Let’s be brutally frank; the standing of business took a hammering as the banks collapsed. The remuneration of FTSE350 CEOs is under intense scrutiny as the wider public remain vigilant to signs of excess at a time when they are being hit by lower incomes and rising costs.
The annual banker-baiting which we’ve witnessed over the past month with the announcement of banking bonuses has now become a regular, if unedifying spectacle, in the corporate calendar.
The demands on a CEO as an ambassador for good corporate conduct have never been greater. As Unilever boss Paul Polman so eloquently puts it “what we have experienced over recent years is not, in my view, so much a crisis of capitalism as a crisis of ethics”.
Supporting that assertion is a recent McKinsey Quarterly survey of senior executives finds that the large majority agree that public trust in business and a commitment to free markets has deteriorated (85% and 72% respectively).
One of the survey’s conclusions is that, while most businesses have proved adept at managing their reputations through conventional outlets - mainstream media, TV and the like – they have been swimming vainly against a tsunami of web-based communications, increasingly influential NGOs (non-governmental organization) and the backlash from declining trust in advertising.
Together, these new forces are promoting wider, faster scrutiny of companies and ‘rendering traditional public-relations tools less effective in addressing reputational challenges.’ CEOs, take note, and begin embracing Twitter and Facebook!
CEOs have an obligation to bolster their own collective reputations and of the companies they lead. Afterall, if business flounders due to a lack confidence, the public will hurt all the more.
So how can CEOs start the process of rehabilitating their reputations and, more importantly, those of their businesses, when they are focusing on the bottom line and, ultimately, on survival?
Well, here is my five step guide to CEOs to restore faith in business:
1. Reputation management is a company wide issue and not just one for the corporate communications or marketing team. PR and Marketing will need to take the lead - but input from technology, HR, legal and others is essential. Ownership must be a collective responsibility and that can only come from firm leadership and direction.
2. Spend time and money to hire and develop new expertise to help you navigate digital and online communications effectively. Companies need to invest not just to understand it, but so they can keep pace with it. And CEOs have to lead from the front on this.
3. Highlight corporate initiatives that support the community and are green, inclusive, educational or non-profit making in nature. Managing your corporate responsibility well is a good insurance policy and can win over grudging respect from consumers and other audiences.
4. Does your brand and brand strategy stand up to scrutiny? Is it time to refresh and overhaul it in the face of increased competition or other external pressures?
5. Make yourself aware of emerging issues and particularly those that can impact your reputation. Task your communications team with carrying out a thorough review of your stakeholder relationships - that may involve revisiting and refining existing relationships, and most likely nurturing new ones.
By building the reputation of your company and CEO, we begin the process of rebuilding the standing of business as a whole.
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