Crises Impact on Reputation Management

Success does not happen overnight, but failure often does. Businesses and other organizations will always face critical moments. Therefore, the effort to control negative situations continues to become more sophisticated. "Reputation management" is the newest buzz phrase in the public relations field. To those of us long-involved in crisis management, this new phrase seems likely to stick. In fact, among those who maintain a practice in crisis management, it appears that what we have been doing all along is really reputation management. The reason for this new and more intensive focus is simple: A good image is a terrible thing to lose! It has been said that 30 years of hard work can be destroyed in just 30 seconds. And, while that might seem melodramatic, don't try soft-selling its meaning to Exxon, Johnson & Johnson, Pepsi-Cola or the GM Truck Division. Crisis management is a plan of action to be implemented quickly once a negative situation occurs. Reputation management is a strategy that is used all year long, utilizing a proactive approach. Is it possible that by the year 2000, reputation management will be the dominant force in public relations? A strong case can be made for that eventuality. Crisis management is evolving into reputation management for a number of reasons. First, this new phrase should attract more attention from top management. Presidents and CEOs don't often want to think about potential crisis situations. For many executives, a crisis is something that happens to someone else. It is a distant thought that can quickly be relegated to the back of the mind, replaced by concern for profit and productivity. So, the phrase "crisis management" may not sell well at the top. But every executive must be concerned about the reputation of the company or organization. Second, more and more organizations are facing situations that have real potential for harming their reputations. In the '80s, crisis management became hot after the Exxon Valdez oil spill, dozens of cases of product tampering and a plethora of corporate embarrassments at the executive level. But in the '90s, we have a "crisis" almost every day. These crises have become much more bizarre and unexpected than those of the '80s. What happens when an AIDS-infected employee is eating in your company cafeteria, and most employees refuse to come to work? Or, when half of your company is bought by a Japanese firm and you hold a ceremony to announce it on December 7? Or, perhaps you operate a Catholic hospital which is opposed to abortion and one of your young doctors performs one anyway. These are all cases I have dealt with in the past year. In each case, the organization's reputation was at stake. While client confidentiality will not permit me to outline specific strategies used in each of the three crisis cases mentioned, handling them demonstrated the two major aspects of the relationship between crisis management and reputation management. First, communicating quickly and proactively in a crisis is mandatory. When your reputation is at stake because of a crisis that occurred one hour ago, it is not good to call a meeting to discuss strategy. Second, the most important rule in defending, preserving or enhancing a reputation is that you work at it all year long, regardless of whether or not a crisis strikes. Media affects perception According to the Institute for Crisis Management in Louisville, KY, news stories on class action lawsuits against organizations went up 538% from 1991 to 1992. Coverage of business crimes rose 328%. Certainly, these incidents created crisis situations, but in the long run, it was the public's perception of reputation that mattered. This is an important point, because the media are concentrating more on these types of stories. The June 1993 issue of Public Relations Journal reported that news coverage of business crises in 1992 increased 45% over the previous year. …