You Need Some R&R: Take Steps to Mend Your Company's Reputation

By Dario Bernardini

The past year has been tough, to say the least. A global economic crisis, falling stock prices, and new legislative requirements may have left you feeling a little punchy and your bottom line taking a beating.

While your company begins to recover financially, it’s time to address something else that may have been damaged: your company’s reputation. What it probably needs right now is some “R & R” – but we’re not talking about “rest and recreation.”

In this case, “R & R” refers to responsibility and relationship building – both of which can help repair a damaged corporate reputation.

Reputation has increasingly been acknowledged as something of value for companies. A positive reputation can improve the prospects for an enterprise, making it easier to raise capital or overcome a crisis. But in some cases, corporate reputation has been eroded over the past 12 months. Applying some “R & R” can help turn the tide.

Take Responsibility

Corporate executives need to accept responsibility for problems and quickly implement steps to ensure the mistakes will not be repeated. During this process, they need to constantly communicate to all stakeholders the steps they’re taking and why they’re taking them. Two examples show the wisdom of this approach.

It’s been nearly three decades since former Johnson & Johnson CEO James Burke ordered a recall of 31 million bottles of Extra-Strength Tylenol because some of the capsules had been tainted with cyanide. Burke and his management team have been lauded for their response to the incident, which likely saved the brand. They accepted the $50 million cost of the recall and demonstrated a concern for the customer above anything else. Moreover, they adopted an open-door policy with the media to reinforce the message of trust.

Tylenol regained more than 80 percent of its market share within a year and, to this day, the incident has become a textbook example of how to deal with a crisis. Johnson & Johnson management realized that the company was not to blame for the incident, but accepted responsibility for solving the problem anyway.

In another example, company management accepted responsibility for a tragic incident after realizing that its staff was the cause of the problem. In the mid-1990s, the Dana Farber Cancer Institute in Boston was found to have given breast cancer patients unhealthy doses of a chemotherapy drug – resulting in the death of a Boston Globe columnist and permanent heart damage for another woman. The Globe published a series of reports on the incidents, and as a result the state opened an investigation.

The institute’s management responded with candor by opening up to the media. It acknowledged the mistakes and took actions to prevent these kinds of errors in the future. The institute eventually became recognized as a leader in patient safety.

These examples illustrate the importance of corporate executives acknowledging responsibility for problems and taking steps to address them. They understood that maintaining the company’s good name for the long term was much more valuable than any short-term financial setback.

Check on Relationships

Reputation is a cognitive process of recollections and perceptions of stakeholders about an organization; that is, what people think about a company based upon their relationships with the company and other information they’ve seen or heard.

Because stakeholder perceptions are strongly influenced by these relationships, it’s important for your company’s executives to effectively manage them. If a relationship is based on trust, commitment, and mutual satisfaction, then your stakeholders will likely hold a positive view of your company and will react more predictably.

To effectively build quality, long-term relationships, your company should attempt to balance the interests of the organization with the interests of your stakeholders. Achieving that balance involves developing good listening skills, asking stakeholders what they think about an issue, and maintaining communication with them.

By taking responsibility for mistakes and communicating openly with your stakeholders, your company can repair damage to its reputation and demonstrate that it plans to be around for the long haul.

About the author: Dario Bernardini is a communications consultant and adjunct professor of communication. He has extensive experience in the development of strategic public relations and communication programs. He holds a master's degree in communications management from Syracuse University and has examined how top companies manage the communication function and organization reputation. He can be reached at: dario54@verizon.net.

Copyright © Bon Mot Communications LLC 2009

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