Resilience Reimagined


Resilience Reimagined

In search of reputational resilience

COVID-19 confirms for us that moments of truth shape reputation. Peak experiences of an organisation heavily shape our opinion of them. So, in many ways COVID-19 has been a test of character, values and reputation.

Leaders recognise that reputation is a valuable yet fragile asset which is why many executive teams work hard to safeguard their reputation through adversity. We call this reputational resilience – a core pillar of an organisation’s resilience and long-term success.

A foundation of trust and dependability

Reputational resilience has its roots in the traditional concepts of endurance and dependability.

In reputation management, we use a taxonomy to categorise different types of organisations. Until recently the most admired companies were often ‘blue chip’ brands that have endured through the ages, and come through dramatic changes in society and technology. A blue chip, is defined as a "corporation with an international reputation for quality, reliability, and the ability to operate profitably in good and bad times".1

They have a track record of positive familiarity and consistent performance earning deeper levels of trust and brand affinity. These organisations exhibit a core element of reputation resilience - that building reserves of goodwill provides a foundation of trustworthiness and dependability that investors, employees and stakeholders have confidence in.

Resilient organisations use and benefit from reputation in both defensive and offensive ways.

Defensively it works as a shield to protect from negative news and offensively, as a platform to showcase the purpose and character of the company to attract talent, capital and customers.

In times of adversity, it is strength of reputation that helps an organisation to access additional funds from lenders or investors and ensure that customers return after a significant operational disruption.

Getting out in front

Today, reputational resilience is becoming more about being responsive to the outside world, external perceptions and scrutinising irresponsible behaviours.

Brexit, COVID-19, climate change and high profile social and cultural movements make the current operating environment for businesses unpredictable, emotive and complex.

Issues that appeared distant and slow moving a few years ago catch fire at pace today. They materially shape the attitudes and actions of stakeholders. With this volatility comes the reputational risk from misreading an issue or being too slow to support the change consumers want. This can also be the case if an organisation acts too fast on an issue with words, when actions matter more.

Our up and coming research Get out in Front confirms that COVID-19 is a change moment. 40% of respondents2 said the pandemic will make them more likely to be an activist on important issues. Our research also reveals that 38% were actively engaged with an issue in the last 12 months in several ways (donations, marches, signing petitions, joining a movement) and 23% switched their custom to a company or brand who share their values on issues important to them.

In the face of more socially aware consumers, who want to see change happen, organisations have a choice. Smart, resilient organisations adopt an ‘outside-in’ radar, actively looking out for change, and engaging in it, to stay in step with public attitudes.

This kind of reputational resilience requires rigorous monitoring of changing attitudes, agile decision-making, a formal ability to bring the outside pulse into the boardroom and a deft ear to catch the mood of stakeholders.

One practical way is to use prompt, human communications when something goes wrong, rather than risking falling foul with unclear and unhelpful messages when it matters most.

An example of an organisation displaying these qualities is Diageo3, the UK beverage alcohol company. It regularly appears in the top ten list of the most admired British businesses despite being in a category associated with health challenges.

Its reputational resilience derives from its progressive approach to addressing these sensitive external issues4 and consistent leadership on responsible drinking, diversity and supply chain.

Practical steps to build reputational resilience

Organisations need leaders, risk management and corporate affairs teams that work together to navigate a wide range of fast-changing issues. This means:

  • Raising awareness of known and emerging reputational risks with the board and senior management, and taking early action to avoid negative stakeholder reactions;
  • Challenging internal bias and being receptive to uncomfortable truths;
    Tracking a set of reputation resilience indicators such as trust scores, customer loyalty, employee engagement and ESG ratings;
  • Knowing the moments that matter to customers and acting quickly when these are compromised;
  • Consciously building up reserves of goodwill and trust to insure against future risk.

Reputational resilience in adversity

Even the most resilient organisation will experience their moment of truth, and crises tend to reveal how much trust there is in a brand.

Reputational resilience helps organisation’s through adversity. A track record of ethical and responsible actions, alongside effective crisis leadership and communications that resonate well with all stakeholders, supports the organisation to stand up through the scrutiny and duress.

Why does this matter? Whether you are an investor, consumer or employee, when you look at the name of an organisation you will instinctively make a rational and emotional judgement about it.

In an era of uncertainty, we gravitate to organisations we can depend on, we trust and believe in.

Those organisations will stay ahead of the next obstacle and in step with the next opportunity, and will reap the benefits that come with a resilient reputation.

Blue Chip Stock

Deloitte survey of 10,000 ABC members of the public across six markets – US, UK, Canada, Japan, Germany and Singapore.

Britain's Most Admired Companies 2019: Top 10

Guinness goes green - Diageo proud of its sustainability and responsibility success

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