By Laura Newman
It is evident that bankers have now joined the ranks of lawyers and politicians as the targets of countless jokes. I have to admit my favorite is still the Strongbow cider advertisement I saw in the movie theater in London about a year ago. The sequel isn’t bad either!
With this in mind, it may not be surprising to hear that in my recent conversations with Corporate Communications teams at various banks, the main theme of the discussion has been reputation management.
Beyond the reality that it will take time to heal the wounds of the banking industry’s shattered reputation, here are some of the key ideas that have emerged in my conversations:
- Business partners, feeling vulnerable, are all ears about putting in more structure and controls when it comes to reputation risk. Now is the time to think strategically, establishing an effective system to identify and prioritize risk and embed awareness across the organization.
- Since the majority of the industry has been affected, a bank’s poor reputation may not directly lead to losing customers to the competition; however, it is impacting other stakeholder groups, such as prospective employees who may select another industry over financial services.
- Because consumers, employees, and the general public at large can easily access information and share their views online, social media is surfacing more reputation risk. This is putting additional pressure on communicators to stay informed of stakeholder opinions and more broadly, develop a social media policy and strategy. (Did you know only 43% of financial services companies indicate having a social media policy? CEC members, view policies from regulated environments and customize our social media strategy builder.)
As I talk to communicators, I’m beginning to wonder: The financial crisis of the past few years has certainly changed the rules of the game, and so —when it comes to reputation management, do our long-held views remain true?
Over the past few years, CEC has advised Corporate Communications teams with the following three lessons of reputation management:
1. A strong reputation does not impact a stakeholder’s likelihood to select your company over a competitor; it merely allows you to be considered. Once your reputation hits an acceptable threshold, you will have achieved a license to operate, but exceeding stakeholder expectations will not generate the expected additional returns. On the other hand, a strong, differentiated brand will lead to stakeholder preference and willingness to recommend.
CEC members, read our full study on Building Stakeholder Preference Through The Corporate Brand
2. Reputational risks occur when a company’s current behavior doesn’t align with stakeholder expectations. Since stakeholder views can change quickly, it is vital for Communications teams to keep a pulse on what their stakeholders believe and expect of their companies. In the banking sector, for example, this could include views on executive compensation or mobile banking.
CEC members, check out the way that some companies have identified and prioritized their reputational risk, mapping “degree of public sensitivity” to an issue against “strength of company position” rather than the more common “likelihood of risk“ against “impact.”
3. As one Head of Corporate Communications once shared with me, “A company is not living, it is made up of employees; these employees are our brand.” Whether they are official spokespeople or not, your employees are the face of your company; ensure they are well informed and confident speaking proudly about where they work and the position your company has taken on issues.
CEC members, see how one financial services company prepared employees to speak about the financial crisis informally with friends and family.
So what do you think? Are these lessons still true? What has changed with the financial crisis?