• Daisy Powell-Chandler

Corporate reputation and the virus

The current crisis is fraught with reputation risk. The greatest protection against this comes from patient preparation and making stories human.

Novel coronavirus has swept away certainties across the globe. Food supplies, VPN capacity, governments – how many more will be found wanting? The final reckoning will include plenty of companies.

There will be companies that topple under the financial strain of the crisis itself. Already we are seeing the first signs of this, with Debenhams and Cath Kidston calling in administrators. Still more will struggle with the changing realities of a post-viral world, their products or methods no longer fit for purpose.

A further tranche will be wounded by reputational damage. There are two types of reputation hardship to consider here: self-inflicted ‘corona wounds’, and a lack of goodwill stored from before the crisis. Each of these brings its own challenges.

Man working at laptop, wearing a face mask
Reputation in the time of the virus. Photo by Dimitri Karastelev on Unsplash

Some businesses have not had a good crisis so far. Sports Direct and Wetherspoons were perhaps not surprising offenders but Virgin also ran straight into the crosshairs of public rage and many smaller businesses found their desperate attempts to save money by cutting staff were suddenly being circulated on twitter for all to rage over. This reputation damage will not be the end of the road for most organisations but they will cause harm by damaging employee and customer trust, reducing the licence to operate and comment, and generally diminishing the goodwill enjoyed by these companies. (If you are trying to avoid these mistakes, why not take a look at our strategy in a crisis cheat sheet).

Other organisations are currently demonstrating why a poor reputation is a problem. Banks, on paper, have had a pretty good crisis. They were amongst the first large organisations to put in place social distancing measures. As an industry they worked swiftly and proactively with the government to process swathes of new programmes to support British business through the turmoil. Systems like this normally take months to build but banks put in place entirely new products in hours. Then they were lambasted for it.

Yes, the rollout wasn’t flawless but, well, duh. And it turned out that the government’s rules for business loans, written in great haste, required banks to ask for personal security from business owners. But instead of blaming the rules that banks were following, the whole mess got blamed on the banks. Why? Because when given a choice between a relatively popular Government currently fighting its way through a national crisis and a bunch of ne’er-do-well blaggers who we wouldn’t trust further than we could throw them, we blame the bankers. “It turns out,” said one very tired insider “They still hate us.”

The moral of the story? You can’t build the sprinkler system when the house is already on fire. A great reputation is like an efficient sprinkler system: if little fires emerge, the sprinklers come to life and damp them down. A well-loved brand can apologise, call upon years of excellent behaviour and ask forgiveness. They are left soggy but essentially intact. With no good reputation to shield them, the banks are the equivalent of a straw house with no sprinklers. Even a tiny spark, or the heat from a neighbour’s fire is enough to start a blaze.

This is a useful reminder for any organisation that has poo-poohed the need to measure and improve their corporate reputation but it might also seem a touch unhelpful to point out that the best remedy is to have prepared five years ago. Here then is a second piece of advice that can be enacted now: make your story human. The emotional intensity of the current crisis means that reputational damage will be magnified. More of us will feel a personal wound from corporate bad behaviour because everyone feels a bit emotionally overwrought right now. It stands to reason that positive reputation building is possible but it will need to resonate with us on a human level. The Virgin and bank loan stories are horrifying because we empathise with the business owner asked to put their house on the line, or the ground staff told to take eight weeks off without pay. Banks will struggle to make positive reputation gains until they succeed in making their work seem personal and that is something that they have failed time and again to do.


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