A recent survey of Australian and New Zealand companies by the PR company, SenateSHJ, found that more than half of executives surveyed reported that reputation is now harder to manage than any other risks.
What the survey didn’t investigate was the extent to which company executives were themselves the source of reputational risks and damage. Two recent cases illustrate the problem. The first is the long running NBN saga. The NBN organisation – not content with offering an expensive second rate product – is now blaming its customers for the problems. Faced with consumer anger about slow speeds and high costs the company has blamed customers for not knowing what speed they are receiving and a lack of awareness of speed choices.
Similarly NBN is trying to blame contractors who make final connections, or the quality of internal wiring in customers’ premises, for various problems. Now the blog isn’t qualified to judge the internal wiring problem but it does know that many people employ their own contractors for the final connection because the alternative is having the NBN contractor resort to the cheapest and quickest connection even if that involves crude measures which detract from a property’s aesthetic qualities and damage historical and architectural features. The blog also has to admit to a large degree of prejudice about NBN as the connection it is likely to get (despite living a few kilometres from the centre of Melbourne) seems unlikely to arrive for some years and, even then, will rely on a third rate connection system.
But then, according to the NBN customer service approach, that’s probably the blog’s fault and not NBN’s.
An equally astonishing example (brought to the blog’s attention by Tony Jaques) of the blame the customer attitude is Honda’s response to the situation in which a Sydney driver was killed earlier this month by a faulty airbag. The company responded to a query about the incident by saying the driver had received five recall notices over the past 16 months but had not brought the car in for the replacement air bag which could have been fitted in less than an hour.
Now there are many possible reasons for the driver’s lack of response. They may have been unthinking; they may have been part of the overworked and underpaid and simply couldn’t find the time; they may have been unable to do without their car and – despite the fitting only taking an hour – that doesn’t account for travelling time and other problems.
Worse, even if the airbag had been replaced the driver might have been as unlucky as those 42,000 Honda owners who had the faulty airbags in their cars replaced with airbags identical to the potentially fatal Takata airbags which were subject to the recall.
This seems to be a classic example of how what looks like a good idea at the time can make the problem worse. Honda obviously made a mistake on privacy grounds –let alone in terms of compassion for the victim’s family. Worse, the disclosure could even have some financial impacts for the family. It should be said that the issue of contacting people about the recall and not getting answers is a legitimate one to raise – it’s just they could have done it in a different way. The result – what looked like a good idea to someone or other at the time resulted in adverse publicity and potential brand damage.
In the NBN and Honda context it is worth looking more closely at the Senate SHJ survey results. According to the survey risks to reputation have grown significantly over the last three years, with almost 75 per cent of executives surveyed having witnessed an increase in risks affecting reputation.
“Ninety-eight per cent of respondents told us corporate reputation is one of their organisation’s primary assets, up from 96 per cent in last year’s study,” SenateSHJ said.
The survey also came up with a finding which casts new light on the traditional crisis/issues response which dictated that the most senior person ought to be the spokesperson on the problem.
The survey found that “business leaders across all industry sectors in both countries believe the chief executive is the most trusted source by the public in a crisis, however New Zealand respondents gave the chief executive a much lighter weighting, at 39 per cent, compared to their Australian counterparts, at 74 per cent. Both countries rated external experts and the media as sources trusted by the public in a crisis, with the respondents in Australia believing the public are more likely to trust employees than the senior executive team.”
Business Council of Australia members lecturing politicians and the public on what’s best for Australia might well ponder the broader implications of this finding.