“It takes 20 years to build a reputation and 5 min to ruin it. If you think about that, you will do the things differently.” says Warren Buffett. In business, reputation is everything. That said, reputation is very fragile, and it only takes one mistake to cause irreparable damage to your company’s image. In a previous article, we explain how insurance cover can be helpful to protect your business reputation. However, insurance is only part of the solution.
Starting from a real case, we have asked an expert in crisis management to share with us quick tips to save your business reputation.
One of our clients in Hong Kong has built a reputable business in the service industry with a high level of satisfaction for its existing clients.
Business has been growing over the years mainly thanks to a very positive world of mouth. Unfortunately, a business-related incident occurred leading to a light prejudice to one of its clients.
While waiting to get financial compensation from the insurance company, the very unsatisfied client is threatening the company to come over to the office with the police, to alert the media, to post bad reviews online and finally to act in justice.
Shall you take this threat seriously? How do you act to minimize the impact on your business reputation? How do you manage this crisis?
Current Consulting Group (CCG) is a consulting group dealing with similar situations on a regular basis. Björn Wahlström* their managing director tells us that there is no one solution to cover all situations. However, he is sharing 5 quick tips to save your business reputation.
1 – Take a holistic perspective
Take a holistic perspective of the situation, and – crucially – make sure you understand the nature of the problem. An angry client might do damage to your brand through the media / social media posting but could potentially also show up at your facility to escalate the situation. Are you sure you know where the anger stems from? Are there any hidden reasons? It’s very easy to make mistaken assumptions about the nature of the threat, and while the reputational aspects need to be included from the start, so does the physical safety of your team / your facilities. Internal interviews with staff on your side is a good starting point.
2 – Pick the right setting
Pick the right setting and the right team to discuss the issue. Whereas legal council should be consulted at the outset of your response, you might risk escalating the situation if lead council also takes on the responsibility to negotiate with the angry party. If the conflict is with a more junior staff, perhaps the right person to reach out is a more senior person with no previous direct involvement in the situation. A third party could also be engaged.
3 – Consider the format and style of discussion
Consider the format and style of discussion. Don’t get drawn into a pitched exchange on social media without first having a plan in your pocket. Don’t give emotional responses just because the other party is emotional.
4 – Consider how to communicate the issue
Consider how to communicate the issue externally and internally. Other clients and your own staff need to be provided clear information about your position on the matter, and your preferred means of resolution in a timely way. That doesn’t mean keeping your whole company in the loop as things develop but pick strategic moments and means of communication. If you aren’t informing your staff, they will be getting the story from someone else instead.
5 – Plan ahead
Plan ahead. Make contingency plans and arrangement before things go south. Do a review of security / response strategies / resources needed.
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*Björn Wahlström (email@example.com) is the Managing director of Current Consulting Group, a Supply Chain and Risk firm with a specific focus on operational quality and risk mitigation in China. CCG are headquartered in Hong Kong, with operational offices in Shanghai and Shenzhen.