Home Library Translate
A A A
Share »
Follow us on Facebook Follow us on Twitter Follow us on LinkedIn
Connect »

Blog: Crisis Management

Menu

  • This Blog's Home
  • Guest Writer Submissions
  • Policies
  • To Subscribe to a Blog
  • About
  • Feedback

Proving Reputation is Your Most Valuable Asset

By Jonathan & Erik Bernstein on November 22, 2013

Protecting your reputation is a prime crisis management concern

We’ve said for years that reputation is an organization’s most valuable asset, an assertion backed up again and again by real-life experience. In his Managing Outcomes newsletter, our friend and colleague Tony Jaques recently shared two real-world examples which directly support this belief. Here’s a quote:

It’s hard to demonstrate beyond doubt that the investment you make to help improve reputation will be consistently rewarded.  But there can be no doubt at all that a major hit to reputation will surely damage shareholder value.

That truth was reinforced this month when two high-profile reputational crises took their impact straight to the bottom line.

The first was headline news across the country alleging bribery and corruption at the highest level at the international construction giant Leighton Holdings to gain contracts in Iraq, Malaysia, Indonesia and elsewhere.  The result was $700 million, or more than 10%, wiped off the share value in a single day.

While some analysts claimed it was “an overreaction to allegations first aired more than a year ago,” there were further losses the following day before the market stabilised.   As BRW columnist Leo D’Angelo  Fisher commented:  “As spectacular front-page headlines go, when it comes to media coverage of Australian business, this may prove to be the one to beat for 2013, and for some time thereafter.”

There were instant denials and angry letters from lawyers, and there is a long way to run before the truth will be established.  But within a week three senior executives resigned and Leighton’s reputation has been hard hit.

The same happened to California “green car” maker Tesla when one of their electric cars ran over debris on the road and a fire began in the battery-pack. Unfortunately, a passerby recorded the blaze and the video went viral, with investors slashing $US2.5 billion, or about 6%, off the company’s value.  Once again it was a media-driven reputational crisis, but the video rekindled concerns about the safety of lithium-ion batteries and that concern translated directly into a costly loss of confidence.

Public Affairs Council President Doug Pinkham recently wrote: “Reputation management is an inexact science because running a business is not a controlled experiment. The variables are always changing, and the markets often reward a company one day and punish it the next.”

Tony also shared a Weber Shandwick study, “Safeguarding Reputation,” that determined, worldwide, 63% of a company’s market value is directly tied to reputation, a fact perfectly backed by the two examples above.

Everything, from where you source material, to what you stock on store shelves, to what your employees post on social media, has the potential to impact your reputation. You wouldn’t leave the contents of your bank account unattended, so why would you neglect to prepare a crisis management plan that will help keep your reputation as strong as possible?

——————————-
For more resources, see the Free Management Library topic: Crisis Management
——————————-

[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

« Previous Next »

Search Our Site

Meet this Blog’s Co-Hosts

Jonathan L. Bernstein, founder and Chairman of Bernstein Crisis Management, Inc. has more than 25 years of experience in all aspects of crisis management – crisis response, vulnerability assessment, planning, training and simulations.[Read more ...]


Erik Bernstein is president of Bernstein Crisis Management. Erik started with BCM in 2009 as a writer and subsequently became social media manager for the consultancy itself as well as for a number of BCM clients before moving to the president position. [Read more ...]

Recent Blog Posts

  • Are You Prepared For 2021? New Crisis Management Survey Out Now
  • Crisis Preparedness and Response Is About To Get Tougher
  • How to Create a Crisis Management Plan to Respond to a Cyber Breach
  • Audi’s ‘Insensitive Ad’, or Why you always ask how else an image could be interpreted.
  • The Road To Crisis Recovery
  • Preparing DURING The Pandemic
  • Coronavirus: What You CAN Control
  • Southwest’s COVID-19 Crisis Communications And What You Need To Be Doing
  • Crisis Manager On The Spot…Quick Coronavirus Crisis Communications Tips
  • A Hallmark Apology

Categories of Posts

  • Avoid the Apology
  • college crises
  • communications
  • conflict resolution
  • Crisis Assessment
  • Crisis Avoidance
  • crisis communications
  • crisis management
  • Crisis Management Quotables
  • crisis planning
  • crisis preparedness
  • Crisis Prevention
  • crisis public relations
  • Crisis Response
  • crisis training
  • customer service
  • cyber attacks
  • cyber bullying
  • cybersecurity
  • data breach
  • Dealing With Media
  • Digital Media Law Project
  • disaster crisis management
  • disaster prevention
  • Disaster Response
  • disease crisis management
  • emergency management
  • Erik Bernstein
  • ethics
  • Facebook
  • food industry crisis management
  • hackers
  • hacking
  • Higher Education
  • hospitality
  • HR
  • information security
  • Internal Communications
  • internet crisis management
  • internet security
  • Jonathan Bernstein
  • Journalistic ethics
  • Law
  • Litigation PR
  • litigation-related crisis management
  • Media Relations
  • media training
  • online crisis management
  • Online Reputation Management
  • political crisis management
  • PR
  • preventable crises
  • privacy breach
  • privacy violation
  • Public Relations
  • recall crisis management
  • Reputation Management
  • Risk Management
  • SEO
  • social media
  • social media crisis management
  • social media policy
  • social media reputation management
  • sports crisis management
  • violence prevention
  • vulnerability audit
  • Weiner Awards
  • workplace violence

Blogroll

  • Bernstein Crisis Management Blog
  • Jonathan Bernstein's HuffPost Blog
  • The Crisis Show

Related Library Topics

  • Assessments
  • Business Insurance
  • Computer Security
  • Coordinating Activities
  • Crisis Management
  • Employment Laws
  • Ethical Analysis
  • Lawyers (Using)
  • Managing Change
  • Marketing
  • Media Relations
  • Organizational Communications
  • Planning
  • Public Relations
  • Risk Management
  • Safety in Workplace
  • Bernstein Crisis Management Blog

Library's Blogs

  • Boards of Directors
  • Building a Business
  • Business Communications
  • Business Ethics, Culture and Performance
  • Business Planning
  • Career Management
  • Coaching and Action Learning
  • Consulting and Organizational Development
  • Crisis Management
  • Customer Service
  • Facilitation
  • Free Management Library Blogs
  • Fundraising for Nonprofits
  • Human Resources
  • Leadership
  • Marketing and Social Media
  • Nonprofit Capacity Building
  • Project Management
  • Quality Management
  • Social Enterprise
  • Spirituality
  • Strategic Planning
  • Supervision
  • Team Building and Performance
  • Training and Development
About Feedback Legal Privacy Policy Contact Us
Free Management Library, © Copyright Authenticity Consulting, LLC ®; All rights reserved.
  • Graphics by Wylde Hare LLC
  • Website maintained by Caitlin Cahill

By continuing to use this site, you agree to our Privacy Policy.X