Communication Challenges When CEOs Cause Damage To The Company
- Brainz Magazine
- Mar 7, 2022
- 3 min read
Written by: Brigitte Kaps, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Communication challenges when CEOs cause damage to a company’s reputation and how to tackle them
Among the many quotes attributed to American business tycoon Warren Buffet, the one about reputation rings true. When Buffet said “it takes 20 years to build a reputation and five minutes to ruin it”, he didn’t specifically refer to CEOs, but he could very well have. Since CEOs are the face and voice of their company, their actions reflect on the brand and corporate image and can have a widespread and far-reaching effect. Reputational damage through scandals, financial or otherwise, not only harms the trust that investors and clients place in the company, it affects everything else, such as sales, recruitment and even stock price.
Most often, companies react by changing their leadership, but this has its own pitfalls, as it can create an atmosphere of confusion for employees and stakeholders who need to be reassured during turbulent times. It’s imperative that companies have trusted advisors who can counsel them and help them look at the big picture. But how can PR pros tackle these challenges and bring the situation under control?
1. Planning a media strategy – When there is backlash in the media due to the actions of the CEO or any other corporate leader, it then becomes crucial to try to control the narrative as much as possible. For this, the right spokesperson is needed: someone who can leverage the media and speak in an assured and confident manner. Acknowledging the mistake and apologising for it speaks volumes, especially in an era where CEO activism is considered the norm. But on the other hand, there are times when it’s also advisable to pull back from public view if the situation is out of control. Deciding which is the best course of action is something the PR advisor can do, because moulding public opinion at the right time is important.
2. Using social media – During times of crisis, social media can become a bane because events can snowball and go out of control in minutes. But it can also be used as a feedback tool, even though this would mean engaging in a conversation with the public. Social media can be used not only to measure the perception of the company but also to share honest and compelling examples of how the company is setting things right. CEOs are under constant scrutiny on social media, and it, therefore, becomes even more crucial that they handle online engagement appropriately and keep their emotions under control.
3. Learning from sentiment analysis – Many companies use sentiment analysis to understand their target customers better, monitor social media and have a clearer picture of public opinion. But in times of crisis, sentiment analysis can also be used to understand consumer attitudes and get insights into their emotions, so companies can react to it in real-time and gain a better understanding of the public’s thought process. In fact, sentiment analysis can also be helpful in preventing a potential crisis gain momentum and blow out of control.
4. Actions speak loudest – Trust in a company is inextricably tied to the CEO, and sometimes, it’s just not enough to communicate. They need to take actual redressal actions. By correcting their behaviour and fixing their mistakes, the company sends out the message that they listen to what stakeholders and consumers want, and this stands to reinforce their trust in the company.
It’s impractical to assume that there will never be any crisis in a company – because no one is infallible. Hence, it’s important to integrate reputational risk into business planning and strategy. Factoring risk into the strategy can keep you prepared, but of course, no amount of planning can actually replace the work it takes to re-establish trust. Accepting responsibility, learning from mistakes and taking action to revise policies can go a long way in improving perception about the company.
Brigitte Kaps, Executive Contributor Brainz Magazine
Brigitte Kaps is the founder and CEO of Executive PR.ch & Rent a PR.ch. She holds a Master of Advanced Studies in Business Communications and a degree in communications science She has almost 20 years of international experience in management positions with leading foreign banks (ABN Amro, GE, RBS). Before becoming self-employed in 2015, she was responsible for corporate communications at Cembra Money Bank (formerly GE Money Bank) in her capacity as a member of the Executive Board.
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