Restoring reputations

Reputation management expert Mike Regester shares his thoughts on handling a crisis well with Peter Cheney.

Honesty, transparency and a willingness to communicate very quickly are, in Mike Regester’s view, the best qualities to have in a crisis.  With 33 years’ experience in crisis management, Regester is Founding Director of Regester Larkin, a London-based consultancy with offices in the Persian Gulf and the US.

Lightning, in his words, does strike twice so companies must ensure that they learn from their mistakes but also appreciate that handling emergencies well can restore or even improve their reputation.

“It seems that very often companies don’t learn from each other,” he comments.  “The mistakes are forgotten and that’s partly because people retire [and] move jobs, and with them goes the corporate memory: how a particular situation was handled, both good and bad.”

A post-crisis review must always take place, looking at every aspect of how it was handled.  That should be fully documented and available on the staff intranet.  “In that way, lessons are not forgotten,” he remarks.

Good organisation also counts: “A ‘headless chicken’ syndrome quickly develops [in a crisis] so you’ve got to have roles and responsibilities quickly assigned.”  Everyone can only understand what they need to do if they are properly trained in advance, including through crisis exercise simulations.

“The main pitfall is to be not willing to communicate, the attitude that ‘this is our problem, it’s not anybody else’s business’ and hope that it will go away, because it never does and it just makes it worse.”

Regester is keen to emphasise that a company’s reputation can be “enhanced if you have faced a crisis and you are seen to have dealt with it well.”  His key advice is “to be seen to be doing everything possible, irrespective of cost, to remedy the situation” and to “tell it all, tell it fast [and] tell it truthfully.”

As a public affairs manager with Gulf Oil, his first experience of crisis management was the explosion on the oil tanker Betelgeuse in Bantry Bay in 1979.

Empathy, in his view, enhances reputation.  Speaking at a seminar on crisis communications, he remarked that an organisation at the centre of a crisis must show a “human face” and put across how it feels about what has happened, especially if it involves people or the environment.

People observing a crisis will naturally react with shock when it occurs but if a company is seen to do everything possible and expresses empathy, that shock “doesn’t escalate but quickly goes away”.  After all, “none of us believe that we live in a risk-free society.”

Without that, however, shock can escalate into anger, which “always translates down to the financial bottom line or the licence to operate”.  Boycotts, share price collapses, and “knee-jerk” regulation can all damage a company’s value and indeed affect a whole industry.

Regester also outlined case studies of success and failure when dealing with crises.

When the Herald of the Free Enterprise ferry sank at Zeebrugge in 1987, the company Chairman initially speculated that the ship had hit the harbour wall when leaving the port.  However, the investigation found that the bow doors had been left open after departure, for a quick turn-around time.  The brand (Townsend Thoresen) had been well-respected but new owners P&O subsequently painted over that name on all vessels.

In contrast, Regester highlighted a bus crash in South Africa in 1999, involving Thomas Cook tourists.  Interviewed on TV afterwards, the company Director assured viewers that it was working with the Foreign Office to contact relatives, and sending two staff teams to South Africa: one to look after survivors in hospital, and another to investigate the mechanical causes.  He expressed total confidence in the bus company, with whom it had worked for 10 years.

When Shell exaggerated the size of its reserves in 2004, the company Chairman resigned and several other senior executives were dismissed.  Heads did roll (showing accountability) but more importantly, the company re-organised itself from top to bottom, to prevent a similar fraud: a good example of how a corporate reputation can be restored.