Managing reputational risk during a crisis

Managing reputational risk during a crisis

In a crisis, communication can make or break an organisation’s reputation.  Crisis managers need a well-planned communications strategy to ensure informed decisions and positive outcomes.

Historically, crisis communication was seen as merely a tool for damage control during crises.  Contemporary crisis communication is a multifaceted process that uses various communication mediums to tackle different activities.

A strategy should include a core message that can be adapted to any situation while maintaining the organisation as the primary source of credible information.  The message must be sensitive to different stakeholder groups; therefore, preparing a stakeholder mapping matrix to enable efficient and timely engagement with affected stakeholders is essential.

Managing reputational risk is crucial to the crisis communications strategy, as an organisation’s reputation is built through stakeholder experiences.  Organisations can effectively navigate crises and maintain their reputation by implementing a comprehensive crisis communications strategy.

The key is identifying variables such as the message, medium and audience.  Employing different forms of communication, including verbal and non-verbal expressions, interpersonal, group and mass communication, and engaging with various stakeholders need to be planned.  The crisis communication plan should be aligned with and promote the organisation’s core values and give consideration to moral ethics.  An ethical approach and not biasing toward economic advantages at the expense of organisation stakeholders will hold greater weight in the eyes of the stakeholders.  Importantly provides an opportunity to enhance the organisation’s reputation by building trust amongst affected stakeholders.

Case study example of failing to communicate.

The Boeing 737 Max crisis began in 2018 when two 737 Max planes crashed within five months, killing 346 people.  Investigations revealed that the crashes were caused by a software system called MCAS, designed to prevent the plane from stalling mid-air.  The faulty system would force the plane’s nose down even when unnecessary, leading to crashes.

Boeing’s handling of the crisis came under intense scrutiny.  Critics accused the company of prioritising profits over safety and failing to address the issue adequately.  The company faced backlash for not grounding the planes immediately after the first crash and for not being transparent about the problems with the MCAS system.  Concerns were also raised about the company’s relationship with regulators and its influence over the certification process.

Boeing’s initial response to the crisis needed to be faster and more adequate, contributing to a loss of trust and reputation damage.  The company eventually took steps to address the issue, including implementing changes to the MCAS system and working with regulators to address safety concerns.  This crisis had already caused significate damage to Boeing’s reputation and financial standing.

This case highlights the importance of a crisis communication strategy prioritising ethical and moral behaviours.  Being transparent and accountable could have helped to mitigate the damage caused by the crisis and maintain the trust of stakeholders.

This interview with Boeing’s new CEO Dave Calhoun demonstrates that being open and transparent, acknowledging past failures, and not finding excuses instils a renewed trust with stakeholders (customers and the travelling public).  The Boeing board clearly recognised its initial failings toward communicating transparently, presenting its new CEO to face the media with honesty.  

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