Who says a hit to your corporate reputation doesn’t cost money?
Sony, in the wake of the hacking attack on its Playstation Network and potential exposure of customer credit card and personal details, has seen its share price drop and new insurance cover instigated for 100m users, covering each for up to $1m against cyber attacks.
Its worldwide gaming service remains closed as of today and could be back on line only by the end of the month. And, at that point, how much trust will be restored among customers to return? As Dan Goodin, writing in the Register says in response to Sony’s customer advice to change passwords” : “Of course, that suggestion assumes users continue to trust Sony to safeguard their information and stand behind assurances that the PlayStation Network is secure.”
Since the crisis first arose last month, Sony has been in the firing line for its speed of response – both in alerting customers to the possible data breach and the apology from CEO, Sir Howard Stringer, which came two weeks after the event.
Clearly, having systems that are sufficiently robust to protect against hackers is at the root of protecting corporate reputation.
But how an organisation communicates at a time of crisis is an essential part of the process of reassuring and retaining its customers’ trust and loyalty once the crisis is over.
At a recent Management Today round table discussion – entitled Managing reputations after the age of spin – communications professionals and business leaders shared their wisdom on the power and value of PR in the face of reputation meltdown:
Simon Baugh, Airport communication director, Heathrow: “The age of spin is dead really…you have no choice but to be authentic and transparent.”
Andrew Gowers, former head of media relations, BP and former co-head of corporate communications, Lehman Brothers: “Take…Lehman Brothers. [the management] didn’t reveal to anybody what they were really thinking. Communications were blank which led to a hailstorm of rumours. There was no communication strategy because there was no survival strategy for the firm. Therefore, the end was very swift.”
Nick Smith, global managing director – marketing transformation, Accenture: “Reputational management should be aimed at all audiences…your role isn’t just about managing damage limitation, it’s about pro-actively building trust in that enterprise.”
MT editor, Matthew Gwyther, in his leader article notes that “Most bosses with any sense how realise that corporate reputation is a priceless thing” and even acknowledges that times have changed from when PR was “the bastard child of propaganda”.
However, putting things in perspective, it’s not the communications director or media relations manager alone that dictates the rise or fall of a company’s reputation: as Simon Baugh says, “The reputation of a company is going to be based on a hell of a lot more that what that individual does.”