Coronavirus and its human and economic consequences are making the world difficult and dangerous for businesses and the reputations they have built and managed over years.

There are many models and trademarked tools for measuring a business’s reputation, but they are mostly presentational complexity built on two core pillars: competence and character. All businesses’ reputations will have aspects of both, but usually one is dominant. When businesses falter, either in terms of competence or character, the other can provide critical protection. We forgive lapses in performance if we believe the business to be a good company doing its best, and we usually forgive or ignore lapses in character or ethics if we cannot live without the product or service the company provides.

Facebook and Amazon’s reputation is largely built on competence – the capability and utility of their platforms and services. Customers and stakeholders may question the character of the organisation, business practices and their leadership. And yet, in most cases, this makes little impact on their rate of growth or our willingness to use their services.

The reverse is also visible with businesses that we believe to be of good character: they can be forgiven lapses in delivery. From Tesco’s hard-built recovery from horse meat to KFC’s failure to have any chicken. By emphasising and leveraging their established characters as they recovered from the competence failure, they helped protect their business.

The current crisis is more perilous. Today, businesses are simultaneously exposed to interrelated threats to both competence and character. Lockdowns, supply chain disruption, quarantines and changing consumer habits mean that many businesses are struggling to remain going concerns. At the same time, the actions that might protect the business – from asking for bailouts, redundancies and factory closures – are seen as evidence of the character of a business and its willingness to play its part in the social contract. This risk is magnified for any business that has received public money or benefit as part of the Coronavirus response.

Actions that in most circumstances would be primarily seen through the lens of competence today are immediately linked straight to character – and vice versa. Where, in the past, one could serve as a counterbalance to a problem with the other, today competence and character are so interlinked that they will be affected together.

This raises the stakes and level of reputational risk for all. Navigating these risks is difficult but there are some core starting points:

  • Think what any business action says about your character, not just operational or competence issues.
  • Internal communication is just as important as external. A company’s workforce is not just an audience, they are increasingly critical stakeholders in every sense of the word. Employee pressure on the character of their business is increasing and driving major strategic change in businesses as large as Amazon and Google. Respecting and bringing your people with you is increasingly important.
  • Words are not enough. This is not new, but, more than ever, warm words and small initiatives are not sufficient to drive reputation. All audiences, internal and external, demand action at material scale.

Today, joined-up thinking and, most importantly, communications and action are critical for business success. And, conversely, the reputational risk of siloed thinking, communication and action has never been higher.

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