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Action & accountability: The keys to reputational success in 2020 and beyond

Nicky McHugh  Strategic Communications Expert

· 6 minute read

Nicky McHugh  Strategic Communications Expert

· 6 minute read

Recent social upheaval has dramatically shifted the reputational landscape in 2020, requiring firms to rethink leadership and competitive market strategies

Recent social and political protests have dramatically shifted the reputation landscape in 2020, requiring firms to rethink leadership and competitive market strategies.

The combination of fallout from Covid-19 and social justice movements such as Black Lives Matter (BLM) and #MeToo are exerting new pressures for any company doing business today. For firms that want to ensure long-term relevance given the current context, it is worth understanding the implications of this moment.

Our data shows that 70% of communication leaders at global companies say that managing reputation is more critical now than in the past. Where, in demonstrating concern for their communities or vulnerable populations, businesses once may have carefully crafted statements of support, given targeted donations, or delivered sensitive marketing campaigns; today, there is increased demand for firms to speak up more forcefully on issues that matter. (Note: Data and sources referenced in this article are from The RepTrak Company’s custom fielding studies and Content and Community’s The Season of Discontent.)

These social justice movements are forcing a cultural tipping point that will have far-reaching consequences. Consider the impact of the appointment of Fabiana Pierre-Louis, who in September 2020 was unanimously confirmed to a seat on the New Jersey Supreme Court. News coverage of the announcement generated hundreds of thousands of social media shares during the first two weeks alone, with many stories seeing more than 10,000 social shares each. Widely hailed as impressively brilliant, Pierre-Louis makes history as the first Black woman on the New Jersey Supreme Court and the youngest justice to sit on the state’s highest court. Her confirmation represents a momentous culturally critical moment.

There are lessons here for firms that want to prove they are positively participating in these moments that matter — moments that break through the noise and will have long-standing reach. Data shows that globally, 57% of respondents believe that companies should have a voice or take a stand about political and social matters. Almost 60% of the United States public wants companies to offer opinions specifically about racial equity, social justice, and anti-discrimination.

Responding to demographics

There are some interesting demographic insights into what will resonate with different audiences in the United States. For example, most Black Americans expect companies to speak out and take specific actions in response to ongoing social justice matters, thus companies can flex leadership and transparency as vital levers here. Gen-Z and Millennials want community-based actions as a response to the BLM movement, whereas Gen-X and Baby Boomers prioritize workplace culture changes.

With such a variety of expectations, what is a forward-looking firm to do? First, of course, firms must balance reputation risk with return. One of the foremost concerns around taking a position on an issue is the risk of offending existing clients, partners, or employees who may have a different perspective. By their very nature, these cultural-political issues carry a degree of polarization. Another risk is in taking what could be interpreted as “the wrong” side of an issue. In both cases, reputation risk is very real. Firms will lose trust and support while experiencing public backlash that could quickly accelerate into widespread ridicule, condemnation, and even boycott for the offending company in today’s social media-driven environment.

What is less frequently discussed is the reputation return for proactively managing your reputation capital. When stakeholders were made aware of actions taken in response to the BLM social justice movement, we learned that company reputations generally increased considerably. In analyzing what worked best, there are clear guidelines that firms can follow to build their reputations during these turbulent times:

1. Dialogue combined with deeds — The Covid-19 pandemic has accelerated the expectation that companies have a responsibility to weigh in on political and social matters. Almost one-third (32%) of respondents said they believe that it is essential for corporations to take direct action, and more than 50% expect that companies will speak out and take immediate steps. For firms, this means it is crucial to continue to lead with dialogue and strong communications with your key audiences, and to follow those words with a specific action that reinforces what you are saying.

2. Commitment is critical — Lenovo is a global company with more than 50,000 employees and businesses in 180 markets. As such, the company chose to put environmentalism and sustainability at the fore of its business ethos. The company has reduced its greenhouse emissions by 92% over the past 10 years by focusing on its supply chain and exceeding environmental regulations. It also has committed to new emission reduction targets for 2030 and a net-zero emissions goal by 2050. This commitment to a cause is paying reputation dividends as almost one-quarter of the public we surveyed agrees that Lenovo is environmentally conscious. The company has also experienced increases in its reputation score as a result.

3. Authentic accountability — There are new expectations of leadership today, a philosophy partly fueled by stakeholder capitalism — the understanding that diverse and diffuse stakeholders, beyond just stockholders, matter as well. Clients, employees, policymakers, the general public, and also the Gen-Z and Millennial demographic hold those organizations with whom we work to new accountability measures. Firms can step up by demonstrating social awareness and candor on an issue that is important for them and their stakeholders. A good example is Mars, the parent company of many well-known consumer brands that, following widespread social justice demonstrations across America, recently made a public pledge. Their statement combined many of the principles we have discussed here: “As a global brand, we know we have a responsibility to take a stand in helping to put an end to racial bias and injustices. As we listen to the voices of consumers, especially in the Black community, and to the voices of our Associates worldwide, we recognize that now is the right time to evolve the Uncle Ben’s brand, including its visual brand identity, which we will do”.

Today we exist in a context where it is no longer good enough for firms to voice support for injustice or the underserved only. Words must be accompanied by actions.

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