Reputation as Currency

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    Stakeholder trust can ease the impact of crises

    We all know by now that prior reputation has a major impact on the reaction of the public to crises. It’s been proven that, given a similar crisis, popular and trusted organizations take less of an initial fall than their counterparts. Why is it like that, though? Steven Behm, associate U.S. director of crisis and issues management at Edelman, explains in this quote from a Media Bistro article:

    Reputations are a perception-based measure of the general public’s belief in an entity’s commitment to do the right thing. In a crisis, reputation is the currency by which organizations either borrow or default on in order to afford an ongoing license to operate. In most cases, the public expectation of companies today is that the issue will be addressed head-on and that measures will be taken to ensure the crisis never happens again. That said, the opportunity gap to invest into a reputational bank of goodwill becomes exponentially more costly during and after a crisis if there isn’t a foundation of trust at the start.

    There is no way to buy this “reputational bank of goodwill.” It takes effort, and the best way is to build a rapport with your customers through hard work, solid service and honest communication.

    For more resources, see the Free Management Library topic: Crisis Management

    [Jonathan Bernstein is president of Bernstein Crisis Management, Inc. , an international crisis management consultancy, and author of Keeping the Wolves at Bay – Media Training.]