Reputation Management from the Inside Out

In the insurance industry today, reputation crises are a fact of life. Corporations don’t need to worry about what to do if a crisis occurs; they need to be prepared for when it occurs. A critical facet of that preparation is Internal Communications, because one of the most important, and most overlooked, constituencies in a crisis situation is the corporation’s own employees.

When a corporation’s reputation is under attack, so are its employees. They’re constantly fielding phone calls from their colleagues, their clients and their mother. Everyone wants to know “What’s going on?” Employees become scared and angry, and if the situation doesn’t turn around, they turn off.

For example, when JPMorgan Chase was dealing with the Enron situation, research told them the population at large was more concerned about the Olympic Skating scandals than they were about JPMorgan Chase and Enron, and corporations who worked with their Investment Bank were actually proud of the company for sticking by clients in a difficult time. But employees were in a state of crisis.

This deeply unnerved employee population can severely undermine the corporation’s reputation management efforts. We may like to think of our companies as “tight ships,” but in reality, they leak like a sieve. What kind of messages do you think these demoralized employees are going to be passing on to colleagues, clients, their mother, and the press? How much business do you think is being done by these shell shocked employees?

The situation can be prevented. No, you don’t have control over what an audience thinks or feels, even if they are your own employees. But Internal Communications is the only arena where you do have control over the message. Internal Communications is a powerful tool in the reputation management arsenal because it provides the only forum where you can tell your story your way.

These strategic principles are designed to help protect large, mid-size or small companies in difficult environments.

Employees need to be armed
To reassure themselves and others, employees need information. They need facts, not spin, to help them and their own constituencies understand the situation and, as appropriate, respond to it.

To properly arm employees, the corporation needs to make the case with facts, not promises. It’s important to be reassuring, while also being realistic. Employees need to hear “It’s not the end of the world–here are the numbers. It hurts, but we’ll be fine.”

Be both reactive and proactive. Make sure there are no surprises. Every time an employee has to say “I don’t know” to a client or a colleague, they feel more embarrassed, worried and angry. Alert the employee population when you know that negative articles are about to break and give them the information to respond. Once they are better armed, everyone quiets down and has an easier time getting on with business.

Do whatever it takes to get the message out
Like many of us, employees don’t stop to read everything that crosses their desk and they’ve become inured to all the corporate messages they’re bombarded with. Even in a crisis situation when they’re hungry for information, it’s not easy to get through to employees.

To get the message out, the corporation needs to repeat the messages over and over through every channel available. At Wal-Mart, where the corporation needs to communicate with over 1 million associates in disparate locations, senior executives run video broadcasts to the stores to discuss reputation issues and lay out the responding talking points.

JPMorgan Chase used voice mails, primarily as a proactive channel to alert managers when negative articles were about to appear, and then followed up with e-mails to provide more detailed information and to drive employees to the corporate intranet Web site, CEO Source. This site was specifically designed to provide employees with real time information on current and unfolding issues. Articles about the firm, the industry and relevant situations were posted three times a day, with links that provided senior executives with details of the firm’s response.

In difficult situations, one of the most effective channels is always face-to-face communications. The CEO and other senior executives can conduct Town Halls to personally address employees on a business by business basis in all key geographies. Town Halls work very well to demonstrate senior management involvement and understanding of the issues, but I don’t believe that they are a good forum for real dialogue. This is a time for sharing information and creating cohesion, not for public airing of issues.

Manage communications with an understanding that information will cascade through the organization and out the door. Remember that there is no such thing as a secure site or a confidential memo, and make sure your employees understand this, too. Manage their expectations: legal constraints are in play. All information that goes out through any channel needs to be vetted.

While research is an important tool to help shape messages in crisis situations, this is not a good time to conduct formal research outside the company. Instead, create employee forums so that your people out in the field can bring back the information for you in a consistent structure.

Communicate constantly from different levels of the corporation. Each level of the organization has a different role to play in Internal Communications. The CEO defines the tone and the intent of the corporation, and employees will scrutinize everything he says and does during this situation. For example, Michael Cherkasky of Marsh is doing an excellent job right now of creating a new public face for Marsh and I would think that that is playing well with employees as well as regulators.

At the same time, though, employees need more informal communication from their direct supervisors. That’s where they can hear more specifics on how their business is being affected and they can ask the questions that are really on their mind.

Mobilize the organization
Reputation management is a job for all businesses and functions of the company. Everyone needs to be involved. In a crisis situation, the organization needs to be mobilized in order to identify current and upcoming issues and prepare responses.

This mobilization process requires senior management to listen to employees, even when it’s uncomfortable. I’ve had to bring back a lot of hard-to-hear information to executive committees of crisis situation companies: “They want to see a public execution. They feel betrayed. They think you’re lying.” The responses have varied, from “What can we do about it?” to “They just don’t get it.”

In difficult times, you don’t have to agree with employees’ attitudes and needs, but you do need to manage them. Understanding the fear and anger of employees is the first step in overcoming it.

Create a forum where people can speak their minds freely. When people get into difficult situations, they fall back on core behavior patterns. The same is true for corporations. Companies who have succeeded, in part, by creating an insular culture, like Wal-Mart or Aon, have a tendency to close down and “circle the wagons” during a crisis. But that only exacerbates the situation.

It’s important to not just allow but to encourage dissident points of view to be heard so that new solutions might be explored. Sometimes just reaching out or holding small informal meetings helps. Sometimes an outsider is needed to elicit unpopular opinions.

Take the heat
When there’s a reputation crisis and your company is in the public eye, it helps to be able to put a human face on the corporation. Not just to make public pronouncements, but to take the heat. By acting as a lightening rod, that person absorbs the anger and protects the company. And sometimes when the lightening strikes too hard, you need to get a new rod.

At JPMorgan Chase, Chairman Bill Harrison was able to represent the company and survive. In doing so he became the focus of much angst, anger and recrimination, especially from employees, but as the crisis situation abated, the calls for a “public execution” diminished and employees got back to business.

At Marsh, the lightening made a direct hit on Jeffrey Greenberg, and left Michael Cherkasky in a good position to lead the company into the future.

These principles don’t just apply to a crisis situation. They’re ongoing. In the industry today, corporate reputations are at risk everyday. Instead of waiting until the crisis hits, companies need to constantly monitor situations and be prepared.

Identify the risk areas, train employees about the realities of their environment, conduct ongoing research to assess vulnerabilities and create contingency plans. You can’t predict the next crisis, but you can prepare for it.

As you prepare, don’t make Internal Communications an afterthought. The workplace itself is a strategically important forum for ongoing reputation management, because it is where you can tell your story your way.

Karen Dubinsky/Marketing Insights Inc. is a consumer insights and brand advisory firm specializing in helping companies meet complex brand challenges such as crisis management, mergers and acquisitions, global expansion, and brand reinvigoration. Her clients have included: JPMorgan Chase, MetLife, MasterCard, Turner Entertainment, Seagrams, and the American Red Cross.