Wednesday, November 17, 2010

WikiLeaks and Reputational Credits

In his blog posting titled "Can Singapore weather a WikiLeaks scenario?", David Boey talked about the value of building what I would call "reputational credits" with one's stakeholders before a crisis occurs.  Such "credits" would then provide the organisation with the operating space to effectively manage a developing crisis.

A good case in point is the recent mid-air engine explosion of a Qantas A380 (QF32) that forced an emergency landing at Singapore's Changi International Airport.  From the beginning of the crisis, the probable cause of the explosion was linked to either a design or manufacturing failure of the Rolls-Royce Trent 900 engine.  A part from a brief statement from Rolls-Royce, on the day of the incident, stating that they were working with Qantas to investigate the accident, Rolls-Royce remained silent on the matter until it released its findings four days later.

Even then, when a component in the engine was identified as the root cause, Rolls-Royce merely issued a statement to the effect that they were working with all affected parties to change the component in question.  From all assessments, Rolls-Royce's reputation has remained largely unaffected by this incident.

How is this possible?

One explanation is the strength of Rolls-Royce brand image.  As the manufacturer of luxury cars known for their outstanding engineering, quality and reliability, this perception in the minds of stakeholders has provided Rolls-Royce with the operational space to conduct their investigation, and sufficient reputational credits to acknowledge an error, correct it and move on.

What is important for PR Professionals to note is that these reputational credits were not built overnight and likely took the company many years of consistent branding and Messaging (when dealing with other crisis).  As mentioned in an earlier posting of mine, Crisis Communication Managers must adopt the long-term view and companies must be 100% truthful in all its dealings with their stakeholders.  Short-term "pain" should be endured with the goal of building reputational credits as opposed to taking the easier route of being less than truthful.  As can be seen in Rolls-Royce's recent handling of this crisis, the importance of reputational credits cannot be understated.  So build them while you have the time.

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