2007'02.11.Sun
Actions Speak Louder than Words: CEO Apologies Losing Potency in Times of Crisis and Reputation Recovery

October 26, 2006

Nearly 40% Choose to Avoid Responding to Bloggers
Only 20% Recommend Keeping CEO Invisible Post-Crisis
Only 20% Recommend Keeping CEO Invisible Post-Crisis
NEW YORK, Oct. 26 /Xinhua-PRNewswire/ -- Global business executives view public CEO apologies less effective than other strategies to repair tarnished company reputations (59 percent), according to a new 11-country survey by global public relations firm Weber Shandwick and KRC Research. "CEO apologies are quickly losing their power to allay public concern now that they are almost expected when a crisis strikes or companies are accused of wrongdoing," said Weber Shandwick's Chief Reputation Strategist Dr. Leslie Gaines-Ross, architect of the new research. "Taking responsibility by apologizing is important, but more is expected from CEOs in crisis such as greater public outreach on what the company intends to do about the problem on an immediate and regular basis." According to nearly three-quarters of the 950 global business leaders participating in the "Safeguarding Reputation(TM)" survey, the best steps to beginning the reputation recovery process are announcing specific actions the company will take to fix the problem (76 percent), creating an early warning system (76 percent), and establishing procedures and policies the company will follow to demonstrate its commitment to being a responsible citizen (73 percent). Other frequently mentioned strategies for repairing post-crisis reputation are working closely with legal counsel on public disclosures (72 percent), issuing regular public progress reports to address the problem (71 percent) and quickly and publicly disclosing what happened (71 percent). Many of these action steps help stem hyper-media coverage as stakeholders are assured that the company is being as transparent and proactive as possible under the circumstances. To Respond or Not to Respond to Bloggers The majority of global business executives agree that responding to bloggers post-crisis is not an effective way to begin the recovery process, regardless of region. Less than four in 10 (39 percent) believe that engaging with bloggers who may have the facts wrong is a good idea in rebuilding lost reputation. "Perhaps business decision-makers around the globe believe that companies should concentrate on fixing the problem and understanding what went wrong before turning their attention to correcting online conversations," said Dr. Gaines-Ross. "This is not surprising since our research also reveals that only a minority of companies pay attention to online coverage of their company's reputation." Steps to Help Companies Recover Reputation after Crisis Strikes % Always/Usually North Asia- Total America Europe Pacific Announce specific actions company will take to fix the problem 76% 83% 73% 78% Establish early warning system 76 83 69 82 Establish specific policies and goals demonstrating corporate responsibility 73 75 69 74 Make sure legal team approves all statements 72 74 68 76 Issue regular public progress reports addressing the problem 71 78 69 70 Disclose quickly and publicly what happened 71 73 72 70 Determine if problem is industry-wide or limited to the company before acting 67 60 68 62 Provide public apology from CEO or Chairman 59 57 57 64 Achieve quarterly earnings goals 57 50 59 47 Create senior position with specific responsibility for managing company reputation 47 45 50 42 Avoid any public communications until all facts are in 45 46 39 46 Respond to bloggers who have facts wrong 39 31 40 41 Restructure or eliminate board members 26 14 27 21 Keep the CEO out of the media 20 16 21 17 Source: Weber Shandwick Safeguarding Reputation(TM) conducted with KRC Research, 2006 Keeping CEO Invisible after Crisis Strikes Not Advisable Only one out of every five global business executives (20 percent) believe that keeping the CEO out of the media after a crisis helps restore reputation. "CEOs are the public face of their organization and in times of turmoil are expected to be visible and forthright about any problems that arise on their watch," said Dr. Gaines-Ross. "In addition to straightforward CEO communications, companies can begin restoring equity in their company name by publicly stating problem-solving actions, making crisis preparedness a priority and setting clear responsibility standards." New Rules of Engagement "Leaders need to better understand the rules of engagement as they increasingly find themselves in the spotlight for wrongdoing or mounting crises. Considering that nearly nine out of 10 global business executives see an increasing trend in damage to corporate reputations, it is wise to identify the best recovery strategies now," said Weber Shandwick President Andy Polansky. "Interestingly, the survey reveals that despite vastly different business practices, cultures and work styles, leaders share a global perspective on reputation recovery following a crisis," said Polansky. "Our groundbreaking research offers insights into how companies can safeguard and repair their reputations, identify the early warning signs of reputation failure, and take the right steps to reputation recovery." Safeguarding Reputation(TM) Safeguarding Reputation was conducted by Weber Shandwick in partnership with KRC Research among 950 global business executives in 11 countries spanning North America, Europe and Asia-Pacific. Brazil was the only Latin American country participating in the survey. All interviews were conducted by telephone between July 20 and August 8, 2006. The sampling error for the total sample is +/- 3.2 percentage points. About Weber Shandwick Weber Shandwick is one of the world's leading global public relations firms with offices in major media, business and government capitals around the world. The firm specializes in strategic marketing communications, media relations programs, public affairs and issues management, reputation management, and provides corporate communications counseling. Weber Shandwick also provides specialized integrated services including Web relations, advocacy advertising, market research and visual communications. Find out more at http://www.webershandwick.com . Weber Shandwick is a unit of The Interpublic Group of Companies (NYSE: IPG), which is among the world's largest advertising and marketing services organizations. About KRC Research KRC Research is a full service market and attitudinal research firm. Research partner to Weber Shandwick and other Interpublic Group agencies, KRC specializes in strategic communications research, including research to support product communications, corporate communications, public affairs, and social marketing. KRC provides a full range of primary research services, including surveys, focus groups, and executive interviewing. Find out more at http://www.krcresearch.com . For more information, please contact: Laura Bachrach Weber Shandwick Tel: +1-212-445-8467 Email: lbachrach@webershandwick.com SOURCE Weber Shandwick
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