There are few things in life so hard won and yet so easily lost as a good reputation. Let's look at how reputations grow; how they can be sustained and protected; and why you should care. As Mr Darcy says in Pride and Prejudice “My good opinion once lost, is lost forever.”

When Jane Austen created the character of Mr Darcy she predicted a societal change from shallow politeness to one of integrity and deeper connection - from insincere acquaintance to those who demand and give more. As a result, Darcy is seen as a loyal friend by his family and close friends, but outside is seen as prideful and rude. His reputation depends on perspective but is at its highest the closer one gets to his true friendship circle where his loyalty is absolute. It’s an indication that reputation is not a static or consistent across a breadth of relationships.

So, what is reputation? 

Its root is from Latinate reputare, "to think over or reckon up" and in our context it refers to the way that a brand (individual or organizational) is assessed or “weighed” by the public at large. 

Reputation identifies specific qualities or character traits, with a good reputation leaning on admirable elements and a bad reputation on reprehensible ones. Both good and bad character can be turned to positives depending on the circumstances. The hero journey of groups of previously bad characters acting for the public good was captured in Kurosawa’s Seven Samurai and has been replayed countless times since. Even Darcy realizes how his influence can be used for broader good and not his own, in turn winning the hand of Elizabeth Bennet. It was a risk that yielded a profound reward.

The fickle nature of reputation

As Darcy quipped, the fickle nature of reputation has to be weighed carefully when it is potentially at risk. Two core strategies for businesses revolve around their proactive promotion of positive brand associations such as quality, integrity, design, and leadership while also guarding against the kind of crisis that creates a bad association with the public, either through media attention or through the actions of individuals or the organization as a whole that imputes that the brand is untrustworthy or reckless.

Reputation, of course, applies broadly to personal, product and corporate brands. And although the primary source of a good reputation is great personal experience, once established it buys credit with others in all sorts of situations. A well-founded reputation can act as a shield in certain circumstances, providing resilience in the ability to lean on past reputation to weather a short-term crisis.

What is reputational risk?

Reputational risk is a hidden threat or danger to the good name or standing of a business or entity and can occur through a variety of ways:

• Directly, as the result of specific actions by the company

• Indirectly, due to the actions of an employee or group of employees

• Tangentially, through connected parties, such as joint venture partners or suppliers

The challenge of reputation risk is that, especially in an era of fast-moving social media, the issue can arise suddenly, often with little or no warning, and gain momentum quickly with little verification. In the worst examples, these free-running and reputation damaging messages can threaten the survival of the best run enterprises.

Adidas committed a spectacular faux pas in 2017 when its public relations team posted a congratulatory message on Twitter to the runners of the Boston Marathon. The post read, “Congrats, you survived the Boston Marathon!”Seemingly innocuous, the company had a message that reminded everyone of the 2013 bombing of the Boston Marathon.

In the same year, the 2017 assault of a passenger on a United Airlines flight is another example where facts are blurred but actions profound. Even reputation management companies continue to misrepresent the forced removal of Dr David Dao as being performed by United Airlines personnel rather than local law enforcement. Yet at the time Oscar Munoz, CEO of United, did the right thing in assuming full legal responsibility for Dao’s experience. Although Munoz’s initial speed of response was criticized, the decision to settle directly with Dao and to not deflect liability helped mitigate the airline’s reputation.

In contrast, 2016 US bank Wells Fargo was embroiled in a scandal involving the opening of millions of unauthorized accounts by the retail bank division that was chasing new account opening goals that exposed them to significant reputation risk. Attempts to deflect and deny resulted in the CEO, John Stumpf, and other senior managers leaving the business. Regulators imposed significant fines and penalties, and many large customers ceased their relationship with the bank.

How do we acquire and sustain a good reputation and what do we do when a crisis hits?

Social media has created an era of universal authorship, where belief and opinion confers the right to insert views into brand stories regardless of accepted truth or evidence. This dynamic dialog presents real risk for brands who do not understand the landscape or their new responsibilities. Brands can no longer simply insert themselves into consumers lives but need to demonstrate authenticity and relevance through their messaging and content if they are to grow a relationship beyond the last transaction. 

And therein surfaces a risk; if a brand operates outside of those expressed brand values, then it better have a well-articulated reason that is supported beyond a short marketing campaign. The reputational risk is significant and people tend to remember the messages you would prefer they didn’t. 

Criticism is always hard to take and wavefronts of social media outrage can emerge from groundless stories. Finding the real problem can be tough, especially if it starts with an unconnected party. A pile-in to tea brand Yorkshire Tea happened because the then UK Chancellor of the Exchequer, Rishi Sunak, pictured himself using their product in a social media post that looked like a product placement. The social media champion at Yorkshire Tea tried to defend the brand but any defensive action was only going to fan the flames. A simpler message could have taken the heat from the situation long enough for the issue to descend into humor.

Rishi Sunak with Yorkshire Tea. The Guardian UK 2020

What separates good brands from great when a crisis hits? 

Many will tell you that speed of response is everything when a crisis hits and for the most part we agree, but it is what you say and do that is critical to what follows. For major crises, claiming liability too soon before all the facts are known will lose you insurers, employees and court cases. Outrage and denial will kill you. However, there is an empathetic middle ground that can buy you limited time whilst the early facts are tested with subsequent data, and where responses can be carefully crafted for all affected. 

Do this well and you’re on the front foot, do it badly and you’re in defensive reaction mode, fighting for credibility. Obfuscation is often wrongly applied such as using SEO to post positive stories to ensure that negative ones are relegated off the search engine first page. That strategy can backfire, especially as few social media followers rely on broad search to explore stories. Hiding, even in plain sight won’t bring back your reputation and the nature of the internet will ensure that the other stories are always available for those who want to find them. A strategic plan to manage risk and crises is by far a better approach than burying bad news. By far.