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Why a well-handled crisis can be good for your reputation

December 6, 2010 Jonathan Hemus

The idea that a reputation can be enhanced as a result of a crisis seems counter-intuitive.  But Marketing Week suggests that Qantas has done just that as a result of its approach to crisis communication activity in response to an engine failure on one of its aircraft.

I agree, and here’s why.  A crisis provides an impromptu audit of management competence.  And it does so in the form of an enormous challenge conducted under relentless pressure and intense media scrutiny.  It’s the time when carefully constructed reputations face the acid test and we find out whether the organisation has a world class management team, or merely employs talented spin doctors.

If the company passes the test, confidence in management is not just reinforced, it is raised.  Fail, and a reduction in trust and credibility is sure to follow.  Either way, reputational and financial value is likely to reflect the stakeholder view of the company’s performance in the crisis.  By taking decisive action and communicating pro-actively and frequently, Qantas and its CEO Allan Joyce has almost certainly passed the reputation management test.

But there’s another factor at play which is likely to protect and maybe even enhance Qantas’s reputation: it managed and communicated about the crisis in a way which was consistent with the brand.  More than any other airline, Qantas has safety at the heart of its brand.  By immediately grounding its fleet of A380s and refusing to take to the air until it was convinced that it was safe to do so it acted in accordance with its brand values.  As the company’s crisis spokesperson, Allan Joyce repeated the message of passenger safety in every media briefing and provided demonstrable evidence that this was more than a soundbite.  As a consequence stakeholders recognise that the Qantas value of safety is deeply engrained in the organisation and its reputation will be strengthened as a result.

Conversely, organisations which suffer a crisis which seems to contradict their corporate values or who manage the incident in a way counter to stakeholder expectations are likely to suffer maximum reputational harm.  This is why Toyota’s safety recall earlier this year was so damaging for a brand built on quality and reliability.

No business would relish a situation requiring it to implement its crisis communication plan.  But Qantas is a good example of how doing the right thing in the most testing circumstances can act as a powerful endorsement of a corporate reputation.

Jonathan Hemus

  • Jonathan Hemus, Insignia Communications
  • Follow Jonathan on Twitter @jhemusinsignia

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