Strong leadership skills are widely acknowledged as vital tools in providing companies with a competitive edge in today’s business environment. Quinton Douman, MD of 212 Business Consulting, explains that if you are a leader – be it of a franchised business, a global corporation, a family or a country – it’s always decision time.

The role of leadership, by definition, means that the weight of decisions falls onto your shoulders. Should your business purchase more stock despite a downturn in demand? Can you really afford to send your daughter on that school trip? Should you be making that particular amendment to this specific charter?

The art of decision-making doesn’t have to be a continuous cycle of “what ifs”; when it comes down to the core of any matter, there are three questions that need to be answered before you can identify the wisest course of action:

  • What should start?
  • What should continue?
  • What should stop?

The quality of your decisions as a leader is predicated by the quality of your diagnosis. The answers to these questions are what you need to put your time and effort into defining.

Let’s use a small sales team as an example. The leader notices that the performance of the sales team is down, so she immediately schedules a team-building event and hires a motivational speaker, and then spends money on good food and a great DJ.

The result

Everyone is happier than they were a day before, but the reality is that a lack of motivation wasn’t the true cause of the issue. Even though the short term morale will be significantly better, the problem of poor performance will probably not be solved.

While some people in the sales team may need motivation, team building could work for them, while others may lack resources, or the knowledge or skill to perform at an optimum level. Some may be falling foul of a flawed sales process that has been systematically breaking down productivity over many years.

From this example, we can see that, before making any decision, the first question should not be “what do we do?” but rather “what do we know?”.

In order to accurately define the problem and, therefore, the solutions, the leader must ask questions about the past, the present and the future. This may seem like an unnecessary effort, but without a good understanding of every lever, the quality of the decision will be compromised.

Think about something as simplistic as going through a menu at a restaurant; the people who are clear about what they value and what their lifestyle goals are don’t spend much time looking at the menu because they have already made clear decisions and formulated values that dictate what they will or won’t allow into their bodies.

For a leader who is making decisions on behalf of a big organisation, or on behalf of the shareholders who he is accountable to, or on behalf of a country that he serves (having a comprehensive decision-making framework is non-negotiable).

Even in times of uncertainty, great leaders have to be decisive. By using the tools outlined above, they can become strong and resolute leaders by really delving into the heart of any issue, then using their own personal vision and values to lead them to the right path.

The importance of your reputation

 

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. ~ Warren Buffet.

If you’re in any doubt as to the cogency of this statement, just think Volkswagen, Malaysia Airlines, FIFA, SAA, Bill Cosby, Sony, Penny Sparrow, Chris Hart and Nicole de Klerk. All have taken an absolute beating in the court of public opinion. Some have limped to some semblance of recovery with the help of reputational communications and management specialists, others never will.

For corporate brands that lose their reputational lustre, the impact soon manifests on the bottom line and in the share price – consumers vote with their wallets. For individuals, prospects for employment after a public blunder on the scale of Penny Sparrow’s reprehensible racist rants, amount to exactly zero.

In the digital age, nothing ever escapes Google search or the speed of social media. We’re seeing employees sharing controversial opinions on social media channels that are increasingly putting employer brands in the spotlight. Employers now pay close attention to the company they keep – no job interview is likely to go by without a thorough interrogation of your online persona.

Social media and employees aren’t the only ways that inappropriate remarks can wreak reputational havoc. I have seen countless executives making the most extraordinarily stupid statements in media interviews, and no amount of media training can save them from themselves. Who can forget the ghastly vaseline remarks made by Macintosh Polela after the JubJub trial? The spokesperson for an elite police made an utterly ill-conceived tweet about prison rape as if this was perfectly ok. It cost Polela his job, his reputation and left the Hawks credibility in tatters. Anyone seen or heard from Mac lately?

Anyone drive a Volkswagen? In the heat of the emissions “dieselgate”, the once trusted car brand was forced to recall 500 000 vehicles and slapped with a potential fine of $18billion by the US Environmental Protection Agency (does this hurt yet Mr Financial Director?). VW issued all measure of statements with little solace. Volkswagen’s stock price fell in value by a third in the days immediately after the news broke, its group CEO resigned and it was claimed by Der Spiegel newspaper that at least 30 people at management level in VW knew about the emissions deceit for years – something that VW denies.

Amidst all of this, Wheels24 reported that Volkswagen SA was not “affected by the emissions saga”. VWSA said at the time: “South African VW/Audi vehicles are not affected. South Africa does not have a legislative emission standard so this issue does not apply locally. We meet the CO2 emissions as published in our official specification sheets for all our vehicles.”

Really! So the mere fact that a global citizen like VW lied to the public for six years and intentionally used a device in its cars to evade clean air standards, which are a threat to public health, should not matter to me here in SA? Reputation 101 – just like pandemics, screw ups on this scale know no geographic boundaries. And know that a multi-national reputation brings with it all measure of complexities and multicultural nuances to consider.

Given just how easy it is to send a hard-earned and expensive reputation up in smoke, it really is not surprising that damage to reputation /brand has emerged as the #1 risk facing companies worldwide according to Aon Risk Solutions. The global risk management business polled CEOs, CFOs and Risk Managers in it’s 2015 Global Risk Management Survey, providing comparative insight into different perceptions of risk.

The Aon report goes on to add that with the rapid development of media technology and heightened awareness of multiculturalism, there has been a dramatic increase in the number of ways a company’s reputation can be damaged. However, the tools and levels of effort business leaders use to manage their reputations are lagging, heightening such risk. Despite the fact that damage to reputation is cited as the No.1 Business Risk, the survey shows that 40% of businesses are unprepared to deal with a major reputational crisis.

While some brands may have cookie-cutter plans in place for dealing with a crisis of reputation, few have thoroughly interrogated and documented all the potential risks and scenarios they could face. In fact, few have made a distinction between crisis communications – the what is said, to whom, when and why and managing stakeholder perceptions – versus crisis management – the all-important logistics and background work across multiple departments to sort the mess out. Most simply view crisis communications and management as one big amorphous mass.

For those endowed with a greater appreciation of the power of words and communication, they’ve intrinsically known the value of reputation since forever. But it took a few monumental gaffs to make financial executives realise that there simply is no line item on the financial statements that can calculate the true monetary value of trust, which is after all what reputation is about. Until the paw-paw hits the fan, that is! Then the realisation that broken trust equates to lost sales and dismal turnover manifests faster than a VW can dodge an emissions test.

The reality is, in our hyper-connected society, there has been a dramatic increase in the number of ways a company’s reputation can be damaged. But none of these should come as a complete surprise. A tsunami might be a surprise because you were expecting fire and brimstone instead, but then, you would still have your natural catastrophe recovery plans in place which would work for either scenario. However, product recalls, data breaches, offensive language or slurs on social media, in the workplace or customer communication, fraud, money laundering, system crashes, inappropriate remarks or behaviour by company executives and supply chain disruptions cannot be on your list of unexpected incidents.

And yes, there is insurance cover available to manage such a reputational crisis, but insurers expect clients to have proper plans and resources in place at the outset. The reality is that while insurance can cover the immediate costs of resourcing the response and crisis management campaign, can you really quantify the value – current and in the future – of lost clientele, patronage and respect from public, shareholders and the media?

As Aon says in its risk report, companies need to treat damage to their reputations as understandable and even predictable challenges that one should expect in today’s business environment.

As a final parting thought, there are more than enough factors outside of your control that can impact on your brand’s reputation that will demand your attention and resources. So walk the fine line, keep your promises and always behave in an ethical manner towards your clients, suppliers and stakeholders. Do that and you will have removed at least 80% of the serious risks that can blow your hard-earned reputation to pieces. Behave like a rogue and no amount of reputation management is going to save you from a public execution.

By Teresa Settas, founder and MD of  Teresa Settas Communications

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My Office News Ⓒ 2017 - Designed by A Collective


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