Actions, not Words, Build – and Destroy – Reputations

This month’s article challenges us to re-think reputation management in E&P.  It is written by Simon Philips, an expert in marketing, branding and communications.  Simon was formerly Global Head of Communications & Marketing at UBS Investment Bank.  http://www.structuredmarketing.co.uk  simon.philips@structuredmarketing.co.uk

Simon Philips

Simon Philips

Peter Smith’s post on the oil and gas industry’s public image leads us on to the question of reputation management. Few people would question the need for a positive reputation, but in sectors that don’t deal directly with the public – eg oil exploration, investment banking and private equity  – it is often tempting to think it’s enough to limit efforts to a narrow group of stakeholders. But those stakeholders – investors, regulators, governments, local communities, current and future employees – pay attention to public opinion, and their responses to public opinion will have a direct effect on an industry’s ability to grow – and its licence to operate. There are two key lessons.

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The first is that this has to be an active management issue. Unfortunately too many senior executives believe this can be purely reactive, left to a PR department to spin as and when necessary- keep a low profile and keep out of trouble – or even left to an industry body. But as we all learn early on, nature abhors a vacuum. If a business doesn’t actively manage its reputation, it will find that others will do it for them. Journalists, activists, past employees, customers, competitors – all can shape a firm’s reputation as they talk amongst themselves, and in the absence of anything else, their opinions will create the public perception of the business.

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The second – and more important – point is that words and deeds have to match. It sounds obvious but we have seen all too often how corporate business principles are contradicted by the activities of individuals – eg banks proclaiming “clients come first” at the same time their traders were selling clients investments they knew would lose them money. This is why it cannot be left simply to PR departments. If a firm and the individuals in it do not behave in a way consistent with its public positioning, the public will rightly decide that the public announcements count for nothing. Indeed, as Peter suggested, there is already scepticism towards glossy PR campaigns and window-dressing CSR activities from the petroleum industry.

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This isn’t just about the extremes of behaviour that result in very public disasters. It’s also about how the corporate culture shows up through everyday activities. It’s sometimes said that corporate culture is what happens when management isn’t looking: how firms treat their suppliers, how individuals behave in negotiations, how visitors are welcomed (or not), how easy it is to contact people or to make a complaint. In marketing jargon, it’s about getting it right at all the “brand touchpoints”.

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In the past, conventional wisdom was that for every bad experience at one of those touchpoints, someone will tell 8-10 other people, while a good one might be passed on to 2-4 people. In the days of social media, those numbers have multiplied ten-fold or more: in one famous case involving musician Dave Carroll, his guitar and an airline, the “dissatisfied” message reached 150,000 people in one day via YouTube (video clip here). That’s how public reputations get managed today, and that’s why companies have to take active control of it.

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Actively managing your reputation means defining clearly what you stand for – your vision and your values; understanding your audiences and their concerns; and making sure you uphold your reputation consistently and regularly in both communications and behaviour.

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The PR team can polish and distribute the messages, handle journalists and monitor the conversations going on in social media; but every employee of the company has a role to play in shaping the firm’s reputation through their actions, and management need to make sure this is universally understood.

Comments

  1. A great post. I hope industry participants, especially executives, give it their full consideration.

    I will add that it is also important for industry participants to hold each other accountable for both maintaining and strengthening the industry’s reputation. For example, there are persons in the industry that refer to themselves and others as “oilfield trash” when engaging in public discourse. Those who use this term will argue, weirdly, that it’s a badge of honor; a term that captures the unique esprit de corps that exists among many oilfield workers. But today’s oilfield employs some of the most talented and committed professionals to be found anywhere, and I know they resent the notion that they and/or their colleagues are “trash” of any kind. More importantly, referring to industry participants as “trash” only encourages the public view us in a lower light. If we as an industry don’t respect ourselves and the work we perform, how can we expect the public to do so? Think about it.

    • Simon Philips says:

      This is a very good point, and an example of how an “in-joke” that helps a team bond within itself can backfire when exposed to the public. We saw the same thing with investment bankers when they created their highly complex and ultimately dangerous derivative products and gave them internal project names like “Black Hole” or “Devil Fund” – not so funny when splashed across the FT. No one wants to be a killjoy but you have to think what these phrases might mean to the wider world.

  2. Very nice article.
    Gone are the days where company’s image is managed only bt ‘top management executives’.
    This is an era whereby leadership is encouraged at all levels throughout the organisation, and as such it is imperative that all employees take this piece seriously.
    All employees should therefore ensure the consistency of the company’s culture through the quality of their actions.

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