Protecting a reputation might not be profitable or popular

 

MEDIA & MARKETING:Protecting a reputation might not be profitable or popular, writes LAURA SLATTERY

THERE ARE no fewer than 11 references to reputation in the House of Commons Culture, Media and Sport Select Committee report into News International and phone-hacking, and six are closely followed or preceded by the word “damage”.

Reputations are fragile like that: they can be impugned, shattered and stained. They can implode without warning.

It was a lawyer, not a public relations expert, who advised News International to give Gordon Taylor, the chief executive of the Professional Footballers’ Association, a silence-buying out-of-court settlement on the basis that having the hacking of Taylor’s phone “paraded at a public trial” would be “extremely damaging” to the company’s “public reputation”. That plan went well, didn’t it?

Reputation, in corporate circles, is, of course, a proxy for money. Taylor had the power to blow a great big hole in News International’s “rogue reporter” defence and cost the company a lot more money than the £720,000 he received.

It’s a classic example of how the very act of trying to protect corporate reputations is often the thing that destroys them.

And so the uncovering of the cover-up did the damage and, worse, took the phone-hacking scandal higher up the chain. Because Taylor’s settlement was authorised by James Murdoch and not by any of his minions, MPs, QCs and journalists naturally queued up to ask him what he knew, when he knew it, and why exactly this early payment was so large compared with later payouts.

Rupert Murdoch’s “evidently fearsome reputation”, as it is described in the committee’s report, isn’t so evident any more.

The committee, meanwhile, had its own reputation issues to deal with. Having split along party lines on the question of whether it was in their remit to dub Murdoch unfit to run a major global company, its own members decried on television the fact that their 85-page report might be seen as partisan.

The failure of Tory MPs to agree to the “not fit” line didn’t stop the Financial Times from putting it in its headline and calling it “a damning ruling”, however.

Perhaps the Labour MPs who pushed for the inclusion of the line just really fancied having that kind of go at Murdoch now that such a thing was possible. But perhaps they also understood that reputation management is not a zero-sum game.

If your reputation plummets, it doesn’t automatically mean that everyone else’s is glowing by comparison. There is rarely any safety in numbers for brands; there is rather the danger of “ruining it for everyone”.

The media is no different than any other business sector in this regard. When BP spilled the equivalent of more than four million barrels of bird-smothering, shoreline-darkening oil into the Gulf of Mexico, no one turned around and said “well this disaster just proves how cuddly and clean the rest of the exploration business is”. Likewise, the taint of illegal media practices will ultimately spread beyond the shores of News International to journalists who wouldn’t know how to hack a suspected murder victim’s phone if they tried.

It has become something of a truism that managing brands has become difficult, if not impossible, in the age of social media, given it’s now so much easier for consumers to compare notes and, if necessary, start a Twitchfork mob that’s more powerful than any strongly worded editorial. The two combined, as last summer’s phone hacking outrage showed, can capsize even a tanker of a brand like the News of the World.

Corporate reputations, on the whole, are looking vulnerable. Three-quarters of Ireland’s “largest and most visible organisations” suffered a decline in reputation over the past 12 months, according to the annual RepTrak study published yesterday by PR company Corporate Reputations, which undertook the research in partnership with the Reputation Institute.

Some 101 companies were ranked in order of their “reputation pulse scores”, after 3,720 people were asked exactly how much they trusted them, admired them and just generally wanted to have their babies. Google, erstwhile proud purveyors of a “don’t be evil” corporate philosophy, came out top and it’s not hard to see why. Almost everyone – or everyone who hasn’t been crushed by them financially – loves Google. For now.

That’s the problem with having a good reputation – it creates expectations. It is much less tasking, and often more fun, to live down to a bad reputation than it is to sustain a good one – just ask Ryanair. It was ranked 97th in the RepTrak list, with just three financial services companies and a lone tobacco firm lifting it off the bottom. Here, the RepTrak study inadvertently proves that a good reputation will only get you so far. Ryanair might not quite be the Google of the skies, but it is many times more profitable than The Irish Times, Eason, Arnotts, Superquinn and An Post, all of which count among the top 10 most reputable indigenous firms. (The Irish Times Ltd came 24th overall, having been judged more reputable than it was in 2011, but not as reputable as it was in 2010.)

Whether RepTrak’s discovery of dented reputations among Irish corporates reflects a rise in cynicism or an escalation of bad behaviour, it’s impossible to say, but those are long-lasting bristles on the brush that tars. As for dragging reputations out of what must be the ultimately unprofitable mire of public opprobrium, anyone for “show, don’t tell”?

Corporate murkiness such as News International’s failed phone-hacking cover-up only confirms the suspicion that managing reputations and massaging reputations are very similar concepts, and not just because they involve most of the same letters.