It’s universally understood that businesses trade on trust and that reputations run very deep and wide.  In fact, approximately two-thirds of company directors count reputation as their organisations’ number one concern, which explains why executives are paying more attention to preserving and managing the long term sustainability of the enterprise by understanding the complex relationships between all stakeholders.

“In today’s increasingly complex world, it’s important to remember that invariably operational failures will happen.  As business head winds threaten with increased velocity, leaders must be well rehearsed and prepared for a broad range of potential crisis scenarios and stay focussed on winning the hard-fought corporate chess game and safe guarding its competitive edge. Managing a crisis well cultivates resilience.  And resilience ensures survival,” said Georgie Morell, Director Media & Communications at Market Eye.

When a crisis hits the heart of a company, its foundations are rocked and as history shows a tsunami of dire consequences can unfold: share prices tumble; employee morale sinks; productivity suffers; regulation tightens its squeeze; customers boycott; and the media circus gains momentum.

A crisis can destroy a company’s market capitalisation with alarming speed. And the mood of employees, investors, regulators and law enforcement can grow dark at an equal rate of knots. Its once robust moral principles come under heavy assault and few chances are afforded to companies and their leaders if they do not respond quickly and confidently with the right message, at the right time.

Having a considered and frequently tested crisis communications strategy can help to avoid reputational firestorms.  With an effective strategy a leader can marshal support and goodwill, neutralise damage and criticism, and preserve assets – both tangible and intangible.

“Every company is vulnerable to a “Black Swan” moment and leaders can’t risk just paying lip-service to having a crisis plan – it has to be part of the business triage and a cultural standard embedded in the organisation.  Leaders must consistently engage in meaningful dialogue with stakeholder groups to build trust, ensure transparency and build integrity,” said Adrian Mulcahy, Executive Director, Market Eye.

The penalty for missteps in the early phase of a corporate crisis can be ruthless. Think about Nine Network’s ‘60 Minutes’ bungled kidnapping in Lebanon, BP’s Deep Horizon oil spill disaster, Toyota’s safety issues and NewsCorp’s phone hacking scandal – they all share a common anatomy: cultural and operational ambiguity, a slow response, a lack of transparency, empathy and integrity, a defensive and sometimes arrogant attitude and little authenticity.

“There’s just too much at risk and no leader wants to find themselves in emergency crash management begging for forgiveness, especially when they are supposed to be the respected guardians of good corporate behaviour. As we know shrapnel can travel long distances and cause catastrophic damage.  The best insurance to managing a crisis begins with a detailed plan.  The plan sets out the process beginning with the acknowledgment of the crisis; recognising the need for insight, hindsight and foresight; and preparation of and investment in a robust plan.  Without it, it will most certainly be a perilous battle and a very long road to recovery,” concluded Mr Mulcahy.