Talkback: Preparation for adversity reaps many rewards

While debate continues in the media over the impact and likelihood of a number of disaster scenarios such as bird flu actually eventuating, businesses would do well to consider that the company that is prepared for adversity not only protects its market share but also its reputation.

In fact, managing and being seen to manage well in a difficult situation can ensure a company emerges from its ordeal with its reputation not only intact, but enhanced.

Reputation is important to us. As individuals we like to think we're well thought of and, from a corporate point of view, having a negative or positive reputation has a direct impact on the bottom line.

For some companies, the management of corporate reputation is taken very seriously - it is recognised at board level as being an integral part of the measurement of a company's performance and is not treated as an optional extra.

These companies recognise that reputations are built over time, and through a variety of channels, but the acid test for good reputation management often comes during a crisis; in other words, those moments when something goes drastically wrong.

Protecting and managing a corporate reputation requires constant vigilance even during the good times; vigilance in terms of ensuring your company consistently meets the needs and expectations of those who have an interest in your organisation. This includes staff, suppliers, customers, the local community and shareholders. The way a company responds to, and deals with, these various groups during times of crisis or disaster can make or break an organisation.

From a customer's point of view, crucial "moments of truth" usually occur around the way a complaint is handled or how a problem concerning a product or service is solved, while for staff these moments often coincide with the way a company and its management cope in adverse situations.

So who in an organisation should manage its reputation? The simple answer is everyone. Effective reputation management requires collective responsibility, and for all aspects of the organisation to drive and champion the cause. But above all, it is the chairman and the chief executive's role to be the "reputation guardian".

It must be an integral part of the culture and should not be viewed as the exclusive domain of the communication manager or the chief executive's office.

Just as important is the anticipation of risks to your business and having a comprehensive plan to manage them is crucial for protecting your reputation. It is as important as other management functions.

A good example of this is securities firm Morgan Stanley. Despite having 3700 employees caught up in the September 11 attack on the World Trade Centre, the company came through its ordeal to receive international praise for its prompt and efficient response to the tragedy.

Within 24 hours of the event, it had recovered sufficiently to be able to release an analysis of the financial impact of the terrorist attack on the insurance industry and commissioning of an alternative site allowed its retail operation to be back in business within hours.

The fact that the company was able to respond so swiftly was largely due to the actions of its staff. By following a rehearsed evacuation plan, they were able to leave their offices quickly and calmly, with the result that all but seven of the company's employees survived when the towers collapsed.

Clearly companies that do the right thing, and are seen to do the right thing, will always be in a stronger position than those who have no formal process in place.

So focusing on the likelihood or otherwise of something occurring is irrelevant. Severe disruptions to business can strike at any time and in a number of ways, so the emphasis for management should be on anticipating and managing risk where possible, and having business continuity plans in place to deal with problems should they occur.

* Sue Milne is a partner of communications company Senate Communication Counsel.