The CEO in Times of Crisis
A brand’s response to an image crisis is key to maintain a healthy relationship with the target audience. We should keep in mind that, according to KRC Research, 85 percent of consumers build their opinions on companies based on the way brands react in face of a crisis.
The data above reveals a much more complex scenario for the strategic communications teams of any commercial firm, understanding that a clarifying press release or an apology shared in social media will not suffice today to satisfy the demands of an inflamed audience. The CEO should be a key player in solving the problem.
According to Angélica Cabrera, Managing Director of Band of Insiders, “the CEO is the figure with the most authority within an organization and is perceived as the person with the necessary power to reach a solution to a problem, besides being presented as the person responsible for the company and its operations, with a superior credibility level to any other company spokesperson”.
A CAPITALIZABLE ASSET
Thus, this player’s value lies in the asset that his image and reputation represent for the company. It is, therefore, not only a matter of who approves the budget and action plan; his image is vital to protect the brand.
Weber Shandwick Mexico indicates that global executives attribute more than half of their company’s market value to the CEO’s reputation, in fact, the positive reputation of the managing director of any company increases investor attraction (88 percent), protection against crisis (91 percent) and the attraction and retention of talent (81 and 79 percent respectively).
In times of crisis, there is more at stake that the mere image of the firm at issue. It is about a situation with direct and, in extreme cases, serious impacts on business performance; stakeholder relations can also be affected, in addition that a crisis can also impact the organization’s operation and even lead to its disappearance.
In this sense, strategic teams should not ignore the lifeline that a CEO with a good reputation represents to be able to successfully navigate a bad moment for the brand.
As Mariana Sanz, Managing Director for Edelman indicates; “80 percent of Mexicans believe that CEOs should take initiative towards change, something that tells us that the trust deposited on this figure is enormous. Consequently, it is very important that, the same way reputation is built around the company or the brand, work is done around the CEO’s reputation.
IT’S NOT ONLY ABOUT REACTION, IT’S ABOUT PREVENTION
However, the CEO’s role in light of a crisis scenario should not only be active in terms of reaction, but in his hands lay a large part of the preventive measures that should be followed to avoid, at all costs, that a brand reaches this breaking point.
As indicated by Mauricio Gutierrez, Managing Director of JeffreyGroup Mexico, “before a crisis erupts, the CEO has in its hands the power to decide and assign the resources that allow the implementation of the reputational risk management model that best adapts to the company, according to its nature and also by incorporating this topic to its agenda, enabling the implementation of follow-up and control policy, and by producing and promoting the implementation of mechanisms, actions, initiatives, campaigns and/or alliances that shield the company from future risk scenarios”.
The wake-up call is for companies. Now more than ever, the skills considered to hire a top executive will not only center around his industry knowledge, market understanding and long-term business vision, but will also have a growing focus around the empathy that the professional’s reputation has on the company’s values.
By Mesa editorial Merca2.0 – 04-30-2019