Alsop’s Law One: Maximize Reputation

28 Mar

reputation-balloon_041This post is the first in a series discussing Ronald Alsop’s The 18 Immutable Laws of Corporate Reputation. I just started reading this book. It’s been on my shelf for a while. What could be a better time than now, in the aftermath of Madoff and AIG nationally, or  DHL’s decision that is impacting the entire southwest region of Ohio?

Alsop is a fan of being prepared. His first law illustrates FedEx’s successful crisis scenario testing. At the time the book was written, one of the company’s trucks was in an accident and caught on fire. FedEx’s legal, PR and operations team sprang into action together. They worked to substantiate facts about the accident, bring them forward for news media and clearly communicate with families and the public. Another big part of their job was to minimize news coverage, as any continued replay of the accident would be damaging to their brand. One of the benefits to having a company name emblazoned on trucks and other transport is the mobile billboard effect, but in a crisis this can be a detriment. By quelling the telephone effect of word-of-mouth news and speaking as an informed source about their own accident, company spokespersons helped out media and protected their reputation.

Just a few days ago, on March 23, a FedEx cargo plane with two pilots on board crashed at Tokyo’s Narita airport, tragically killing both on board. Significantly, Bloomberg’s headline detailed this as FedEx’s “first fatal” crash. I didn’t see the accident replays on news programs, but I watched the looped footage captured by airport security cameras and put up on YouTube. I wonder what Alsop would say of this. It isn’t something you can keep people from accessing, and news coverage is becoming one among many information sources. As with the video, the still shots I saw on various online sources did not show the FedEx logo on the plane. I wonder whether FedEx PR worked with media to suggest these shots? On January 27, a crash of a smaller FedEx plane at a Texas airport was not fatal, with both pilots safe. News footage clearly showed the arrival of emergency vehicles and extinguishing of the flames, but the logo was not visible.

My bet is that FedEx had a crisis plan in place that their staff followed to the letter. Based upon what Alsop describes of their internal preparations in his Law One, they talk through every possible situation and practice their response in rehearsed exercises. It’s funny, but I didn’t know that the movie Cast Away (with Tom Hanks) is about a FedEx pilot. I understand that the company carefully weighed pros and cons of working with the production team on this opportunity, because clearly a plane crash movie using their brand could have been a big PR nightmare. But it seems that the pros won out, and the overall message of penultimate service was the overriding theme of the movie, with the pilot intent on delivering a package even after being stranded on a desert isle.

Law One also provides examples of “don’ts,” from companies who have responded poorly in crisis situations, therefore damaging their reputation for years. He provides data indicating that it can take 3-10 years to repair reputation once damage is inflicted, and this is costly.  Cases in point: Audi’s defensive response to the claim that 5000 series models to suddenly and  inexplicably accelerate; Xerox’s fraud problems in the early 2000s that continued even after their spokesperson incorrectly declared that they had moved past the issues.

Alsop’s concept of “reputation capital” is key in Law One. He explains how companies carefully nurture reputation over time. Companies like P&G, who’ve been in business for years, have time to build up trust with consumers. Alsop is clear that this is not easy, and reputation-building is an ongoing process. He provides examples of DuPont and General Electric. Who can argue with the ultimate sign of positive reputation, when the public actually uses the brand name to describe the generic product (e.g., Kleenex for tissues)  or service (e.g., FedEx for delivery services).

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One Response to “Alsop’s Law One: Maximize Reputation”

  1. David Nour March 29, 2009 at 12:41 pm #

    Great to see you bring this topic to the forefront with this post.

    In our Reputation Capital® consulting and training campaigns we reiterate several critical points:

    1. The quantifiable perceptions of an individual, a team, and an organization’s reputation
    2. Key reputation enhancers most individuals don’t think about or apply consistently
    3. Risk mitigation strategies similar to a cohesive plan the FedEx team has in place
    4. The strategic rewards when a “reputation plan” is executed consistently
    5. The reputation foresight astute leaders bring to their organizations as a unique differentiator!

    Best,
    David Nour
    Author – Relationship Economics
    http://www.relationshipeconomics.NET

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