There comes a point in a business’ evolution when corporate reputation simply cannot be left to chance. Executive boards need to embrace comms and understand the importance of managing their reputation – or risk serious consequences.
At a recent networking bash, I got talking to the chief exec of a London-based construction firm – a mid-sized privately-owned contractor that’s turning over more than £100m, and growing fast.
Conversation turned to communications, and I was surprised to discover that the responsibility for the business’ PR and marketing operation rested with the chief executive himself. This is a £100m+ turnover business that employs almost 1,000 staff, with no discernible communications infrastructure and not one single marketing person working at the company.
We’ve found that this is not uncommon in businesses of a certain size; not just in construction but in many different industry sectors. Senior management sometimes believe PR to be an additional (and expensive) luxury, rather than a fundamental necessity that’s vital to the long-term success of the business.
For companies like the aforementioned construction firm, the ‘if it ain’t broke, don’t fix it’ argument can be compelling. The business is growing fast and winning new projects, and as of yet has experienced no issues that have caused significant reputational damage. But if this business is hoping to make the leap from mid-sized family business to ‘top tier’ contractor, there are a number of reasons why it cannot afford to leave its corporate profile unmanaged.
Responding to crises
No matter how well a business is performing, a single, poorly managed crisis can destroy a company’s reputation instantly. Businesses that actively manage their reputation will put in place a plan for responding to a crisis and have experts on hand who are able to execute that plan. They will have also built up a cache of goodwill towards their brand through ongoing proactive public relations, which will enable them to communicate their side of the story more effectively when the time is right.
Many sectors, including construction, are in the midst of one of the worst skills shortages in living memory; with the increase in output fast outstripping the expansion of a skills pool reduced by years of recession. Companies are competing with their direct competitors and also with other industries for a diminishing pool of talent – how can they expect to attract the best and brightest if they are not promoting themselves across different channels?
Gearing up for a sale
The owners of many large family businesses, when the company gets to a certain size, will be considering their exit strategy. It’s important to remember that the value of that business isn’t based solely on the bottom line; it takes into account the reputation that business has and its potential to go to the next level. An investor or buyer wants to see not only a healthy profit, but a business with a professional brand and a strong profile in its given sector. Without a strong communications function proactively managing its reputation, this will be very difficult to build and maintain, and may harm any prospect of a future sale.
Tom Short is an account director at Camargue