Reputational crisis, how to handle it
Keeping one's reputation intact is a major challenge. One false step could cause permanent damage, with significant and lasting consequences on the identity and image of the brand or individual.
Reputational crisis, how to manage it and turn it into an opportunity: Ferragni vs. North Face case
In an increasingly digitally interconnected world, a reputational crisis is like a sudden fire that threatens to burn the reputation of a company or an individual.
It is a critical moment when every move is under close scrutiny. However, it is also an opportunity to demonstrate strength and integrity. Managing it effectively is crucial in the age of instant information.
"With difficulty one regains one's reputation once lost."
Cit. Publilio Siro
Keeping one's reputation intact is a tough challenge. A single misstep could cause permanent damage, with significant and lasting consequences on the identity and image of the brand or
of the individual.
Crisis types
A crisis is the consequence of unforeseeable events that threaten the normal course of daily and future activities, and also jeopardise relations with the public.
This can cause significant damage to the company's image and reputation.
Reputational crises can have various causes and require equally diverse management strategies.
They can stem from:
- Natural disasters, epidemics, and terrorist attacks: external events can disrupt business operations and damage reputation.
- Criminal attacks, sabotage, or extortion: harmful actions require swift and appropriate responses.
- Human errors: can cause crises if not promptly managed.
- Technical failures: operational issues can negatively impact production.
- Unsustainable business practices and corruption: harm reputation if not properly addressed.
- Lack of innovation and updates: can lead to crises, especially in tech sectors.
- Communication crises: controversial communication strategies can generate backlash.
- Conflicts with employees and unions: can have negative consequences if not properly managed.
Dealing with crisis: crisis management
Crisis management is the set of strategies and actions aimed at addressing and managing business emergencies. It is essential for corporate resilience, especially in contexts with multiple simultaneous crises. The objective is to effectively prevent or overcome a crisis through careful planning and prompt reactivity.
Through structured planning, the necessary measures are established to ensure the proper functioning of the organisation and to cope with possible future crises.
These actions must be designed to limit damage, protect interests and restore the operational routine as quickly as possible following unexpected events or critical situations.
It may be necessary, if not indispensable, to plan for the crisis.
Crisis planning: steps to follow
Crisis planning is a key step to anticipate and address potential risks, thus ensuring business continuity for the company.
Here are some key points to consider
- Formation of the crisis management team: selecting competent and responsible individuals who will lead the company's response in critical situations.
- Drawing up the crisis management plan: draw up a detailed plan outlining the actions to be taken and the resources to be deployed to address business challenges during a crisis.
- Planning procedures and timeframes: clearly defining when and how the plan will be implemented, establishing who will be involved and what their roles and responsibilities will be.
- Preparation of recovery tools: identify the resources needed to respond promptly to a critical situation and ensure that they are available and accessible when needed.
Communication control
Effective crisis management requires careful control of communication. It is crucial that information is handled in a timely and clear manner, with the aim of protecting the company's reputation.
Internal communication is crucial to ensure that managers and employees understand the situation and are aligned on the procedures and actions to be taken. Likewise, effective external communication is essential to maintain the trust of the public, customers and other stakeholders.
It is important to establish an active social media presence and constantly monitor activities in order to correct any negative information and actively engage the public.
Chiara Ferragni's reputational crisis: handling the pandoro gate case
The crisis involving Chiara Ferragni began with a hefty fine of EUR 1.4 million imposed by the Antitrust Authority on two of her companies and the company Balocco. The spark was ignited following the 'Pandoro Pink Christmas' advertising campaign, presented as a noble gesture of charity towards the Regina Margherita hospital in Turin.
However, the Antitrust Authority deemed the campaign misleading, as the sale of the Pandoro did not really contribute to the donation. This scandal caught the attention of the media, prompting Ferragni to make an open admission of error on social media. However, her uncertain communication resulted in a flight of followers and the loss of some important collaborations with renowned brands.
Currently, Chiara is trying to regain the trust of her fans and brands, but this episode has highlighted her team's lack of preparation in managing a reputational crisis.
North face: turning a media storm into an opportunity
The North Face has turned a viral complaint on TikTok into a remarkable victory in handling a possible crisis.
The brand recently attracted attention for its prompt response to a viral video in which a customer, Jenn Jensen, expressed disappointment about the performance of a jacket claimed to be waterproof. The video, with over 12 million views, begins tragically with the words: 'I've got a bone to pick with North Face'.
Despite the light tone, the customer clearly exposes how the jacket has left her completely at the mercy of the rain. Jenn's request is simple: a truly waterproof jacket, delivered via express delivery. The reaction on social media was lively, with a series of negative comments and funny memes. However, rather than
limited to a refund, The North Face decided to act in a big way.
It delivered the jacket via helicopter to the specific location, documenting the entire process on social media. This move provoked an extremely positive reaction and underlined the importance of two-way communication between brands and the public on social media.
Demonstrating transparency and accountability helps brands to
be perceived as more authentic in the eyes of young consumers.
Reputation, a good to be preserved
In conclusion, the effective management of a reputational crisis is crucial for business success in the digital age. The recent experiences of Chiara Ferragni and The North Face demonstrate that transparency, readiness to recognise problems and timely solutions are essential to turn a critical situation into a brand-building opportunity.
A solid corporate reputation is a valuable asset for any company. Not only does it help attract customers and increase sales, but it also contributes to enhancing employee commitment. Therefore, it is crucial to approach corporate crises strategically and carefully to preserve this valuable asset.
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