Category: Financial Services

Every once in a while, firms face a reputational crisis that is completely out of their control. Beer brand Corona has been a recent example of this, with unfortunate and unwarranted associations drawn by some consumers with the coronavirus pandemic (although sales have remained solid).  But in most cases, firms carry some level of responsibility. It is also usually the ones that are most willing to own this responsibility and take action (where appropriate), that come out better than the ones that don’t.

Case A: KFC

February 2018. A time when, inexplicably, the biggest global brand in fried chicken ran out of chicken. A UK-wide scandal. The reason? KFC’s new logistics partner DHL failed to live up to the pressure of distributing ingredients from its single depot in Rugby, unlike its predecessor Bidvest, which had six. The response? An apology that was bold, unequivocal and quietly funny.

The direct blame could have easily been laid at DHL’s door. But disasters like this tend not to happen often to brands like KFC, and frankly, shouldn’t. So, it was the right thing to do to take ownership, even though it would have been tempting not to, for several reasons:

• Entering a blame game would have only dragged out a corporate reputational war longer than it needed to, drawing further negative attention to the problem than it should
• Refusing to accept blame and adopting a reactive strategy, rather than proactive, would allow wider media and competitors to control the narrative and inflict further reputational damage
• Not accepting shortcomings early that inevitably lead to you being blamed creates distrust and causes long-term, not just short-term, damages. As the cliché goes, it takes years to build reputations, but seconds to destroy them

But apart from anything else, in crises like these, the objective for any brand should not be to repair/deter all reputational damage. It may be hard to accept, but the immediate aims are simply limiting damage and retaining control.

Case B: Volkswagen

In 2015, Volkswagen was embroiled in one of the biggest global brand reputation crises we have seen in modern times. In September of that year, the US Environmental Protection Agency (EPA) found that the car manufacturer had fitted a “defeat device” – or software –  in diesel engines that could detect when they were being tested, changing the performance accordingly to improve its emissions results. This case is still ongoing.

The EPA’s findings only covered 482,000 cars in the US only, including other VW-manufactured car brands. But VW then admitted a much larger figure of 11 million cars worldwide, including eight million in Europe, had been fitted with the “defeat device”. At one point, VW’s share price had halved.

However, VW’s business actions, not just communications, to this crisis benefited both its long-run performance and reputation by taking the following steps:

• Acceptance of responsibility and resignation: In a month, the CEO, Martin Winterkorn, stepped down as VW Group’s CEO saying it had “broken the trust of our customers and the public”. Mr Winterkorn resigned as a direct result of the scandal but did not accept any personal responsibility – certainly an unhelpful parting shot.

VW’s US boss, Michael Horn, said, “We’ve totally screwed up,” and Winterkorn’s replacement, Matthias Mueller, said in his new role “My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned,”

• Internal Inquiry: Winterkorn’s tenure as CEO was tainted by an autocratic culture that came from the top. The new CEO immediately called for an internal inquiry – signalling to customers the process to rectify this problem and identify responsibility was underway, as well as that the culture overseen by the previous incumbent was to change
• Restructuring and cost-cutting: As the crisis developed, VW conducted a global restructure, cutting costs to brace for the impact of overheads caused by the scandal

The result? Figures released in 2018 show sales at the group, whose 12 brands include Audi and Porsche, climbed 4.3 per cent in 2017 to 10.7 million vehicles. In addition, despite reputation management consultants in April 2017 claiming Volkswagen had “destroyed brand trust”, the mass-market VW brand stole US market share with a 5.2 per cent rise in sales.

A delay in accepting responsibility, and Winterkorn’s total refusal to accept personal responsibility were certainly unhelpful. But VW’s swift and thorough commitment to change through business actions communicated an effective enough strategy that one JP Morgan analyst said, “You wouldn’t be able to recognise that they had gone through the diesel crisis.” Sometimes actions speak louder than words.

In times of crisis, how firms respond can define not just their short-term futures, but long-term too. To have a chance in ensuring both, they must place three elements at the heart of their strategy: be honest and plan for the long-term, develop your tactics around what you can control and accept what you can’t, and ensure your business actions are tied to your communications. In short, practice what you preach.

By Emma Andersson

Until fairly recently, working from home was seen as a luxury by some, a useful way to support health and work/life balance by others – but no one was calling it a necessity.

Now, we are all adapting, or at least trying to adapt, to working from home. Naturally, many firms are wondering how they can sustain their company culture without the obvious benefits of the office, its perks and surrounding cafes and pubs: how can a dispersed staff collaborate, retain relationships and stay focused in the same way?

Whether you have a winning company culture or not, culture matters now more than ever – and now is the time to reconnect with your core values. Having a strong internal compass and inspiring employees is key during a time of crisis.

Ever since I put my foot in the Aspectus offices for the first time, I’ve been amazed by the warm culture I’ve been welcomed with, and especially the smooth transition to working from home. Here’s why:

Innovation on the agenda

At Aspectus, this crisis has ushered in a new generation of working from home perks – from motivational speaker sessions every Wednesday to meditation on Tuesdays and Thursdays. From organising monthly virtual learner lunches to provide ongoing training, to attending virtual pub quizzes and hosting weekly competitions – but what is driving this? A positive employee mindset – the core of a winning company culture.

Visual internal comms is a must

The power of video has never been as crystal clear as now. Replacing traditional comms with video conferencing is proving to be an insanely good way to empower staff and boost communication – all from home. Like many others, I would avoid video comms and preferred calls, but now it feels strange having a call without seeing them. And if you haven’t set up weekly virtual coffees with your colleagues yet, I suggest you do it now.

Invest for the best

The world might be on pause, but it doesn’t mean your growth needs to be. Even if you have a team with a dazzling skill set, they still need to stay challenged. A way to motivate your remote workforce is by focusing on personal improvement. Now is the time to focus your team on their potential. In our team, we have been encouraged to pursue any areas we want to upskill and attend any webinars we want during work hours.

Overall, even though this is sure to be a challenging time for many, the new perspective gained from working from home may well have changed internal communications and company culture for the better. We may not have exquisite local coffee from Nepa or free bar Thursdays, but we might have gained new valuable insights in how to keep people motivated. If anything, it has shown that there is much more that binds a company together than just the perks of the office.

You probably have no idea what a ‘gong bath’ is, and recently, neither did I. Then, as part of Aspectus’ winter wellness initiative, a group of us were taken to the GONG studio.

Here, our Gong teacher Selma, explained that a gong bath is an ancient healing practice in which sound waves, produced by a gong, heal the mind and body. Laid back on a matt and equipped with a blanket and eye mask, the gong sounded for 30 minutes, transmitting frequencies to the brain which lulled me to a surprisingly meditative state throughout the session.

According to Selma, the gong sounds are used to restructure the body’s water molecules. As humans are comprised of 70% water, the vibrations flow seamlessly through your body, placing you in a deep state of consciousness and relaxation.

Different sound frequencies stimulate the body and mind into balancing its inner emotions and alleviate existing mental challenges – in other words, into better communicating with itself. Some of the frequencies that we’re unfamiliar with at first can have the greatest effect.

But can we apply these lessons about better communicating with ourselves to improve our communication with others?

The incomprehensible is important

Most interactions between people consist of many unintelligible energies. Despite often going unnoticed they are extremely informative. An indication of any effective human-to-human contact is the ability to read the nuanced, non-verbal messages we convey to each other. For example, through eye contact, body language and tone of voice.

These have the potential to convey our true emotions, not necessarily expressed verbally at surface-level communication. A ‘successful’ interaction ensures that these are listened to by both parties, much like the body listens to the gong.

Sometimes, what seems incomprehensible can be therapeutic. The gong bath process and an effective conversation have various requirements in common.

Receptiveness is required

In order to truly be comfortable during a gong bath, you have to be open-minded and welcome the seemingly obscure process. Your body needs to be loosened and your mind clear of thoughts in order to create an environment conducive to relaxation.

Both parties within a conversation must be open-minded and mutually receptive to the words and emotions transmitted by the other. An interaction must see the emotional aspect accounted for, as opposed to only the verbal one.

Presence is a must
A gong bath demands your presence, both physically and mentally. You’ll find yourself navigating between different (often random) seas of thought. The task is to catch yourself doing so and leverage your in-the-moment presence to prevent you from drowning in those thoughts.

We can all be guilty of being somewhere without actually being ‘there’, and we never know how annoying it is until we’re on the wrong end of it. A productive interaction is one in which both parties are fully present throughout.

Listen to the frequencies

Once present, you need to actually be listening. Without listening to the frequencies of the gong, the healing process is ineffective. Similarly, a conversation without listening is futile. ‘Listening’ goes beyond ‘hearing’, but actually interpreting and deciphering the valuable pieces of information.

Acknowledging the information communicated by the gong or your counterpart leads to understanding. This is the overall goal of both a gong bath and an interaction, enabling you to understand other people as well as yourself and your emotions more effectively.

Gong baths might not have been on the job description but, four months into my communications career, I’m recommending that you try one too.

Listen to the gong, listen to people and listen to yourself – they’re all trying to tell you something.

Kanayo is a Spanish with International Relations graduate from the University of Southampton now working as an Account Executive in the Financial Services PR team at Aspectus Group.