The Great Fall: Losing Your Business Reputation

Last time, I wrote about the value of establishing a positive business reputation and some techniques for doing so.  Today, we're going to look at the flip side of this coin.

Warren Buffett once said, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."  I like to think of BP when I read this, a company whose reputation was utterly ransacked by a single incident and an inability to handle it.  What can you do to avoid situations where your business reputation is damaged?  How can you stop the bleeding when it does happen?

Here are five techniques for doing just that.

First, plan ahead for some of the biggest disasters.  Some of your business planning should be devoted to handling problems in advance of their appearance.  What's the game plan if you issue a faulty product?  What do you do if an employee starts speaking negatively about your business?  These things can happen to any business.  What will you do in those cases?  Think about it now so that you have a rational plan and aren't merely responding off-the-cuff (something that's almost always disastrous – ask Tony Heyward).

Second, be contrite.  If you messed up, you messed up.  Take the blame and don't try to publicly pass the blame to anyone else.  On some level, it is your fault, after all – you put too much trust into an employee or you didn't properly evaluate what a supplier was doing or something along those lines.  Take the bullets yourself and you come off looking a lot better.

Third, be clear on how you're fixing the problem.  Be as open as possible about the actions you're taking to rectify the problems that are now publicly known and damaging your reputation.  You can take out an ad in the paper explaining this, post a note on your website or Facebook page or Twitter feed, or even put up a sign in your store explaining what you're doing to make things better.

Fourth, don't allow even the slightest possibility of a recurrence of the reputation-damaging problem.  If it requires personnel changes, make it happen.  If it requires you to change your behavior, make that change.  If it requires restructuring your business or your operations in some fashion, do it.  Do not allow the situation to occur again.

Finally, go back to basics.  Revisit the things you did that helped you to build a positive reputation in the first place.  What was that reputation built on?  Cut back on new initiatives and focus strongly on re-establishing those things that gave your business the great reputation to begin with, whether it was community involvement, addressing the needs of the customer, great products, great prices, or whatever it was that made your business great.

In the end, it will take time to re-establish your reputation, but time does heal all wounds.  Focus on doing what you can to put a salve on those wounds in the form of your own positive actions.  A successful business can overcome anything.  Just ask BP.