How consumers view a brand after a crisis is becoming increasingly important to Malaysian businesses, with many industry stakeholders now putting reputation ahead of profits.
This is according to a recent discussion paper released by the Malaysian Institute of Integrity (MII) and the Chartered Institute of Management Accountants (CIMA). Figures published as part of the paper show that 70 per cent of financial leaders in South-East Asia say their company is prepared to lose profits in the short-term in order to protect its long-term reputation.
More than three-quarters (79 per cent) also claim to place more focus on reputational risk today than in previous years, while half (49 per cent) have rejected a project that made financial sense due to the reputational risk being too great.
However, how companies are monitoring their reputation would appear to require more thought, as 95 per cent of organisations admit to not effectively tracking social media channels for feedback to help them anticipate and manage reputation risks.
An important example of reputational risk
While not every risk to a company's reputation is going to break on a global scale, there is one business in Malaysia demonstrating how quickly things can go wrong.
By mid-2014, the world had turned twice to South East Asia as tragedy struck one of the country's major airlines in both March and July. Now, doubts hang over the future of the company as it struggles to repair trust in its brand following the tragedies. Recovering its reputation is going to be a long and difficult process, as families and the world continue to mourn and ask questions.
When the news of each tragedy broke across the globe last year, both local and international consumers took to the media to express their grief, concerns and opinions of the events. Both digital and traditional media published thousands of related stories, sharing information on the occasions and the response from the company.
In fact, within a week of the second plane going down, the news became the single most covered item across Australian media, with more than 37,000 internet news stories published and 28,500 television broadcasts aired in the seven days following the incident. With 37 Australian citizens on board, it seems likely the tragedy will dominate Australian media for some time to come.Although your company may not suffer an event on the scale of the missing airliners, you can learn a lot about the media and consumers' reaction to the events. As many focused on the families and emotional trauma of the incidents, there was also a lot of noise based on the future of the airline itself. This talk continues today, which shows just how lasting reputational damage can be and demonstrates why strategies to monitor and protect your brand are crucial.