Your company name’s muck. People turn up their noses when you mention it. Sometimes they cross the street rather than walk by your premises.
Losing your reputation is many a boss’s nightmare. Even the most thick-skinned owner-founders will wince at the impact it can have on the bottom line.
Look at Sports Direct and its founder Mike Ashley. After years of hearing his firm badmouthed by investors over corporate governance issues, Ashley finally changed tac when ‘workhouse’ working practices at the firm’s Shirebrook HQ hit the headlines – and the share price.
In response, he’s made a contrite appearance before a select committee, invited the papers and MPs alike to look round (presumably they won't get body searched...), announced an independent review of working practices and now opened the firm’s AGM to the general public for the first time.
It’s not enough. The MPs haven’t let go. The powerful Investor Forum is reportedly going to make a rare public call for a review of how the company is run. All the while the headlines continue.
If you find yourself in this position, what can you do to get your reputation back?
Don’t be evil
Think carefully about why you’re struggling with your reputation. What do people think you’ve done wrong? If there’s any truth to it, it goes without saying, stop immediately and apologise.
If you think everyone’s got the wrong end of the stick and you’ve been unfairly maligned, that doesn’t give you a license to carry on regardless. Instead, you need to be scrupulous in avoiding anything that could give the wrong impression. Your recent track record should be unimpeachable.
Hire independent directors
Resolving to change is one thing, but if you want people to believe you you’ll need to prove it. One of the best ways is appointing independent directors and/or chairman. They should be well respected and previously unconnected with you or your firm.
A word of warning though – a seasoned grandee may get you street cred with investors (after all, why would he or she work with you otherwise?), but don’t expect them to be pushovers. If they think you haven’t changed your spots, they’ll walk, leaving you in worse shape than if you’d never hired them in the first place.
Good deeds don’t cancel out bad ones, but giving back to society at least gets people talking about you for reasons that don’t include the word ‘scandal’.
Supporting a charity or social enterprise will go down well, but remember philanthropy can backfire. Flaunt it too much and it will just look like a cynical ploy.
Open your doors
You’re pulling out the stops but still people are suspicious. Of course they are. Once lost, trust is very hard to get back.
The best way round that is to make yourself as transparent as possible. Bare your corporate soul, publish the minutes of meetings, invite investors and the media to look round and –ideally – hire independent firms to audit and review any aspect of your business that’s controversial.
It’s possible that your reforms will convince City investors, but do little to sway the general public (and by extension, customers). Mud sticks, after all.
Changing your corporate name may offer a route out of that, although expect it to be neither cheap nor easy - your current name may be sullied, but at least people have heard of you. There's also the risk that it makes it look like you've got something to hide.
The last resort
By now the company’s so saintly it's barely recognisable. For entrepreneurs (professional CEOs rarely long survive a reputational collapse), this raises the question of whether the firm would be better off without you.
This doesn’t mean selling, necessarily, but stepping down from direct involvement in the management of the business. Your ego may not like it, but your wallet might.
Image credit: Hariadhi/Wikipedia