How businesses can best respond to a global crisis

In this opinion piece, Steve Leigh, the Managing Director of Sensu Insight explores how businesses can best respond to world crises and what businesses should consider when issuing responses to big events.

In response to the war currently taking place in Ukraine, world governments and the public have condemned the actions of Russia. Businesses have also become involved in the discussion, issuing responses, and even suspending services within Russia. These brand responses have varied in severity and scale but have ultimately reflected support for Ukrainians affected by the conflict.

However, whilst some brands, such as McDonald’s, have received praise for their response, others have suffered reputational damage due to their response, or lack thereof, for a multitude of reasons. But what has caused this and how can business leaders be better prepared for the future?

To help understand the issues most affecting public perceptions, we carried out our own research. The resulting report shows the impact of speed of response, the effectiveness of communication, and ranks the impact on each company’s reputation.

Study findings

Our research covered the 50 businesses most associated with the conflict, identified using Sensu Insight’s proprietary brand tracking tool. 2,000 UK adults were then surveyed, with the data used to create reputation Impact Scores. These scores were based on public sentiment in addition to the level of each organisation’s level of public association with the conflict.

McDonald’s came out on top for its response to the war, with 28% of UK adults, who were aware of its actions, saying their view of the company had improved or significantly improved. McDonald’s received the highest positive score of +592.4, following the brand’s announcement to close all 847 of its Russian restaurants in early March.

This was then followed by Mastercard, which suspended operations in Russia on March 5th, with an Impact Score of +424.3. Coca-Cola (+390.5), Visa (+344.6) and Ikea (+237.51) all followed close behind, further underlining the correlation between brands that took swift action against Russia and improved public perception.

Businesses with the most negative approval ratings, such as Gazprom, Apple and BP, were either thought to have been slow to react (taking more than two weeks on average to respond, compared to ten days on average for the highest scoring), closely associated with the Russian state or were perceived to have put business needs ahead of humanitarian concerns.

The research also revealed that customer purchasing behaviour also changed as a result of brand reaction to the Ukraine conflict, 18.5% of the public have stopped buying from a brand that showed no supportive action or sentiment for Ukraine, whereas 20% have actively looked for brands that did show support.

Despite the action taken by companies and organisations, whether it be withdrawing or suspending services in Russia, according to Sensu’s findings, over half (54.7%) of Brits believe that many large-scale corporations can still contribute more to the conflict.

Respond quickly

Something made abundantly clear by the study was the correlation between speed of response and positive reception by the public. The top five highest-scoring organisations took an average of 10 days to respond, whereas brands that scored negatively took 16 days to respond on average.

This data suggests that the speed of the response by businesses can have more of an effect on the way they’re perceived by the public than what the response was itself. Swift and decisive action that took advantage of the news cycle at the time allowed brands to boost their own reputations by positioning themselves as the fastest responders.

Communication is key for reputation management

While speed clearly made a difference to brand reputation in their responses to the conflict, there were some interesting and notable exceptions that suggest effective communication can be just as powerful of a tool to boost reputation and public appeal.

In Apple’s case, it received a negative Impact Score despite being one of the first companies to announce its withdrawal. However, CEO Tim Cook received criticism. He was accused of staying silent after Mykhailo Fedorov (Ukraine’s minister of digital transformation) wrote his ‘Dear Tim..’ letter shortly after the invasion, asking Apple to set an example.

Nestle was one of the few brands not to completely withdraw or suspend activities in Russia (at the time of writing). Despite this, Nestle received a positive Impact Score of +137. The public reacted well to its humanitarian approach. Suspending its non-essential brands in Russia, such as Nesquik, but continuing to supply essential products, such as baby food. So, what can businesses learn from these findings? And how can they use the data to enhance their own responses to crisis situations?

Tuning into societal discourse

The first course of action is to listen to the discourse from key influencers (politicians, humanitarian groups, etc.) and the public. Crises often emerge out of nowhere, making them difficult to plan for, making instant information key to crafting an effective response.

Digital listening is an incredibly useful tool for this (tracking online content and conversation), as it can encapsulate all opinions and topics of discussion, which can then be filtered through to understand what’s happening and what relevance it has to the brand.

Once all the relevant information has been understood, then brands can work on how to issue a response that reflects the stance the business will take.

Respond firmly and decisively when possible

Based on the findings from the Ukraine study, it’s obvious that speed of response increases the chance of a business being looked on favourably by the public. Swift responses that reflect the stance and values of the business don’t just incite positive reception from the public and the media, but also boost the chance of the response being perceived as genuine.

Based on the data from the Ukraine study, Sensu found that the brands that failed to do this were perceived as simply following the herd for fear of criticism, rather than acting out of genuine concern.

Those with the lowest approval rating were either slow to react, closely associated with the Russian state or (in the public’s view) had put business need ahead of humanitarian matters.

Conclusion

So how can a business best prepare for its next reputation test?

Effective leaders don’t wait for a crisis to occur to define their values and priorities. Increasingly, businesses are expected to hold clear social values that guide everything they do. Whether that is a commitment to fairness, protecting the environment or avoiding causing harm.

These values need to be embedded within the business and consistently applied. In so doing, the judgement calls when issues such as the war in Ukraine arise should be clear, easier to communicate and seem consistent to outside observers.

In forming these values, listening to stakeholders (both internal and external) is vital. Understanding the expectations placed on a business by consumers and partners and evolving a position on social issues that reflects a shared consensus.

This promotes honesty and transparency, traits sought after and appreciated by the public, employees and other key stakeholders.

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