Following the media recently, it seems to have been impossible to ignore, the negative stories about the banking industry, it seems as though the public have lost the little trust which they had in the banks, with Barclays’ reputation in particular being left in a bad state of disrepair, thanks to the LIBOR (London Interbank Offered Rate) scandal.
Barclays appear to have mishandled much of the crisis. This is atleast in part due to Barclays’ use of a “closed” approach to communications, with non-disclosure seemingly being made a priority. Such handling of the crisis is likely to have a serious negative effect on the bank’s reputation and in turn its bottom line. In addition, such an approach is likely to alienate the media and public. A more open approach should have been utilised.
A more open approach would have been more suitable, with an open line of communication between the organisation’s spokespeople and the media. Either the Chairman, CEO or COO should have appeared on the major television news channels, this would have given them the opportunity to lay the facts as they were at the time, while establishing themselves as the authoritative source of information.
Barclays should have focused its communication on explaining how the organisation felt about the crisis and its impact, perhaps some sympathy? Then the key message would have been to outline what actions they would be taking to remedy the situation. This should have also been backed up by a strategic operational and communications action plan.
Organisations should not take a risk with potential issues and crises, as this could leave their reputation and bottom line in ruins. A proactive approach must be taken. Such an approach allows for effective communications, operational planning and an organisation which is better prepared for crises.
— DS —
Motorola Mobility is one of the few brands that frustrates me, with such history, such successful brands in the past and such stories to tell and yet it seems to fail to get people excited about much of what it does. Due to this failure Motorola Mobility is currently being eaten up by its competition.
What can they do about this? Well there are four key aspects of their business they need to take care of, these are their advertising, marketing, public relations and business strategy.
Motorola Mobility must embrace their history, look at their past successes and then look towards establishing themselves as future thought leaders. Thought leadership is something that must be achieved if they wish to gain a stronger position in the mobile (cell) phone market and build a strong reputation. The key to being a thought leader is the ability to look ahead, gaze into the crystal ball, recognise upcoming trends, while anticipating threats and opportunities.
As you’re reading this, do you know that Neil Armstrong’s famous first words on the moon were communicated through a Motorola transceiver? and that they created the first truly rectangular colour television, which eventually became the industry standard?
These are all factors that must be embraced and used by Motorola Mobility (MM) when planning their advertising, marketing and PR activity.
Their business strategy must change. Cutting out under-performing products and replacing them with more business orientated products, the old Blackberry professional audience is becoming disillusioned with them. Blackberry’s threat is MM’s opportunity.
— DS —
There seems to be a common misunderstanding among people about the nature of journalism and public relations. It seems as though journalists are often being viewed as purveyors of truth, where PR practitioners don’t care too much about truth. This is a vast misconception.
In fact both sides often have their own agenda. Whether it is a newspaper trying to portray a political party or organisation in a certain light, or the PR practitioner trying to portray their client in the best light possible, the individual agendas are there. However it is up to the practitioner/organisation to identify where the agendas overlap and tailor the story/pitch/press release in recognition of any overlap, so that they may effectively put across their point of view. Below is a diagram which only gives a rough idea of how little the agendas of journalism and PR actually overlap.
I’ll leave you with a parting thought.
“Damn the torpedoes! Four bells. Captain Drayton, go ahead! Jouett, full speed!”
David Farragut, 1801-1870
—- DS —-
As my first post here I have decided to discuss the financial services industry, the downfall of its reputation and a discussion on the topic of bank executive remuneration. This is an issue which has received wide coverage in the print, broadcast, online news and the blogosphere. With the High Pay Commission calling for greater transparency in the setting of executive pay and for employees to sit in on remuneration committees. Excessive executive pay is just another reason why some may feel that they are getting robbed by the bank.
The reputation of financial services appears to have been in free fall in the last few years. With various institutions being adversely affected. Some examples of contributors to the free fall include prosecutions for mis-selling of financial products, pressure from the public, shareholder groups, the government and the media over executive pay particularly where executives were rewarded despite making losses. The industry bore the brunt of the blame over the recession in the UK and globally, a lack of transparency and clarity. It is easy for those in the financial services industry to simply argue that this is all merely anti-capitalist sentiment and turn a blind eye while their reputations slowly crumble.
The financial services industry must take more responsibility over the remuneration of executives, by for example not giving bonuses to executives who under performed or expose the institution to dangerously high risk. Disproportionate levels of remuneration for executives benefit no one other than those executives. The justifications for these levels of remuneration tend to be either that the executive performs better as a result and/ or there is a high risk that the executive may leave the institution. I can’t help but wander whether they want executives who who only care about their pay and don’t care about the company, as they are willing to leave if not paid the same or higher remuneration as the previous year.
I suggest that the financial services industry puts an increased focus upon corporate citizenship, CSR and philanthropic activity. This could involve investment in local communities, helping some of those who are not as financially fortunate, but nonetheless industrious. I would also suggest taking measures to educate the public about banking, why it’s done, how it’s done and how it benefits shareholders, customers and the wider society. They must drive the idea that the financial services industry is the oil that drives the engine of growth.
Additionally, banks need to begin rewarding savers. Currently they are putting money in the banks but not actually getting a good return on their investment. The banks are not lending enough to business. This all makes the industry look as though they are simply hoarding its customers money, thus resulting in an unbalanced relationship between the bank and the customer.
Unfortunately there is the possibility that the banking industry may remain to some extent unpopular whatever happens, as they look after the world’s finances. This naturally makes it one of the most scrutinised and criticised industries in the world.
I’ll leave you with a parting thought for now.
“A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove…but the world may be different because I was important in the life of a child”Forest E Witcraft