Everyday life reveals it, and executives and companies feel it: we are in a world of crisis. Frequent and disruptive problems have become a fundamental and relentless part of the current business landscape—exacerbated by growing pressure for immediate action on social issues and consumer demands for transparency.
No company is immune to current pressures
As an affiliate of Edeman in Portugal, EDC has access to the Edelman Connected Crisis 2022 study, which reveals how companies are feeling this growing pressure to manage core business issues and respond to broader events in society. From issues related to climate change, mental health, equality, and geopolitics, the majority of the public tells us that they consider it very important or essential for companies to respond to these challenges—and executives are concerned about the impact these issues may have on both operations and reputation.
Furthermore, there are no clear boundaries to the issues companies must respond to. Edelman’s study reveals that there is no difference between the proportion of executives who say their company is facing increasing pressure to respond to issues related to the company and those who say the same about issues not directly related to the company. No brand or company is immune to current pressures – in their own country or around the world.
As always, how companies respond to these pressures remains a matter of analysis. Companies cannot and should not respond to every issue, but their decisions must be informed by data, a deep understanding of their audiences, and a coherent decision-making framework—not just instinct.
Companies must adapt to stakeholder expectations in times of crisis
Longstanding studies on trust show that trusted entities are not immune to crises—no company is—but trusted companies are much more resilient to crises, experiencing shorter and less damaging crisis life cycles. Today, trust capital is perhaps a company’s best insurance policy against crises, risks, and disruptions.
Edelman’s latest study, however, takes a closer look and explores the key drivers of trust in times of crisis—and what companies can do to better maintain or rebuild their trust capital. Importantly, the study found a misalignment between the behaviors companies think they should demonstrate in times of crisis and what the public expects: integrity (honesty) and reliability (delivering on promises).
While there are some fundamentals of crisis management that transcend generations or social change—for example, being timely and transparent—executives need to adapt the approach they have hitherto considered correct. In times of crisis, companies must act with relentless honesty and demonstrate their willingness to deliver on their commitments. The only way to do this correctly is to develop a deep understanding of stakeholder expectations and act accordingly. Those who fail to do so will lose loyalty and customers.
Crisis management: the fastest-growing area of responsibility for CMOs/CCOs
Given this scenario, it is not surprising that one in two CMOs/CCOs say that their crisis management responsibilities have increased in importance over the past five years. Crisis management is the fastest-growing area of responsibility for CCOs; and it is one of the fastest-growing areas for CMOs, alongside investment in diversity and inclusion and labor relations—a surprising finding, given that crisis management has not traditionally been an essential part of the CMO role.
However, it is concerning that 60% of this group say they do not have the right skills in their teams to manage the wide range of issues and crises they currently face.
In fact, the entire company needs to come together to build resilience in times of crisis. The wide range of issues that companies must now manage across borders requires subject matter expertise and a deep understanding of local nuances. Those companies that do so will improve their ability to manage in today’s chaotic crisis landscape. Those that do not will face increased risk in the coming years.
You can consult Edelman’s study here. Want to learn more about crisis management and prepare your company for the challenges it poses? Get in touch and find out more about our work in this area.
