Leadership Errors Can Only Compound Technical Mistakes
Your institution’s reputation is one of its most valuable, hard-earned assets. It’s like a savings account. Make deposits of goodwill and good behavior – some small, some large – and eventually you’ve got a healthy account.
But a few wrong moves, and that account can dwindle quickly. Once you’ve lost the public’s trust, it’s tough to get back.
Just ask Equifax.
Like so many crises, Equifax’s started as an operational malfunction. A data breach affected more than 145 million people. In the game of reputation management, that’s like getting pinned against your own goal-line. Making up the lost ground is difficult. But it’s not impossible.
“A crisis is a terrible thing to waste,” says the business author Jim Collins. Nobody wants to be in the spotlight for the wrong reasons. But once that light is on, the public is watching. They’re watching to see how you react – how quickly and effectively you can solve problems; how prompt and accessible you are to your stakeholders’ concerns; whether you own up to the mistake; and what you’ll do to make it right.
Typically, the public is willing to forgive an honest mistake. That is, if the organization owns the mistake, vows to fix it, and then follows suit. But that’s where Equifax fumbled. And then fumbled again, and again.
By now, the errors are well documented: The delay in informing the public. The faulty website where consumers were directed to see if they were impacted. The accusations of Equifax profiting while protecting consumers from the error. The reports of executives selling stock during the time between when the breach was discovered and it became public.
As is often the case, it wasn’t solely a technical error that caused Equifax to lose the public’s trust. It’s how the company responded. Lapses in technical competence are what started the crisis. But lapses in leadership are what turned it into a full-blow reputation crisis.
Any company that deals with sensitive or confidential data is wise to take extreme measures to protect that information. The same can be said for a quick, credible response from the company’s leadership. When it comes to keeping the public’s trust, no response is too extreme.
Article contributed by Russ Florence, partner, president and chief operating officer at Schnake Turnbo Frank.
About the Author:
Russ Florence is a partner, president and chief operating officer at Schnake Turnbo Frank. With experience in journalism, corporate leadership and consulting, he brings a multi-faceted, balanced perspective to clients nationwide. Russ joined Schnake Turnbo Frank in 2001, and became a partner in 2007. Before joining the firm, Russ managed corporate communications for a $30 billion super-regional bank. Russ is a frequent speaker to universities, professional associations and business groups.
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