Thought piece

The world is a risky place for companies. Nowadays, it’s not just the ‘old-fashioned’ business risks like product recalls or environmental issues that Boards need to deal with as part of their reputation risk strategy. These days cyber-crime, data breaches, fake news and the ‘guilt by association’ of poor programmatic advertising are helping to establish a new litany of issues to be placed on corporate risk registers.

However, I couldn’t help but think there is one age-old risk that is the driving force behind three of the most impactful reputation-harming events of the past months. I’m talking about Uber, Bell Pottinger and Ryanair. And my firm belief is corporate hubris is at the heart of all three events.

The misplaced over-confidence of Uber’s approach to the renewal of its London licence is astounding given the circumstances. After months of corporate upheaval, with allegations of institutional sexism, the departure of its CEO and numerous question marks around its approach to regulation and employment practices, surely someone within Uber must have considered the possibility that the upcoming licence negotiations with TfL needed a different, more conciliatory approach? And if they did, this view seems to have been dismissed, trumped by the aggressive corporate culture for which the company is known. Only now is Uber adapting its stance, recognising that change needs to happen. But presumably, this crisis, the damage to Uber’s reputation and the time, money and resources spent on the regulatory battle could have been avoided if more measured tones or collaborative actions had been used in the first place.

Hubris is also writ large over the entirely avoidable demise of Bell Pottinger. Given the agency’s history of dealing – or possibly getting away - with clients so dubious no other PR agency would contemplate working for, maybe Oakbay Capital and its juicy monthly retainer meant there was a feeling of infallibility among Bell Pottinger’s senior management that a racially devise campaign could get results unimpinged by corporate oversight, common sense or morality. I’m sure there is more of this story to be told, but where were the dissenting voices cautioning against such an obviously wrong campaign?

Corporately, Ryanair has been built on the cult of one man’s personality, the force of nature that is Michael O’Leary. In recent years, his supreme confidence in low-cost fares to the exclusion of any customer service ethic led to declining profits. Yet since O’Leary’s epiphany in 2015 that “being nice was good for business”, things had been looking up for the company. But Ryanair’s lack of support for customers left without flights following its mass cancellation of routes demonstrates that old habits die hard.

What can we learn from these examples? I believe a much greater role needs to be played by senior management teams in allowing questioning voices to be heard. For some organisations, this means an uncomfortable cultural shift to include opinions that many may not wish to tolerate. But this strategy shows a greater degree of maturity, humility and consideration than simply acting on the orders of one belief that could cause significant reputational damage.

More fundamentally, all three of these examples seem to be very distanced from understanding and aligning with the expectations of all major stakeholders, as opposed to one audience alone. Uber prioritised customers rather than balancing this with the needs of an equally important stakeholder in the shape of the regulator. Ryanair focused on shareholder return rather than customer service. Bell Pottinger sought only to satisfy its high-paying clients rather than looking to its own reputation.

The role of data-driven reputation insight needs to be placed front and centre when considering these decisions, all of which could be seen to have profound reputational implications regardless of the course of action.

The solutions are there to avoid the consequences of corporate hubris. Yet the paradox is those most in need of these solutions are often those most blind to that necessity.