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After THE Crisis NEW RULES, OLD LESSONS


AFTER THE CRISIS NEW RULES, OLD LESSONS

WHAT DID WE LEARN FROM THE FINANCIAL CRISIS OF 2008 AND HOW WILL THE COMMUNICATIONS RECOVERY DIFFER THIS TIME AROUND?

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FLEISHMANHILLARD FISHBURN

COVID-19 is pressing reset on economies, societies, and businesses across the world. As business navigates this fast-changing world, to survive is one thing; to emerge stronger and more sustainable is quite another. Just over a decade ago the world faced another pivotal moment when the financial crash pushed economies, business and society to the brink. Ultimately, businesses pulled through that crisis – some with a better reputation than others. The dust will settle on CV-19 at some point, and as the recovery gathers pace there will once again be winners and losers when it comes to corporate reputation. That is not to say that this is a zero-sum game; all brands can enhance their reputation if they act with compassion and authenticity. In the following pages, experts from across our business share their thoughts on the communications challenges and opportunities

corporates face today, and how the recovery from CV-19 demands a different approach from the one the business world adopted more than a decade ago. As part of this we focus on five key trends we have identified since the outbreak of the pandemic and discuss the implications these have on communications strategies as we rebound from the crisis.

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AFTER THE CRISIS NEW RULES, OLD LESSONS

Purpose or profit CV-19 poses some monumental challenges for companies the world over in the months to come, as attention is turned to rebound and recovery. But as the UK economy – like many others around the world – stands on the edge of the worst recession in 300 years, companies would be forgiven for naturally focussing on activity that secures quick commercial gains to compensate for loss of revenue during lockdown. One of the biggest challenges in the coming months will be striking a balance between short-term commercial needs and a longterm view of corporate purpose; in contrast to the lean years that followed the financial crash of 2008, purpose is now far more embedded in company culture. 4


FLEISHMANHILLARD FISHBURN

ts? Post 2008, corporates tended to focus on remodelling, regulation and governance, as brands prioritised commercial gain. While CSR had started to become a focus for corporates, these initiatives became one of the early casualties of the need to trim expenses and were either cut entirely or rolled into internal communications. As Managing Director of Corporate, Stephanie Bailey, recalls, “a large multi-national bank significantly scaled back a £50m environmental project as their priorities were forced to change due to the immediate business critical impact of the sub-prime crisis. The swirl of discussions around the economic downturn meant that focus had completely changed, and the impetus was purely on recovery.” At the time purpose as a concept wasn’t discussed or considered and there was almost no focus on a company’s core values. Consequently, recovery spend went to commercial operations and the role for communications was to drive sales.

“Corporate reputation was only a priority when it stood to have an impact on the former” says John Gisborne, Chair of Healthcare. In the immediate years that followed, purpose started to come to the fore as brands became more accountable. Brand behaviour was placed firmly under the spotlight, and consumer awareness grew to new levels. In some sectors it sparked the rise of consumer champions, who have continued to manifest in both volume and power ever since. “You had shareholders ousting management teams, which was previously rare, and made the c-suite much keener to articulate their vision of a brand’s social utility and purpose, making corporate communications a strategically vital function. In addition, shareholders -previously quiet – realised that a brand with weak values was not only a danger to society, but also to itself.” recalls Niki Webb, Chief Executive Officer, from our sister content marketing agency, Specialist. Since then, purpose has not only become valued by shareholders and customers, but also expected. In more recent years, a focus on company purpose has not only driven reputation amongst stakeholder groups but also delivered an impact on annual revenues. 90% of purpose-driven companies deliver growth and profit above an industry average, with a positive reputation accounting for as much as 7.5% of annual revenue1.

1 Harvard Business Review, Why are we here? Sally Blount & Paul Leinwand, Nov – Dec 2019

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AFTER THE CRISIS NEW RULES, OLD LESSONS

As Holly Rouse, Director and Head of Purpose comments: “Purpose is guiding the actions of many companies and seeing them think about more than just themselves in a way we’ve not necessarily seen in the past. This has translated into how companies over the last decade have communicated and marketed themselves with Purpose the driving force towards company relevance and recognition.”

According to Nick Andrews, Head of EMEA Reputation, “You will have companies who lose out commercially in the short term, but do the right thing, and arguably, it is those companies who are reputation winners in the long run and who will ultimately recover the best. Those companies who tell that story well, showcasing their efforts, will move up the recovery curve more easily.”

Brands will once again tighten their belts, and some will opt for a more defensive strategy, with finance, HR and legal calling the shots. Unsurprisingly, top of the agenda will be a focus on performance and plugging the profit gap to deliver returns to shareholders, to show strength and resilience, improve market, employee and customer confidence, under the belief that this leads to quicker recovery.

Without doubt, there is a new set of expectations for brands, and purpose sits front and centre of this. Brand perceptions during the pandemic will create a lasting memory for stakeholders; investors will care more about ESG, employees will care more about how they were taken care of during the pandemic and how well Return to Work strategies are managed; and customers will carry a lasting judgement that carries through into purchasing behaviour.

But such a laser focus on commercial gain may inevitably come at the expense of a more purposeful strategy that not only delivers a stronger, more sustainable rebound, but also a more profitable one.

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FLEISHMANHILLARD FISHBURN

Indeed, FleishmanHillard’s recent study, COVID-19 Mindset: How the Global Pandemic is Shaping Consumer Attitudes and Behaviour, shows that the pandemic has changed the way we view the world. 69% of UK adults said it changed the way they view the UK, 65% said it changed the way they view companies as employers, and 59% said they expect changes to their buying behaviour to last beyond the pandemic. 42% even said they would make making their purchasing decisions based on how companies took care of employees during the crisis.

Demonstrating and communicating financial performance will naturally be key as we move forward into recovery and resurgence, but the companies that do so through a purpose lens are likely to be those that thrive longer term. Given the even closer correlation between company behaviour and consumer propensity to engage, companies need to not only be ready to examine (even reassess) their values and purpose, but also consider the role communications plays in telling those stories, cementing the message and securing brand advocacy.

69%

65%

59%

42%

said COVID-19 changed the way they view the UK

expect changes to their buying behaviour to last beyond the pandemic

said COVID-19 changed the way they view companies as employers

plan to make making their purchasing decisions based on how companies took care of employees during the crisis

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AFTER THE CRISIS NEW RULES, OLD LESSONS

THE POWER OF THE PERSONAL CAMPAIGNER DURING A PANDEMIC From nascent technology to a near universal communications tool, the changing role social media plays in our everyday lives represents one of the biggest shifts of the past decade. As well as transforming how corporates and consumers communicate, social channels have opened up platforms anyone can harness to become a personal campaigner.

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FLEISHMANHILLARD FISHBURN

Consumers are increasingly turning to social media as a source of news over the past few years, with Ofcom data showing 41% of people in the UK were relying on social platforms as their main online news source in 20192. Arguably the era of “fake news” has had a negative impact on consumer trust in online platforms, however, recent research from GWI suggests that in this period of crisis almost half (48%) of UK and US consumers report they are reading more news stories on social media in the past month3. The same is true of decision-makers as well. FleishmanHillard Fishburn proprietary research conducted prior to CV-19 found MPs consult Twitter and Facebook more than local media, constituency surgeries and even the BBC’s flagship Today programme4. Overlay this with the fact that the pandemic has also provided some consumers with another powerful asset – additional time to focus and engage – and the reality is corporates are facing levels of scrutiny that were relatively unheard of during the 2008 financial crash. While it may be tempting to suggest online activism is largely confined to campaigning groups such as Havas or 38 Degrees, the reality is platforms like Twitter has provided us all with the ability to start and drive a conversation. As Matt Park, Director of Social and Innovation remarks: “Social media has given consumers a stronger voice where wrongdoing will be publicised, and individual experiences amplified. The idea of an individual having much sway over a brand or organisation might have once seemed rare, but these days a crisis can often blossom from a single tweet or social mis-step, and setting this against a backdrop of a consumer audience hungry for content and conflict means bad news travels faster than ever. The old adage that reputation ‘arrives

on foot and leaves by horse’ could now more accurately observe that reputation now leaves in the time it takes to click retweet.” And increasingly many of us are putting our energy into activism. People-powered campaigns such as #clapfortheNHS and #captaintommoore have showcased this activism brought to life, while the launch of websites such as Did they help? , which tracks corporate behaviours in response to the epidemic, demonstrate that corporates are currently being held account to a level many have simply never experienced before. The reality is this crisis has created a unique advocacy space where traditional methods of influence have been temporarily suspended. Everyone, from the public to politicians, are getting information from their social media networks and online research. At the same time, the appetite for change is growing while decision-making hasn’t stopped and in many ways is accelerating. How corporates choose to engage and respond will be a defining factor in how they are perceived in the long term. As Stephanie Bailey, Managing Director of Corporate explains: “Right now, sitting on the sidelines is not an effective strategy – reputation and regulation are in flux. Organisations who sit this period out will return to find the ground has shifted beneath them, with a whole new set of expectations evolving without their input. Online activism is easier and more widespread than ever before, and this moment in time is nearly ideal for those looking to redefine the norm - you can count on your critics and competitors to occupy this space. Consider the opportunity to drive significant change right now, while your team works from home, through an integrated digital-first campaign.”

2 OFCOM Adults’ Media Use and Attitudes Report 2019 – 30 May 2019 3 https://blog.globalwebindex.com/trends/coronavirus-news-consumption-changing/

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AFTER THE CRISIS NEW RULES, OLD LESSONS

Since the outbreak of CV-19, we have seen war-time language from both government and media, discussing the ‘fight’ and ‘battle’ against the virus, labelling it the ‘invisible enemy’. As we learn more about this virus and how best to combat it, there continues to be an intangible ‘enemy’, with no clear allocation of blame.

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This is a significant distinction when comparisons are drawn between this crisis and the Financial Crisis of 2008. Banks were universally considered responsible for the collapse, and the sector still has an issue with trust. Liz Willder, Head of Financial Services, argues that the crash “bred wholesale distrust for the entire sector, which has effectively been a hangover in place ever since.” In light of this, we find ourselves in a blame vacuum – there is no clear sector, organisation or body to allocate responsibility. So, what implications does this have for brands today?


FLEISHMANHILLARD FISHBURN

In 2008, while the banks took the heat and were branded villains, other brands could hide behind their mistakes. Paul Haugen, EMEA Planning Director, described this phenomenon, saying “there was a ‘bad guy’ to pin it on who acted as a lightning rod for blame, giving organisations more of a free hand to make cuts and not be judged harshly. The extent of Financial Services’ bad behaviour effectively shielded other companies. This is not the case here.” Today, there is no one to hide behind and consumers are not distracted or paying attention to one particular sector or business. Everyone is vulnerable and accountable. In the same way that there is no clear villain, the victim narrative does not line up to 2008. In its non-discriminatory way, everyone is a victim of CV-19. There is no ‘them and us’, as everyone is suffering or struggling in some form. As Haugen continues, “there is a feeling that we are all in this together, and that everyone needs to watch one another’s backs.” These different positions of villain and victim have significant implications for a brands’ approach to communications during this time. Brands will be judged on how they behave during this crisis. Nick Andrews, Head of EMEA Reputation addresses this issue: “In 2008, the only people that needed reputation work really were Financial Services companies – both for general public, regulators and prospective employees. For many companies there was no need for any remedial communications work.” Ultimately, brands need to take more responsibility this time. As Dee O’Connell, Director of Insights, puts it, “there is no one to blame this time around, so brands need to tread cautiously. They need to be aware there is a blame vacuum, and one wrong slip could lead to blame.”

At the heart of this is that this crisis is because of a global pandemic, so the whole world is affected in some way. FleishmanHillard’s recent study, COVID-19 Mindset: How the Global Pandemic is Shaping Consumer Attitudes and Behaviour, found that 73% of respondents reporting that the CV-19 pandemic has changed how they feel about the world, which will have a lasting impact on consumer behavior after this crisis has passed. With these far-reaching and long-term implications becoming clearer, brands need to remember that most consumers are experiencing a mindset shift that will last long after this pandemic has passed. Consumers will remember the businesses who played victim and shied away from action, and the businesses who stepped up and took responsibility for the potential impact that they could have on the lives of key workers and their consumers. As Paul Haugen notes, “consumers are paying greater attention than ever before, and are more likely to vote with their wallets than ever before.” Decisions made now will leave a lasting impression, and will impact consumer spending, so now is the time to act. Successful brand communication during this time can build trust and long-term loyalty, so that when spending decisions are reevaluated in the future, consumers will remember the businesses who supported health services, employees and consumers where they could, rather than labelling themselves a victim. Those are the brands that will benefit from consumers ‘voting with their wallets’ in the future.

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AFTER THE CRISIS NEW RULES, OLD LESSONS

The need for

persua

The recovery from the CV-19 pandemic was never going to be black and white; it has become clear that it will be all but impossible to go from lockdown straight back to the lives we lead before the crisis began. Instead, it’s looking likely we’ll have to go through a series of ‘grey’ periods – times when it is difficult to be clear about what is the best way forward, when we may have to take a few steps back in order to go forward, and when we have to get people to do things they don’t want to do. To that end, communications is going to be critically important to the recovery.

As Nick Andrews, Head of EMEA Reputation at FleishmanHillard Fishburn, explains, “In many ways, the nature of this recovery is going to be all about communications, from the government down. We are moving from a largely instruction driven phase (you must stay indoors) to a persuasion phase (it is safe to go back to work if you adhere to these principles). The fact the government says the schools and shops are going to open, doesn’t mean people will be safe returning to those things.

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So, the ability of companies to return to business as usual both with employees and their customer base, will largely be driven by communications.” This situation is compounded by the fact that many lockdown behaviours have also now become entrenched, in a large part driven by the government’s relentless “stay home, save lives” messaging which has clearly served its purpose.


FLEISHMANHILLARD FISHBURN

asion Indeed, UK consumer behaviour and opinion may have changed permanently as a result of this crisis, with many saying that they are revaluating what, why and how they purchase. Employees are saying this too, with nearly half saying want new pandemic-imposed benefits to be made permanent.

Given this context, one of the biggest challenges that corporates will face will be persuading consumers and/or employees to return to some semblance of normality. Whether that be using their products and services or returning to work places, an appetite to do so in the face of huge obstacles related to safety, purpose and desire, will vary significantly between stakeholder groups. Specifically, it is going to be particularly difficult to manage the flow of communication effectively, from receiving evolving guidelines from the government, before working out what is relevant to your organisation, and then communicating that in an engaging and compelling way to all stakeholders. What’s more, there is no precedent or playbook for this explains Faith Howe, Head of Talent &

Transformation, and therefore organisations are going to be challenged to be nimble and creative: “This pandemic is rewriting the social contract between organisations and their stakeholders. It’s critical, therefore, that, as the pandemic continues to rapidly evolve, organisations remain alive to the corresponding changes in the needs of their stakeholders and the communications imperatives that they give rise to. This requires a delicate balancing act – looking ahead to and planning for the next challenge, even while responding to the diverse needs of today.” The recovery from this pandemic is going to require an understanding of people’s needs and desires and then striking a balance between meeting those needs and encouraging people to do things that they may not be inclined to do. The art of persuasion and communications is going to be central to this because any breakdown in communications during this crisis will unquestionably create challenges when it comes to motivating and mobilising these same people as organisations target recovery.

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AFTER THE CRISIS NEW RULES, OLD LESSONS

A big bang for reputations CV-19 will be a big bang for brands’ reputations; none will be the same as they were before. We have already seen the public celebrate heroic brands and castigate villains, and with the crisis set to continue for some time, few are likely to escape scrutiny. Eventually, normality will resume. As this gathers pace, those who are deemed to have acted dishonourably will face an existential challenge. Now more than ever brands need to define their purpose and demonstrate how they are serving the common good.

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FLEISHMANHILLARD FISHBURN

The recovery will provide those of us with an interest in purposeful business with a once in a lifetime A/B test. We believe that consumers have been increasingly making purchasing decisions with their conscience as much as their wallets for some time, and actively reward good behaviour while punishing wrongdoing. Although it is cynical to suggest that this belief is the only reason why purpose, values and stewardship now sit at the heart of almost every big business’ identity, it is certainly a principal reason why these topics are so popular in corporate marketing and communications. While it is possible that consumers could go back to brands that have behaved badly – they have done before – the stakes are altogether higher now. Firstly, few brands are irreplaceable, says Paul Haugen, EMEA Planning Director “one feature of the world today, which was not the case in previous crises, is that so many brands can be replaced by like-for-like competitors. I can only think of three companies who cannot be replaced, the rest have direct competitors who can do almost everything they can – particularly at the B2C level”. With more choice than ever before, and the means to access them via the internet, consumers are in a better place than ever to vote with their conscience. Secondly, consumers are far more likely to hear about the behaviour of a particular company. While business coverage used to be thinly spread across lots of different topics and subjects – the majority of which only ever affected one or two sectors or brands at a time – practically all reporting is now viewed through the lens of COVID.

Before COVID, brands would only potentially face one or two key issues on which they were judged at a time, which generally lay quite close to their operations and strategy. A retailer, for example, would be unlucky to be caught up in a storm affecting the banking sector. Now there is only one story in town that affects everyone, and any positive or negative story quickly falls under the media’s collective gaze. Thirdly, consumers have shown themselves to be very quick in this crisis to denigrate those who they see as not living up to their responsibilities. A number of brands have seen their reputations trashed on the back of actions ranging from being perceived as unnecessarily furloughing staff right through to profiteering. The speed and scale of this online-led action illustrates how much consumers care about this crisis; people believe that we are facing this threat collectively, and you are therefore either with us or against us. This isn’t just an issue affecting B2C businesses either. Corporates and SMEs will not rush to do business with those who have treated suppliers and partners badly, or desire to be associated with brands who have been castigated. While the unwritten rules between businesses are slightly different, the game is fundamentally the same. It is more important than ever that brands articulate and communicate a narrative of how they serve the society that has enabled them to prosper. Doing so could be the difference between a forgiving recovery, or no recovery at all.

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Conclusions

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Corporate communications is an essential component for all effective recovery strategies. Communications has a key role to play in Boardroom discussions, helping to rethink and refocus the brand message to apply to a post CV-19 world. A strategy with a reframed purpose embedded will secure a more sustainable recovery, enabling brands to demonstrate genuine value at a time when business actions mean more than words.

Companies will not be rewarded for taking a reactive stance during Covid-19. In the absence of engagement brands risks perceptions being shaped, often negatively, in the communications vacuum. Successful communication during this time can build trust and long-term loyalty, so no one can afford to take a reactive stance.

Communications is going to be central to this recovery. But companies need to quickly develop a strong understanding of the differing needs, views and desires that their stakeholders have developed during this period. Tailored audience insight will help shape effective internal and external communications strategies that secure brand advocacy and trust.

The power of social media to shape brand perceptions has never been more acute. Companies need to develop meaningful communications strategies that connect with all audiences in a world where individual consumers have the ability to shape long term reputation in a way that was once reserved for media and decision-makers.

The past decade has seen consumers increasingly make purchasing decisions with their hearts as well as their wallets. With CV-19 thrusting corporate behaviour into the spotlight in an almost unheralded fashion, those who fail to articulate purpose and social good run the risk of ruin. Brands cannot afford to be bad.


FLEISHMANHILLARD FISHBURN

KEEP IN TOUCH Our ongoing thought leadership and news can be found here: www.fhflondon.co.uk Please follow us on socials: LinkIn Twitter Instagram Please feel free to get in touch with any questions: Liz Willder Director | Corporate & Financial Liz.Willder@fhflondon.co.uk O +44-(0)208-618-1726 M +44-(0)776 6754

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Profile for FleishmanHillard UK

After the crisis: new rules, old lessons  

What did we learn from the financial crisis of 2008 and how will the communications recovery differ this time around?

After the crisis: new rules, old lessons  

What did we learn from the financial crisis of 2008 and how will the communications recovery differ this time around?

Profile for fhflondon
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