Occasionally two words appear so often together that they are used interchangeably. This has been the case with 'brand' and 'reputation'. They are two sides of a coin. They complement each other. But they are not the same thing. At critical points in a company's history, conflating the two can be distracting and counter-productive to the burning task at hand. Branding is about creating endearing narratives. The objective of these stories is to create and sustain desirable perceptions about products, services, institutions, people and practices. While the traditional media remains important for the transmission of these narratives, new social channels have sprung up to usurp their monopoly. Here, we are not referring simply to the technologies but to the removal of the barriers of intermediation and control over the means of mass distribution of information. The result has been a revolutionary reversal of roles between the brand creators as monopolists of the narrative, and the public at the receiving end. It used to be that listeners gathered around the corporate story-teller. Whether they agreed or not, was unimportant since the channels for the dissemination of dissenting or alternate views were not accessible to them. Today, the ubiquity of social media has changed all that forever. Counter- or guerrilla narratives can spread very quickly to receptive audiences. The unique reputational networks fostered by social media have created standby audiences for such views and opinions. The implications of these opportunistic guerrilla narratives for a public company facing a crisis is that its efforts at restoring its battered reputation with cosmetic image-laundering will fail woefully in the competition with alternative narratives which expose failures that run much deeper in the organization. In this post, using Wema Bank as our study, we show the steps that companies faced with a crisis need to take to restore confidence in their reputation.
Difficult as last year was for many banks, it was a double punch for Wema Bank, a first-generation Nigerian bank, which opened for business as Agbonmagbe Bank in 1945. In 2008, shareholders and customers watched the disturbing events at the financial institution with grave concern. As allegations and counter-allegations of fraud, executive management malfeasance, board room vendatta, staff victimization, loss of market share, decline in the deposit base growth rate, the suspension of its group managing director (GMD) and appointment of an interim board, rumours of a looming takeover, unauthorized transfers of stock, and dismal corporate governance filled the news, many openly questioned if the bank could recover from the traumatic experience to regain its place in the premier league of local banks. At no other time in the bank’s 60-year history had it been confronted with a heavier burden of proof about its commitment to its founding mission and the sustainability of its franchise as an independent provider of financial services. In the circumstances, assurance, not ambiance should have been the focus of the newly appointed Wema Bank board.
In a September 2008 article with the seemingly innocuous title, ’Task Before the New Brand Manager at Wema Bank’, the writer, whose identity was not given, commended the new management led by Lai Alabi on its announcement that it would focus its attention on the rebranding of the bank. At the time, Wema Bank, one of Nigeria’s old generation banks, was going through a public spat among its board members, major shareholders and regulatory authorities, notably the Central Bank. According to the writer,
The new helmsman at the bank, Mr. Mahmoud Lai Alabi, must be a good student of rebranding and repositioning, for he has said on assumption of office that Wema Bank has started a rebranding program across the whole country.
While Lai Alabi, a highly regarded banker, listed other executive management priorities, including IT investment, deposit growth and deepening the equity base, the focus here will be on the value of branding efforts for organizations facing crisis situations like Wema Bank did at the time.
To understand the reasons why a new management was installed at Wema Bank it is necessary to give a brief background about the bank. Wema Bank received its banking license as Agbonmagbe Bank in 1945. It started operations in the same year making it the oldest indigenous bank in the country. Only First Bank, the former Standard Bank of West Africa, and Union Bank, the former Barclays Bank, are older.
Until a few years ago, Wema Bank’s ownership was in the hands of the state governments of the southwest region under the Odu’a Group. This government ownership sheltered the bank from the excessive pressures of competition. It also allowed the bank to offer loans to neglected groups like farmers and small business-owners which ensured that it remained close and relevant to its owners’ core constituencies. Critics claim that its government ownership resulted in lax loan conditions for politically connected businesses and initiatives, which over time had led to deep write-offs and a heavy bad loan book. In fact, the bank’s governance structure meant that political expediency often had to be taken into consideration when credit approvals or reviews were made.
In October 2005, Adebisi Omoyeni was recalled from his brief stint as deputy governor of Ekiti State, to assume the GMD position. Prior to his political appointment, Omoyeni had spent six years as an executive director of the bank. Although his tenure at the bank would last less than two years, it opened a Pandora’s box of intrigues, scandals and allegations of intimidation and accusations of cover-up. The most searing charges were that Omoyeni had used improper means to get an approval of N450 million as housing loan, stalled access to the bank’s books by Central Bank examiners and oversaw the sale of Odu’a Group shares in opaque transactions. The Odu’a Group had been compelled to reduce its ownership from 40% to less than 10% (9.8%).
It was under these circumstances that the Central Bank ordered Omoyeni to proceed on compulsory leave and appointed John Aboh as acting GMD in January 2008. Nine months later, when it seemed that swords had been sheathed, Omoyeni was permitted to resume office. However, the truce would not last. Less than 24 hours after resumption, he was given the final boot by the banking regulator. This time, Lai Alabi was named as the GMD.
The rebranding of Wema Bank which had experienced a hiatus is back on track and our branches are now properly and sufficiently branded whilst the new architectural branding type is already reflected in some of our branches. Needless to say this is an ongoing process.
It is odd that the new helmsman did not spend time interrogating the customer and investor perceptions of the bank, or put differently, its reputation among its key stakeholders, before announcing the continuation of the bank’s branding project. For months prior to his appointment, customers, investors and market commentators expressed their concerns for the bank on Nigerian internet forums, notably StockMarketNigeria.com and Nairaland.com, blogs and newspapers. Pointedly, not a single post was about anything related to its brand, as defined by marketing oriented narratives or symbols. They were all focused on the the status of their investment and savings, collapse of governance and agency perversion at the bank.
One then asks, why would Alabi include the rebranding project on his priority list without speaking of the need for a sober interrogation of the values of the institution, and its reputation among key stakeholders? Perhaps, it stems from the common mistaken identity between the two. According to Elliot Schreiber,
Brand management should be focused on identifying the values and attributes of the organization that resonate with key stakeholders. Reputation management, which communications professionals often refer to as ‘being known for doing good’, suggests correctly that reputation is a derivative of actions by the organization that are relevant with key stakeholders. In other words, reputation is a vote by stakeholders that the brand attributes are important and relevant to the stakeholder.
If reputation management is not linked to brand management, one risks trying to build reputation through corporate responsibility programs, which although important are tactics, not strategies. The only way external communications programs can work is if they are supported by the actions of the company, and that means that the company must have the values, be able to deliver consistently on its desired attributes, and be able to build relationships with its stakeholders.
On the other side of the wrong perceptions of brand and reputation management are those advertising and brand professionals who think that brand is related to logo, design changes or slogans alone. Those are simply symbols that should help illuminate and help build associations for the brand. But, we should always recognize that when we talk about building a brand or changing a brand, we are talking about identifying attributes and linking actions with communications. Both the PR and design perspectives often minimize the importance of linking the concepts of brand and reputation.
To Schreiber’s argument, we would like to further add that the corporate brand(s) can never supersede the corporate reputation. However, at certain points in the company’s history, the reputation of the company can come into sharp relief, relegating the brand(s) to minor significance. Crisis events are just that because they put to question everything the company has stood for and what its value proposition represents.
Clearly, what Wema Bank was faced with was an erosion of its reputation as a result of governance failures, disregard for shareholder interests and malfeasance at the highest levels of the bank. In simple language, the bank had a deep ethical problem, which stemmed from the mismatch between the obligations of its former leadership to key stakeholders, and their performance of same. These are what came to the top of the public mind when Wema Bank was mentioned. In such circumstances, any investment in rebranding would be tantamount to putting the cart before the horse.
Richard Etenson and Jonathan Knowles of MIT in a paper, ‘Don’t Confuse Reputation with Brand’, shed more light on the relationship between the two and their differences.
How does all this tie up with the changes in the control of the corporate identity narrative broadcast as a result of social media? We show how:
The internet and search engines in particular make it is just as easy for anyone researching information on the bank to get the company’s point of view as it is to get other commentators views. Sometimes, these commentators will have an opposing view.
These other commentators are very vocal, and because they do not have disclosure restrictions, they can and will delve into sensitive areas where the company’s typical response would be ‘No comment’.
The social web is built on reputational networks that these commentators have built up over a long period of time. On the contrary, it is only after a crisis has blown open that the company will make hasty plans to gatecrash these networks, with limited success at best, but often dismal results.
It is not unusual to find very knowledgeable commentators among those covering the company. Sometimes, they are insiders at the company with a motive to expose certain things, or they receive information from insiders.
These vigilante commentators and their audience will quickly point out any inconsistencies and contradictions between what the company tries to communicate with its brand identity as marketing narrative and its reputation aspirations.
The wide use of the internet for news and company research among investors today means that the line between the traditional media and these commentators is becoming increasingly irrelevant.
The internet will keep a publicly accessible record. These comments and questions will not be swallowed up in the dark anonymity of the Suggestion Box or other half-hearted nods to town-hall debate.
Without underestimating the enormity of the tasks Alabi faced on resumption, this is how he should have handled the identity priority. Examples are liberally taken from the experience of Tyco, the US conglomerate, which went through the same reputational damage when the malfeasance of L. Dennis Kozlowski, its former CEO, was exposed.
Recognize that the bank’s primary problem with key stakeholders was not a marketing one, but a reputational one.
Develop and implement a cogent communications strategy targeted at addressing the concerns and questions of its key stakeholder groups. This communications strategy must have an active online component, which is where so many guerrilla narratives are taking place. Specifically, the bank must decide all types of legitimate information that a researcher on their recent crisis may be interested in and make these available on the website. This will likely require the speedy development of a new website that pushes out messages of the changes going on at the bank. Three key sections of the new site will be Corporate Governance, Investor Relations and Media.
In line with the above, the bank would also need to appoint an officer responsible for finding, tracking and responding to discussions about the company online as well as developing a clear online community conversations guideline on employee participation in discussions, posts and articles about the company. Since the bank will hardly have experience in this area, it will need to seek assistance from external resources. It is not simply about posting press releases or positive news stories on these sites. This approach will backfire.
Publicly admit that the bank, in spite of its lofty past achievements, had lost its bearing at a point and needed to find its way back. This is exactly what Edward Breen, the new Tyco CEO went ahead to do.
Publicly identity those responsible for the scandals at the bank and what the bank intends to do about recovering misappropriated assets. This is exactly what Tyco did when it issued a press statement on the legal case it had prepared against L. Dennis Kozlowski, its former CEO, for abuse of office.
Publicly state the goals and responsibilities of the new Wema Bank management to each of the key stakeholder groups (customers, employees and investors). Edward Breen’s letter to Tyco employees is a banner example of the right tone to adopt in this message.
Announce the commencement of a comprehensive corporate governance review at the bank, and the appointment of a senior officer responsible to the board. A good example of a company that did this is Tyco. When Edward Breen was named as CEO of the the US conglomerate after the resignation of Dennis Kozlowski he named Eric Pillmore as senior vice president of corporate governance. Among the initiatives Pillmore introduced were processes for ensuring that an ethical culture was entrenched, as well as clear guidelines for avoiding a repeat of the abuse of office scandals under the former CEO. He was also responsible for developing an ethical guide for employees of Tyco.
Recognize the need for a proactive investor relations program. Appoint a senior and experienced professional to that role. Develop a investor relations strategy to match the company’s long-term financing needs.
Set clear targets for which the Wema Bank board bank would be held accountable. For instance, the conclusion of the audit and publication of annual reports at the end of financial year, quarterly reporting and regular analyst meetings to provide greater meetings to provide greater transparency about its operations and plans.
Stress and stress again, that the bank has turned a new chapter. This message should be carried on to employees of the bank, who will be the missionaries of the reputation transformation. The new management must show in words and in deed that it will have zero tolerance for any acts that are contrary to the New Wema Bank.
Regular coverage in the traditional media via interviews and articles on what the bank is doing to fix its past problems, as well as achievements in that regard. In particular, videos and radio interviews should be converted to FLV, MP4 and MP3 formats so that can be uploaded to video and audio sharing sites (YouTube, Viddler, BlipTV, Zoopy) and embedded across the web, including the bank’s website.
Through these steps, the bank can move any concerns or criticism to the terms of reference listed above. By quickly distinguishing between the Wema Bank of the past (pre-Alabi), and the New Wema Bank, the new management can shape the conversation around constructive exchanges on what it is doing to fix the bank, rather than what happened in the past.
Therefore, when bloggers, journalists or members of internet forums write about the past misdeeds at the bank, its communications people can rightly respond that the new leadership under Alabi are well aware of these issues and that the new leadership is working tirelessly to correct all of that; while stressing what the bank is doing to ensure that a new culture is entrenched top-to-bottom in the bank so that the abuses of the past never recur.
When these are done, then the bank can begin to speak of the continuation of the rebranding effort. For now, that is simply not what is called for. When the time for that comes, the brand would emphasize the New Wema, which is accountable, responsible, ethical and committed to fulfilling its pact with stakeholders. The emphasis would be less on the marketing message and more on the reputation conviction.
These are indeed trying times for Wema Bank. Still the challenge is not insurmountable. For an institution with such a proud and illustrious history, the task of regaining its pristine reputation is a must-do and it can be done.
One cannot help noticing how Niyi Meka Olowola, Oando's Head of Corp Comms, is nodding in approval. Maybe Goldman Sachs can learn lessons.04:47:49 PM January 25, 2012from HootSuite
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