Coronavirus has created a high-stakes moment for companies and their reputations

April 8, 2020

Article originally published in The Globe and Mail

By Dennis Matthews

Dennis Matthews is a conservative strategist and commentator who is a vice-president at the national communications firm Enterprise Canada.

We’re living in an era where heroes and villains are instantly made, and people are swiftly cast as leaders or bumblers – and this was even before the novel coronavirus changed the way we live. Our news cycles and attention spans, quickened by social media, have become even more short-lived, with everybody at home scrolling their phones for the latest news while physically distancing from everyone else.

During this pandemic, we’ve seen public-health professionals become household names. We’ve seen once-unpopular politicians earn plaudits for showing strong leadership, and we’ve seen others have their legacies rewritten – their reputations rising and falling as quickly as people sort out what matters to us now.

We’ve also seen businesses, big and small, take on leadership roles in our communities. Canada Goose has shifted its production to medical gear, Shopify has launched remarkable small-business support programs, and Labatt has begun manufacturing hand sanitizer – all without government order or decree. Local restaurants are delivering meals to front-line healthcare workers, while auto-part manufacturers move heaven and earth to make ventilators.

But while a sense of Canadian spirit has animated most of our corporate landscape, some companies have suffered damaging embarrassments, too. Those black marks will survive this pandemic.

It’s all highlighted a high-stakes moment for corporate reputation – what the public, customers, clients, and employees think about a given brand. Such reputations take years to build, but only a minute to destroy, and that’s especially true now.

Consumers have increasingly looked to see their personal values represented when they spend their hard-earned money. That mentality has only grown, because personal sensitivities have been inflamed by this personal crisis. Indeed, the last time the country went through such an upheaval was the 2008 global economic crisis, but that was about businesses and markets, with people affected as a result; now, it’s individuals and families who are facing the direct brunt, and the economic devastation is a consequence of that. Indeed, last week, a global study by public-relations giant Edelman found that 65 per cent of consumers say a brand’s response to the pandemic will have a “huge impact” on their likelihood to buy their products.

Kindness can also help create customer empathy too, as companies navigate through uncharted waters. While WestJet was forced to layoff 7,000 employees in March, CEO Ed Sims was honest and compassionate in laying out the steps the airline was taking to survive. It served as a reminder that these days, the best marketing you can do is treating your employees as well as you can.

But while successful companies have led with empathy and have worked to be good corporate citizens, others have made missteps, prompting social-media storms. The Calgary Flames announced plans to cancel shifts for minimum-wage Saddledome staff as the NHL shuttered the season, but they were forced to backtrack. In Toronto, high-end grocery-store chain Pusateri’s faced accusations of price-gouging from consumers – not to mention Ontario Premier Doug Ford – for charging $30 dollars for one container of Lysol wipes.

Corporations have a long history of getting that human element wrong. Perhaps the most famous case in recent memory is Tony Hayward, former chief executive of energy company BP, who made an unforgettable, on-camera remark about wanting his life back during the Deep Water Horizon oil-spill disaster, which unleashed an estimated 4.9 million barrels into the water. Between the spill and the media blunder, it’s taken BP years to repair their reputation.

No executive wants to appear out of touch. That’s partly why every company you’ve ever purchased anything from has e-mailed you about their COVID-19 response – whether you asked for it or not. Yet the companies who are really getting noticed – and who will likely reap the long-term reputational benefits – are the ones taking real action.

Facebook’s donation of 720,000 masks to health-care professionals, and the move by McDonald’s and Tim Hortons to provide free coffee to health-care workers, won’t be forgotten any time soon. The pitch-perfect response by Loblaws CEO Galen Weston, communicating regular updates to changes to the shopping experience, and Sobeys’s early effort to launch a “hero pay” program by giving a bonus to front-line workers, will help keep grocery shoppers loyal.

When this pandemic is all over, consumers will be making new choices about how they travel, shop, work, and conduct their daily lives in a transformed economy. As these choices are made, it’s the corporate reputation of businesses across the country that will be foundational. And there will be long memories for how companies behaved and treated people during this crisis. Those who understand that will make it through stronger than ever.

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