Those of us here from the UK will have vivid memories of Gerald Ratner. He was responsible for one of the biggest PR gaffes in UK corporate history. In 1991 Ratner was the Chairman of the largest jewellery chain in the world. With powerful brands like H. Samuel and Ernest Jones he was the undisputed ruler of the high street jewellery market. In April of that year, at an Institute of Directors Convention, Ratner stated that his stores 'Sold a pair of earrings for under a pound, which is cheaper than a prawn sandwich from Marks & Spencer, but probably wouldn't last as long'. He went on to describe a cheap sherry glass as 'total crap'. In ten minutes the reputation of the organisation, a reputation that had taken years to nurture, was in tatters. Consumer confidence collapsed and the company was driven to the verge of bankruptcy. Ratner resigned, hundreds of people lost their jobs, household brands disappeared and the firm renamed itself Signet. Contrast this with the reputation of Rudolph Giuliani, former mayor of New York, whose 'stock grew significantly in the aftermath of the tragic events of September 11. Prior to the terrorist attacks, the media and public had frequently vilified Giuliani for some of his policies. However, he emerged as an unexpected hero.- his leadership and communication skills, and ability to reassure a stricken people were admired throughout the world. These two very different scenarios demonstrate the importance of effective communication, particularly in maintaining or creating a positive reputation. As our insatiable appetite for more information is continually fuelled by the internet age and news on demand, the need for effective corporate communication has also grown significantly. Thus, all organisations face an increasing need to provide timely, consistent and accurate information, particularly in reaction to the media frenzy that prevails during a corporate crisis: faulty product recalls, environmental disasters, fraudulent directors, etc. Thankfully these are (still) rare. But every activity involves some form of risk; things will go wrong, incidents happen every day. Effective communication at all times is the key to maintaining a reputation that may have taken decades and a great deal of money to develop.
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