Public Relations Reputation Management Crisis Management

The Science of Crisis Communication: Proactive and Reactive Strategies

Crisis communication—typically a reactive and intense endeavour executed with anxiety and haste. You may find yourself in a situation where you haven't fully planned what to say, b...

Public Relations Reputation Management Financial Services Protect

Navigating Regulatory Waters: Friend or Food? How To Stay Ahead in Financial Services

The following content is part of our fortnightly newsletter eDMs "Take A Beat Thursday" and was originally sent out on February 8th. If you'd like to join the list and get these in...





At the end of the two-day Financial Services Council annual Summit in Melbourne a few things are painfully clear.

Firstly, there's no hiding from the brutal truth of poor conduct – nor from the damage it's done (or is about to do) to community trust in superannuation, life insurance, banking and financial planning. 

Secondly, no one in the industry is overtly trying to defend the indefensible any longer.

And finally, even though many in the industry are fixing the core issues, there's no blueprint for a collective initiative to restore trust.

Why not? In part because it's not yet over. With rounds of the Financial Services Royal Commission – and accompanying negative media – still to come, the industry is preoccupied: reacting, not planning. 

While we're reacting, we're not short circuiting the issue. But ending this part of the cycle of bloodletting, reform, and criticism, will take industry unity.

It's not a job that can be done by any one person, organisation, or even sector, alone.

Only truly collective action, from the finance sector as a united whole, will rebuild community trust.  

While individual banks, insurers, financial planning firms and super funds can fix their own underlying issues, trust will not follow unless the industry unites to restore its reputation.


A 3-point blueprint for reputation rebuild

Reputation is built or destroyed by actions. Specifically, the good or ill caused by those actions. The groundbreaking work of the Reputation Institute over the last two decades clearly shows that you are judged by what you do as a brand, industry, or country.

There's no simple solution to the problem of how the financial services industry goes forward from here. That said, there are some elements that will be essential to the work of rebuilding its reputation.

PwC asset and wealth management leader Chris Cummins yesterday suggested a three-step process for addressing the challenges facing the industry: to proactively identify issues and remediate them; to lead in policy change and reform; and lastly, to engage with a variety of stakeholders for better outcomes.

He's right, and his views were echoed widely (in different forms) by BT, the FSC, and many others.

The question I'm addressing – given what we do here at BlueChip – relates to the final point: how to engage stakeholders more effectively.


1. Shared value and shared values

Underpinning all actions are values: belief in, and commitment to, shared agreements to "do the right thing", and shared understanding about what “the right thing” is.

Shareholder value is no longer the single or even most important goal. Now, it's more appropriate to have a clear goal of creating shared value for consumers, investors, counterparties, and the community.

If we accept shared value as a principle, then we also need shared values.

As a banking and wealth management industry, we have no charter of shared values. Whether you call it a code of conduct, a set of ethical guidelines, or a charter, we need one now – ideally one that is both compulsory and across industry sectors. Why don't we have one? Probably in part because of the nightmarish scenario that competing industry parties working together to create one would entail.

Maybe the pain of staying the same is now great enough to outweigh the pain of this kind of change.

It may be a utopian ideal, but agreement on shared values among all the industry and professional bodies of substance would put a floor under both conduct and a reputation rebuild effort.

This would mean the ISA, FSC, ABA, ASFA, FPA, SMSFA, AIST, and others reaching agreement. 

As one senior commentator said "we're all tarred with the same brush". A shared set of values across industry sectors would underpin real change, and give the community tangible evidence that the industry can come together in consumers' best interests.


2. Paradigms, people and process: critics as best friend

Jim's Collins' oft-cited book Good to Great makes the point that great companies and leaders confront the brutal truth.

This means turning our face, collectively and unflinchingly, to the most unpleasant aspects of our industry and the most damaging or potentially damaging consequences of our actions. It also means asking critics – not fans, employees, clients, or those with a conflict of interest leading them to give falsely positives or overly favourable feedback.

How often do companies and leaders do this at all, let alone well?

Yet it's the perfect hedge against paradigm blindness.



I'd argue they don’t do it often, and even more rarely, do it systematically. Working with top- and mid-tier firms, I see plenty of 'pleasing response bias' – even when leaders seek unfiltered feedback. 

On an individual level, there's a whole lot of telling leaders what they want to hear. It might be habit, culture, or just that the Board and CEO don't push hard enough for the negatives or unpleasant feedback. Real candour is rarer than it could and should be. We risk our relationships each and every time we 'enter the danger' – so, to be fair, the responsibility sits more with leaders than with their teams to seek out and air the trickiest topics. 



On an organisational level, there's a similar gap. Few companies have systematic stakeholder feedback systems that deliberately seek views from their critics, from the outliers, or from former employees.

That now seems like a serious strategic gap. It's a flaw in reputation risk management. It's also a knowledge gap for risk management teams and Board members. There's an opportunity here to think more deeply about critical feedback systems if we are to build better organisational listening ability.

Post- the financial planning round of the Royal Commission, I heard from half a dozen former employees of one particular brand that they had concerns about ongoing practices in the business. They were clear about the cultural antecedents of it, and the executives involved, but also about the importance and difficulty of remedying the issues. They were all also loyal to the brand. These are stakeholders that aren’t in the inner circle, like current employees, clients, or investors are. But they are a useful 'inner-outer' circle, with valuable insights to impart if asked.

Asked the right way, they'd have been able to provide clear signals about where risks sat in the business. 

These were the canaries in the coal mine.

But no one heeded their indications that all was not right.

Of course, like all exes, ex-employees are ex- for a reason. It might be a better offer or opportunity, or it might just be that they're negatively biased. Accounting for that bias in gathering and assessing feedback would still be a lesser evil than not getting early warnings of risks.

Other sources of data include commercial partners and regulators. While many brands are now good at social listening, its unlikely to reveal what this "inner-outer" circle of stakeholders really thinks (for good reasons like confidentiality and future income).

Doing this would mean asking groups of people that we've actively sought to ignore in the past. It would mean developing a better organisational tolerance for discord. It would mean pressing for the most negative views, not the most positive ones. And it would mean being prepared to act in response.


3. Collective communication

So where do we go from here?

There's opportunity even in the worst crisis of trust – to repair, restore, improve, and actively face into the change that's needed. Change in how we communicate is probably needed at the individual, organisational, and industry level. 

How might that work? 

Each of us who earns an income or gains value from the wealth management industry carries significant personal responsibility to do good. That can start with a personal commitment, but it must lead to action. A simple action is to keep in mind, and keep telling, the good stories.

One constructive organisational-level action is to do what many are already trying to –which is to put consumers first; at the heart of our thinking, actions, and financial considerations.  That's a job for those who know far more about the people that we all serve, and the products and systems for them, than I do. All brands have a job to do to rethink how they communicate about what they do – whether that means pulling back on marketing for now and spending more time listening, or being bold about positive change (as BT has been). NAB's focus on penalty interest for farmers in default was both smart and kind. CBA's Ian Narev was fast and frank in his apology around life insurance issues.

Where I'd ask industry leaders to try harder is at the industry level.

Rebuilding community trust isn't going to happen fast or easily. It's also not going to be done at all if each brand goes their own way without a joint effort across industry categories.

Trust will build faster and more effectively if the industry and its peak bodies work collectively.

There are many good stories to be told, to multiple stakeholders, by many respected leaders. 

It's time we talked about how to work together to restore trust, not whether to.

And it's time we communicated together about the issues: how they're being fixed, and how the industry is working for good.

We owe it to the people we serve.


The Royal Commission into Financial Services continues to shake up the industry. Like the proverbial stone in the pond, the ripples will affect us all – for good and bad. We are keeping a close watch on both the seismic shifts and the minor tremors.

As we make sense of the task ahead for the industry – restoring trust – we’ll share our observations as communicators. Read our review of Round 4 of the hearings here.

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