2016 was a chaotic year. But if it made one thing clear it’s that businesses are free to shape their own reputation, says Nick Barron, managing director of corporate reputation at Edelman
From Turkey to Trump and Brexit to Brazil, 2016 was an epochal year, characterised by rising instability and populism.
As 2017 begins, what lessons should businesses learn? How should a chief executive prepare for the year ahead, in a climate where uncertainty is becoming the new normal?
Clearly, businesses need to be more agile, and receptive to changing consumer perspectives. The last 12 months have demonstrated that many businessmen and politicians have been speaking a different language to the people who bought their products or voted them into office.
Just as important however, is that we anticipate the future impact of current trends. At Edelman, we see three issues that will have profound consequences for corporate reputations:
2017 – key trends
- Businesses will be forced to respond to rising inflation, with a more interventionist government to boot. Politicians are likely to use this opportunity to show their electorates that they are listening to their concerns, and doing something about them. Expect greater interventionism, corporate shaming and increased political interference over the pricing of energy and other utilities.
- The gig economy will turn from an ethics debate into a fiscal one. The gig economy is here to stay, and the taxman has started trying to figure out how to make money out of it. Disruptive businesses will have to fight harder to avoid tighter restrictions on their operating models and will have to engage in the debate on tax.
- The globalisation backlash is likely to deepen and organisations will be forced to reconsider their positions. Businesses must demonstrate they understand their consumers’ concerns, and are working in the interest of all stakeholders in future decision-making processes.
Companies don’t have to just batten down the hatches and wait for these trends to sweep over them. Business has a licence to lead. Edelman’s Trust Barometer data shows that the public believes business should play a role in big debates and that profit and positive social impact are compatible.
The last year also demonstrated that the risks associated with taking strong positions have been overstated.
For all the enmity that the Brexit debate provoked, businesses that took a position faced relatively little public backlash, while analysis of Trump’s performance during the presidential campaign by George Washington University found that his outspokenness was beneficial to his poll numbers, regardless of how much critical backlash he engendered.
And while the pitfalls are overestimated, the benefits of taking a stand are often underplayed. The public trust and support companies that they believe share their values.
Speaking out may alienate a few who vehemently disagree, but how can customers identify with a company that says nothing? On the issue of gay rights, for instance, brands like Oreo and Skittles have shown that the commercial upside of taking a stand far outweighs the downside.
2017 will be a year when everything is up for grabs. At stake is a new political settlement with the EU, a new trading relationship with the world and a new industrial strategy. All of this will play out against a backdrop of ongoing digital disruption and an uncertain future for consumers.
The choice for business is clear: lead, or play on someone else’s terms.