Image ≠ Reputation
This is an article that I wrote for The Globe and Mail newspaper which appeared in its print and online editions on April 16th 2019:
In order to regain public trust, SNC-Lavalin will have to show evidence of its new character
Bob Pickard, principal of Signal Leadership Communication Inc.
Long before The Globe and Mail broke the story about what has become known as the SNC-Lavalin scandal, the Montreal-based company faced many public-relations challenges caused by its legacy of corruption.
Late last year, our firm commissioned a poll from Nanos Research which found that 60 per cent of the 1,000 Canadians surveyed were at least somewhat familiar with SNC-Lavalin Group Inc., and among these people, 62 per cent rated the company’s performance as poor or very poor concerning its “character” (which we defined as ethics, governance, principles before profits, etc.). The only relatively positive data point for SNC-Lavalin in this study was the 32 per cent who rated the company’s “competence” as good or very good (when it comes to things such as financial performance, management ability and quality of services).
Character and competence are twin pillars of any company’s corporate reputation. SNC-Lavalin looked like a classic case of a low-character, yet reasonably competent, company. The strategy suggested by our study? Communicate the commercial competence of SNC while demonstrating how the company’s performance measures up against high ethical standards.
I have learned through my almost three decades in public relations that even the best PR with the biggest budget cannot move the needle if a company’s reality doesn’t match its rhetoric. So, I had a hard time believing that SNC-Lavalin could erase its notoriety for corruption without first cleaning up its act. And indeed, SNC has already implemented a range of reforms under Neil Bruce since he became CEO in 2015.
Alas, SNC-Lavalin did not do a good enough job drawing attention to these improvements.
Last year the company conducted a creditable advertising campaign mentioning that it has been improving its ethics and compliance position for more than four years under Mr. Bruce. But I don’t think its ad campaign lasted more than four weeks, and its limited scale was inadequate to inspire public confidence in the company’s character. Had they communicated more emphatically and repetitively – across multiple channels over a sustained period of time – Canadians might be more sympathetic today.
Since then, the corporate communication of SNC-Lavalin has gone catastrophically wrong. The company continues to lurch from one self-inflicted PR blunder to another.
Unfortunately for SNC-Lavalin, public perceptions of their corrupt past appear to be entrenched – making it difficult for the company to communicate as a champion of ethics.
That the company has not overcome this dilemma became glaringly obvious with Mr. Bruce’s ill-advised remarks on a Feb. 22 earnings call: “I want to categorically say that we have done nothing wrong as a company and none of our current employees have done anything wrong.” This was two long weeks after the political scandal broke into the news, a PR eternity in a modern social-media environment.
While SNC-Lavalin later clarified that Mr. Bruce’s comments were strictly about “the current political situation,” who could believe his sweeping statement when the company is up on criminal charges and the media is filled with lurid stories reminding everyone how the company once curried favour with Libya’s vile Gadhafi regime?
It took until March 20 – 41 days after the scandal started – before Mr. Bruce launched a proactive media interview tour. By then, an even more unfavourable impression than before had formed in the public mind, but with the massive media attention, there was a golden opportunity to tell the Canadian public his company’s side of the story. Unfortunately, Mr. Bruce missed the moment and failed to turn the PR tide.
The most contentious of several gaffes was Mr. Bruce’s claim that he did not cite potential job losses as a reason to be granted a settlement in SNC-Lavalin’s criminal trial and did not threaten to move the company’s head office out of Canada if prosecutors refused to agree to such a deal.
Unsurprisingly, this was big news because it seemingly contradicted two key assertions being made by Prime Minister Justin Trudeau in defence of the federal government’s controversial handling of the file.
Having basically thrown Mr. Trudeau under the proverbial bus, SNC-Lavalin let this impression hang in the public domain for five days. Then, on March 25, an after-the-fact clarification was issued by the company stating that it never threatened anything but had emphasized the importance of these factors all along.
Its corporate truthfulness again came into question on March 29, when a SNC-Lavalin document surfaced in the media showing that the company had a “Plan B” under which it would move its corporate offices in Canada to the United States, cutting the work force before ultimately closing Canadian operations. It would be hard to interpret this as being anything but a threat, and so when the company criticized this leak, claiming that it was “being taken out of context,” it seriously undermined what was left of the company’s credibility.
The value of SNC-Lavalin’s reputation capital has now crashed to rock bottom. However, expectations have become so low that the company still has the potential to surprise people favourably if it convincingly communicates evidence of its new character. This should start at the very top, with the communication of Mr. Bruce, who should signal his leadership on social media.
What he should do is take responsibility for his company and strike the right emotional chord by showing real-time leadership online.
It is important to note that SNC-Lavalin has apologized to Canadians, but an authentic apology is not a transactional thing, like ticking a box. Or something you do just to get the media off your back. It should be a sincere sentiment that stands the test of time.
Digital disruption has made the public-relations function more important than ever, but PR plays a conspicuously subordinate role at this company. Mr. Bruce keeps going on about all the “innocents” being harmed by the scandal, but what about how the interests of these same stakeholders – employees, shareholders, pensioners – are being injured by his company’s persistently poor public communication?
It is also important to remember that image and reputation are not the same thing. Image is framed every day in the media, and reputation is the sum total of how those images are perceived over a long period of time. SNC-Lavalin doesn’t control its own image any more – Canadians do, especially online, where their hash-tagged opprobrium has taken a wrecking ball to the company’s reputation.
There’s no way SNC-Lavalin can buy its own brand back with advertising, lawyers or lobbyists; they need to earn the public’s respect by sharing their improved new reality every day, including on social media, starting with the CEO who will have less to complain about if he starts communicating continuously, consistently and authentically.