February 2013

RBS Reputation Management

Is £5.17bn The Cost Of RBS’ Poor Reputation Management?

 

The news that RBS has reported a £5.17bn loss is bad news for all of us since the government has an 81% shareholding in the troubled bank.

This year, according to RBS, has been a year of ‘putting right past mistakes’.  The bank, like many others, has been associated with expensive scandals such as Libor and made mistakes that appear to stem from both operational and cultural factors.

As reputation practitioners we are curious as to whether these mistakes could have been avoided and we believe the answer is that they could have been.

Reputation Management is often referred to as the managing the difference between who you think you are and what others think of you.  The task of any board is to ensure that these two perceptions are kept closely aligned.  In this instance it seems perhaps they have been allowed to drift too far apart for too long.

Monitoring reputation provides an active indication as to how others are assessing you. Listening carefully to those with an interest in your organisation is the only way to understand how you are being judged and the only way to inform what you need to do to change.

It’s no longer enough for organisations to measure success by the size of their profits.  Financial performance is just one indicator of success. True reputation management takes into account the long-term picture, encompassing an organisation’s governance, trust, accountability and its ability to be a good social citizen.

Failure to listen and adapt can be truly costly.