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Home >Technology >News >Opinion | Infosys employees could yet ride to the brand’s rescue

The year 2019 has been full of corporate controversies turning into crises, with each worth a complete film script. The Yes Bank controversy with Rana Kapoor’s resignation in January; the Jet Airways crisis in March; the Indigo promoters’ spat in May; Indiabulls Housing Finance in June; the suicide of Coffee Day Enterprise’s founder in July; Punjab & Maharashtra Co-operative Bank, Thomas Cook and Housing Development and Infrastructure Ltd in September; the action-packed arrest of Malvinder Singh of Ranbaxy, Religare and Fortis in October’ and now the whistle-blower episode of Infosys—each of these could be a textbook example of crisis and reputation management.

What does a controversial event mean for a company and why does that even matter?

Events of this scale do not merely remain episodes with temporary reactions displayed through stock price movements. They have the potential to impact the long-term reputation of a company, influencing the broader business. Reputation is an emotional concept and emotions rule human behaviour. Thus, it is essential for companies to take cognizance of and be highly responsive to any such development.

Each stakeholder reacts (not responds) differently. Investor and analyst reactions are most evident in share prices and equity research report calls. The media gets into heavy coverage, while regulatory enquiries begin, the board springs to action and employees battle insecurity. All these have an undertone of an emotional response.

When the story is about brands like Infosys, the ire is greater, thanks to the connect stakeholders feel with it. The company sailed through a mega-crisis just two years ago, when Vishal Sikka, its then chief executive officer (CEO), moved out amid differences with its founders. Another management-led controversy was the last thing the brand might be expecting. Whistle-blowers alleging unethical practices in financial management is a serious concern. Many are lauding the company for its swift and clear response. It issued a statement with specifics. It acknowledged the receipt of the whistle-blowers’ letter, discussed the matter at a board meeting, instituted an independent inquiry and had its CEO Salil Parekh, as well as chief financial officer Nilanjan Roy, recuse themselves from this investigation.

Yet, many others are questioning the delay and the unclear timeline for the probe’s conclusion. This no-deadline kind of investigation increases uncertainty, despite a firm’s best intentions. Plus, even though the company is responding systematically, the risk to its reputation still hangs in the air. If the allegations are proven right, then the reputational damage would be obvious. But even if proven wrong, doubt could be sown in the minds of stakeholders. Customers will want to put the company to deeper scrutiny, and investors, regulators and other stakeholders will harbour lingering worries.

So, what should organizations do in such cases? With empowered and informed stakeholders, risks like whistle-blower complaints are real. Organizations have to recognize these risks, plan in advance, and act swiftly. As a first step, it is essential to create a strong narrative with believable proof points. Controlling the narrative is the most important part of crisis management. Long after the crisis is forgotten, when someone googles the brand name, if the search points to news clips of the crisis period, then it’s clear its reputation has been hit hard. Also, with mobile journalism, various versions of the episode could float around, adding fuel to the fire. Clarity in the narrative enables consistent messaging that balances varied opinions with the company’s perspective.

Second, the company must engage and leverage employees as its brand champions. Whenever controversy surrounds an organization, outsiders often ask its employees about it. More often than not, they are clueless and hence offer responses that are limited by their understanding. This results in the company losing an opportunity to control the narrative. If a firm shares its response with employees, along with points, then it could take a position in popular mindspace that is authentic and able to overcome rumour-based beliefs.

The classic example that comes to mind is the Tata-Mistry crisis. Cyrus Mistry’s sudden ouster created a sense of disbelief around the Tata brand. I recall asking many Tata employees about the development and most said that they had no idea what was happening; all seemed fine to them, and they got updates from newspapers, like any of us. Both their body language and tone reflected disappointment and a marred sense of belonging. In contrast, when Thomas Cook India was battling its crisis of association with Thomas Cook, UK, I called quite a few Thomas Cook outlets and also met a few employees to get a sense of their disposition. Believe it or not, everyone gave a scripted response—that Thomas Cook India is a separate entity owned by Fairfax, Canada. The company had masterfully leveraged employees as brand champions. Coupled with consistent communication through multiple channels, it saw the firm through.

Negative news spares no company. How the company engages key stakeholders to tell its side of the story is what matters. In the case of Infosys, since the current crisis originated with employees (as the whistle-blowers claim to be), it is all the more reason for the software major to work closely with its people to control the narrative and protect, or perhaps even enhance, its reputation.

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