Is reputation recovery viable for Tesco? | Video

When Tesco overstated its profits, it lost over £2bn in value - sending shockwaves across the world. We examine whether it's possible for the company to recover its reputation


In a digital age a crisis can break, potentially undermining the reputation of a firm. Now Tesco is one of many struggling to stay afloat when bad news breaks, impacting stock values within seconds. European CEO speaks to online reputation specialist Dave King, CEO of Digitalis Reputation, about how companies can protect themselves.

European CEO: When news that Tesco had overstated its profits broke, do you think that the company effectively handled the public backlash?

Dave King: In terms of the online impact, Tesco’s an interesting case study. Because unlike most consumer brands, Tesco operates multiple businesses.

They’ve got a credit card business, they’ve got an insurance product, they’ve got a supermarket, they’ve got an online shopping platform, and so on and so forth. So Tesco, albeit naturally, over the last few years, has created quite a barrier online in terms of protecting its online footprint from natural attack.

Now, what that doesn’t mean is when The FT or The Telegraph or other broadsheet or tabloid titles write something nasty, it doesn’t cause damage. Of course it does: it can and it will.

Tesco…has created quite a barrier online in terms of protecting its online footprint from natural attack

What it does mean though is there’s a natural ability to mitigate that impact over a longer period of time. And that’s often what we’re advising clients on: ‘We’ve been a subject of a crisis, we know that it’s a big problem right now, we’re dealing with it as best we can, we’re communicating with stakeholders. But how do we make sure – in three days’, three weeks’, three months’, three years’ time – this story is not the dominant part of our online profile?’

European CEO: Tesco isn’t just a minor player: it’s a global player. So when Tesco makes a mistake, everybody seems to be rattled, and stakeholders from the investors to just the general public are all affected. Now, we know that information has been trickling out in terms of the severity of the situation; do you think that Tesco is ever going to regain this confidence that once existed?

Dave King: I’m sure it is a very real issue internally at Tesco, and I’m not sure that it’s an uncommon issue, in the sense that – especially in a colossal organisation such as Tesco – it’s entirely conceivable (quite apparent, it would seem!) that not all of the facts were recognised at board level. And of course, it takes time to ascertain those facts.

The question in protecting one’s reputation is, how is that dealt with in the media, and at consumer level, in the short time it takes to acquire those facts.

European CEO: Now, I know that you can’t reveal the names of the high profile clients that you represent. That being said, let’s talk about their reaction to crises that happen internally and then become exposed. There must be a lot of emotions; what is the first thing that you advise your clients to do when they’re in this sort of a situation?

Dave King: It’s a good question, and you know, there’s a lot of things clients have to think about at the height of the moment. One is not being emotional. So you know, you’re right! That is the key thing to address.

The other one is clearly, not to tell lies. You know? If the facts aren’t clear, be very clear about what you do and don’t understand.

But in terms of the online world, our focus is on monitoring what’s being said out there. What are people saying about this? What is the reaction on the street? So that minute by minute as the crisis unfolds we can understand not only how people are reacting to the crisis itself, but how are people reacting to what you’re saying about that crisis? And then we can react accordingly.

[T]he internal threat is a big threat to organisations

European CEO: There was a whistle-blower in the Tesco example that really brought all of this to light. Nobody was aware, completely, blissfully ignorant to the fact that there was even a reporting issue at play here. So, what role do whistleblowers play in a company’s larger online reputation, or any reputation management programme?

Dave King: Well, the internal threat is a big threat to organisations. Not just the deliberate internal threat, a whistleblower, but also of course all employees of businesses – most employees of businesses at least, these days – leave a lot of information on social media. And that information will be used to compromise a business, its reputation, or indeed to inform a cyber-attack.

So I think dealing with one’s employees is increasingly important; not just for online reputation, also to protect against cyber-threats. Whether it’s the deliberate threat of an insider, or an accidental oversight.