Earlier this month, SMRT Corporation announced that net profit for the three months ending June 30 2013 was S$16.3 million, down 55 per cent from a year ago despite revenue for the quarter growing by 3.5 per cent to S$284.8 million.
Stock analysts have also rated SMRT as “not a stock to own” citing “unsustainable business model”, “misalignment between fares and operating costs” and “impairment to bus business if losses continue."
It appears that public perception of SMRT has taken a tumble. Sometimes when a crisis occurs, nothing that a company does after that is ever good enough for the affected stakeholders.
Even a change of senior leadership will not help if “inherited” problems continue to plaque the new management team. This is because the new management team invariably also inherits the expectations stakeholders have of the company.
This problem is exacerbated if the inherited problems are deep rooted and takes time to solve. Every new incident continues to engender stakeholder ire, and if stakeholder resentment and investor confidence is not adequately managed, the new management team may find themselves being replaced by the Board.
This is where changing the narrative is important. From a crisis communications perspective, a company's brand and reputation not only conveys what it stands for, but also establishes expectations about the quality, service and value customers can expect when using the company's products and services.
As expectations are intangible and created via deliberate sustained communications, these expectations can also be “adjusted” via the same way. In the instance where a management team is replaced to mitigate the fallout of a crisis, the new team needs to establish new (and achievable) expectations for stakeholders.
If they fail to do so, stakeholders will by default continue to judge the new team's performance based on past expectations. And in the event that meeting these past expectations takes time to materialize, the new team will be fighting a losing battle.
One effective public relations strategy is to shift the narrative from one of meeting past expectations, to one of showing progress. For example, in the case of SMRT Corporation, a shift in narrative would be to move stakeholders' expectations away from zero breakdowns and high dividends, to one in which the new team shows tangible progress towards returning to zero breakdowns and high dividends.
Achieving such a shift in narrative would entail the new management team openly acknowledging current realities and then presenting stakeholders with their strategy and detailed plans to return the company to its former glory.
New incidences of train failures or lower profits can then be dealt with more effectively contextualized against the new and more realistic expectations. Additionally, demonstrated good progress by the new management team will also do much to shore up investor confidence.
In short, in crisis communications situations where the company cannot win the current narrative, the company needs to change the narrative to one that it can win!
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Justin Fong is the Principal Consultant/ Trainer of CW Fong & Associates