September 2017

Can Ryanair Survive its Reputation Crisis?

It has been an interesting 48 hours listening to the word Reputation being banded around once again in relation to Ryanair and their latest high-profile media story around pilot holidays and cancelled flights.

Remembering similar corporate issues, the BBC’s Simon Jack reports, ‘…the performance and profitability of these companies suggests that these mistakes won’t make a permanent mark.’

He continues ‘By way of comparison, Volkswagen announced today it is selling more cars than it did before the diesel emissions scandal.”

Interesting points. Can big brands and organisations such as Ryanair and VW survive or even thrive after continued ‘inglorious moments’. The short answer is yes...and no.

For those who practice in reputation, the story is not quite so clear cut.

Any organisation, like Ryanair and VW, have spent years developing reputation equity, essentially a bank of goodwill on which stakeholders rely. It is moments like this that reputation equity gets spent – and rapidly.  So, can they survive such incidents? Yes, quite possibly.

If their products are in demand, they can of course continue…. for a while. Continuing for the longer term is different. They not only need to perform well in the area of reputation in which they have failed but in every other aspect of reputation too.

Whether they survive in the longer term or not, is not just measured on a ‘good’ or ‘bad’ continued reputation. It is not just based on good or bad products. It is not just based on good or bad leadership.

Strong corporate reputations are a mosaic of perceived qualities and strengths, held by stakeholders about that organisation around a number of reputation attributes.   The aim for the Ryanair or VWs of this world is to pay attention to all of those attributes, in all stakeholders, at all times.

Whether they remain unmarked by this incident depends on the answer to questions like the following.

  • Do they continually listen to their stakeholders needs and the drivers of the conversation? If they did or do, they would hear the discontent and pay attention to it before it hits the headlines.
  • Are their employee engagement strategies aligned with corporate strategy? Are complicated contracts likely to serve them in future talent retention and attraction in a world where pilots are in high demand and competition from other airlines is high? Oh, and by the way, it matters what sort of employer passengers perceive Ryanair to be, just as much as it does to employees and potential employees.
  • Is their leadership strong and transparent? Does this latest incident hint at a lack of alignment with the organisation’s long term strategy? As a leader, creating a perception among stakeholders, then seeming to act or tolerate processes that may not be aligned with that, will ultimately damage transparency and reputation.

And so, it continues.  All aspects of reputation, across all stakeholders, listened to in a digital and connected world, 24/7 hours a day is what is needed to protect reputation equity and be sure that there is no lasting impact.