The value of a good corporate reputation cannot be understated. It’s one of the main reasons businesses invest in communications and public relations. That’s why tracking media trends and watching for developments that signal risks, as well as opportunities, should be part of any corporate communications strategy.
This week there was a prime example of exactly why this matters so much. CEO of fashion retailer Next, Simon Wolfson, made headlines when he criticised an organisation dedicated to urging businesses to pay a so-called living wage. He claimed that £6.70 an hour is enough to live on for some people. Coming from a man titled Lord, worth an estimated £100 million and who took home a £4.6 million pay package last year, this out-of-touch comment would have been a PR disaster at the best of times. However, his outrageous remark came on the same day that Next posted bumper annual figures: pre-tax profit increased 12.5% to £794.8 million and the dividend rose by 16.3%. These results should, and probably would have, dominated media coverage of Next if not for Lord Wolfson’s poor judgement.
It would have helped if Lord Wolfson, or his communications advisors, had been paying attention to just how controversial living wage discussions have become. In the US, for example, Walmart and McDonald’s were among the major corporations that were villainised in the press due to their refusal to pay a living wage. Low paid employees at both companies even went on strike to demand a better wage.
Corporate missteps like this naturally generate plenty of bad publicity and are detrimental to an organisation. But arguably the worst part is that this damage could have easily been avoided by tracking recent media trends. If that had happened at Next, maybe they would have realised that someone who makes £4.6 million a year should refrain from providing “thought leadership” on the living wage debate.