The PR Power of Fessing Up

Many leaders are spending an increasingly large share of their time worrying about their organization’s reputation. Companies are under closer scrutiny than ever from employees, shareholders, unions, the media, and activists, who are ready to pass judgment on corporate actions and impacts, especially regarding societal and environmental issues. This has left some leaders struggling to figure out how to build and maintain a positive reputation in the eyes of their key stakeholders.

In a world where social media in particular rapidly fuels narratives that organizations can’t control, it can be hard to believe that at one time, businesses could simply release some positive information about themselves to distract stakeholders from negative news. This was once a standard public relations practice, and even fairly recently some companies have continued to make pro-social claims in response to unflattering revelations about their business activities.

Today, this smoke-and-mirrors strategy is no longer viable, since negative information is now easier to share and discover than it used to be. As a result, organizations are more likely to treat the discovery of negative information as they would treat any other type of crisis: They apologize, ideally immediately and transparently, and promise to make amends.

Both of these strategies are reactive — and companies with a more sophisticated approach to communication have figured out that a proactive approach is far more effective for reputation management. Many companies, for example, forge partnerships with unions and nongovernmental, philanthropic, pro-social, or activist organizations. While they may do so to learn from these organizations, most also hope to gain stakeholder trust by association.

More recently, businesses have begun to engage in what has been called strategic silence, which is when an organization engages in socially responsible behavior or philanthropy without disclosing it. The literature on strategic silence shows that they do this to avoid potential allegations of hypocrisy: Social-impact watchdogs are savvy, and when they see an organization touting its good deeds, they often look under the hood to see whether its behavior is in fact consistent with what it espouses.

Our latest research has uncovered yet another reputation management strategy: the confession.