CURRENT AFFAIRS
‘Irish society is facing a true opportunity here, if we choose to take advantage of it, to spur on more entrepreneurship’
recent years. Lambkin points to the recent Michael Lewis article in Vanity Fair entitled ‘When Irish Eyes Are Crying’. “This was just the latest in a series of body blows that appear to
have caused extensive reputational damage to our country and to our brand,” she says. “But the arrival of the ECB and the IMF last November was probably the greatest blow in a downward spiral that had gathered momentum over the last two years. However, now we must look forward and consider how we can repair the damage and recover not only our reputation but, more importantly, the economic progress that is the real measure of that reputation.”
Countries as brands The idea of treating countries or nations as brands has been gaining currency in recent years as competition for tourism and foreign direct investment (FDI) intensifies among the developed and emerg- ing nations and, says Lambkin, a “minor industry” has grown up in designing, managing and measuring nation brands. “Ireland was an early adopter of the concept of a nation brand and, arguably, has been consciously cultivating Brand Ireland for at least 50 years, since the creation of promotional bodies like Bord Fáilte [now Fáilte Ireland] and the IDA,” says Lambkin. “Our exceptional record in developing food exports and tourism, and in attracting a disproportionate share of FDI, attests to the success of those efforts.” Our exceptional economic growth from the mid-1990s to the mid-
2000s contributed to creating a brand that was the envy of the world,” she says. “This success reached its zenith in 2005 when the Economist Intelligence Unit’s Quality of Life survey found Ireland top of the list of 111 countries and headlined Ireland as ‘the Best Country in theWorld’ to live in. While It seems hard to credit such superlatives today, we still have many of the assets that lead to them.”
Corporate parallel In her research, Lambkin has looked to the corporate world for par- allels on reputation recovery. “Extensive research has been done to see what happens when commercial organisations face crises, and there is a lot to be learned from this.” “The first thing to note is that crises vary in gravity and the recovery
rate is in reverse proportion to the degree of gravity,” says Lambkin. “Also, corporate crises form a continuum from least to most serious in terms of their consequences. Ireland’s problems belong at the lowest level of this continuum, resulting principally from ‘inadvertent mis- management’. In theory, this should be easier to deal with from a rep- utation point of view, than more disastrous events. “Another feature of organisational crises has to do with the speed
of occurrence; they can be sudden or they can be gradual. “Sudden crises are circumstances that occur without warning and, consequently, the organisation and its leadership are not usually
blamed,” says Lambkin. “Gradual crises differ in that they begin as minor issues that, through negligence, develop to crisis status – often aggravated by rumours and counter-rumours. The problems affecting Brand Ireland probably belong in the lat-
ter category, says Lambkin, so it seems clear that a first and critical step in restoring reputation is to remove the people whose are seen as responsible. “Our problems have been variously attributed to the bankers, the developers, the government and the
regulators.Most of the bankers and regulators are now gone and we have a new govern- ment, so the basic conditions are now right to allow us to move for- ward to rebuild our national reputation.”
Repairing reputation Lambkin also draws lessons from the corporate world when it comes to timescale for reputation recovery. “Firstly, it would probably be fair to consider the end of 2010 as the end of the ‘crisis’ period, with any repair starting from 2011.” Then she points to reputation research conducted every two years
by PR firm BursonMarsteller. Its survey of 685 executives from around the world suggests it takes companies a little over three years to recover from a crisis that damages their reputation. “If this is correct, and we consider January 2011 as the starting
point, then we might expect that Brand Ireland would be back to normal, pre-crisis levels by the beginning of 2014,” says Lambkin. “Although I’d be hopeful that the restoration of normal business will be much quicker than that!” However, communications and effective crisis management will
be key, she says. “That same research shows not all companies recover. It was those companies with effective crisis response that saw their stock price recover quickly, and remain above their pre-crisis price thereafter. In other words, the difference between effective and ineffec- tive crisis response was, on average, 22pc of market capitalisation. This has a particular significance for our own situation here in
Ireland, Lambkin believes. “Virtually everyone agrees that the com- munications deficit fromGovernment over the past two years was an important contributor to the gravity of our problems. It led to great anxiety and loss of confidence among the general public and con- tributed to the appetite in the media, at home and abroad, for bad news stories,” she says. “We can only hope that our new Taoiseach and his cabinet will
heed this and work tirelessly to raise morale at home by having greater visibility, by keeping the public informed about events, good and bad, and by demonstrating a positivity and sense of purpose that will lift spirits and thereby stimulate growth. We will also need to rely on them to represent us well abroad, to restore confidence in Ireland as a stable and attractive investment location to bring their business and to provide the employment that is so badly needed.”
UCD BUSINESS CONNECTIONS 21
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