This intense, future-focused, orientation among consumers, may explain why corporate controversies are endemic in our consumer-led society. It may also help to explain how to manage such events once they occur.
The destructive capacity of a true corporate firestorm is not only in its ability to ruin careers and generate bad PR, but also, its ability to shape or even destroy consumers' expectations about the society in which they exist.
The corporate firestorm destroys the perceived hopes and futures of consumers, and corporate scandals wreck the setting in which consumer aspirations are located: the future.
A few examples of companies and organisation that have recently seen their reputations damaged by corporate news firestorms are:
- Royals Royce
But how does the corporate firestorm affect a consumer’s perceived future?
The Volkswagen emissions debacle ruined their reputation as a responsible automobile manufacturer and left consumers questioning if their cars had played a part in climate change.
Coverage of HSBC’s infamous relationship with the Sinaloa cartel in Mexico, brought the question of the safety to the minds of society. HSBC customers were forced to consider the effects of gang activities and drug dealing.
The loss of a consumer’s perceived future immediately accrues three costs that corporate reputation management should address and communicate.
- Lost opportunity costs for the consumer – the future that didn’t happen
This is the cost of the knowing there was a better future for the consumer that could have been, but didn’t manifest. Rather than only addressing the moral regret the corporation may have, communication should also address the regrets the consumer is feeling; acknowledging and coming to terms with the consumer’s lost dreams, hopes and the unwanted change to their end benefits.
- The consumer’s transaction costs – managing new future goal
This is the cost the consumer has in planning the new anticipated timeline. Because the consumer must now spend efforts gathering information, planning and envisioning a new future, communication should support this cognitive expenditure. In terms of communication this means painting new pictures of the future and providing information.
- Consumer ‘hysteresis’ – assisting in reforming consumer identities
Because the world has regularities, consumers know what to do and what their roles are. Consumers understand who they are. When the future suddenly changes because of the corporate firestorm, it not only brings the surroundings into question, but also who they are, what they do, and what their roles are?
For example, what does it mean to be a VW owner after the emissions scandal? The consumer is left in a state of ‘hysteresis’ - lagging in identity formation. Corporate communications must assist the consumer to become his or her new self.
Recreating the future: accountability and governance