The public’s recall of business news stories has been particularly low this month as people have been focusing on the London Bridge terror attack, the Grenfell Tower tragedy and uncertainty following the General Election.
British Airways remains in the business news throughout June following its IT shutdown during the late May bank holiday and the announcement of a strike by cabin crew, but the airline is clearly falling out of the news cycle.
On the other hand, another company at the beginning of a long running story, which is likely to build into July, is the building contractor, Rydon.
In the eye of the hurricane
It’s rare that a single reputational hit destroys a business, but the Grenfell Tower disaster has the potential to do so.
Rydon, the lead contractor responsible for refurbishing the building, is coming under intense criticism based on allegations that it cut corners by installing cladding that failed to meet building regulations. If this is proven to be the case in the ensuing Public Inquiry, it would almost certainly lead to the closure of Rydon and probably long prison sentences for directors of the building company.
From a communications point of view, Rydon is doing the right thing to protect its reputation. In public statements from directors of the business, Rydon has got it mostly right. It has (a) expressed shock and concern for the victims, (b) praised the emergency services, (c) pledged to help and support authorities investigating the causes of the fire and (d) emphasised its 40 year commitment to safety and quality in its work.
In addition, Robert Bond, CEO of Rydon, has tried to minimise further reputational damage based on speculation about the cause of the tragedy with a statement that ends “I will do all I can to assist in this investigation in order to establish what caused this tragedy. In light of the Public Inquiry, we cannot make any further comment at this time.”
So, assuming Rydon has complied with all regulations, should it sit in the eye of the storm and remain quiet until the Public Inquiry concludes? Almost certainly, no.
Even if its reputation is eventually cleared when the inquiry concludes, Rydon’s image can still be harmed along the way. Rydon needs to help not only the inquiry, but also demonstrate to the wider population that it cares. Without prejudicing the inquiry, the building contractor has a responsibility to provide as much factual information about cladding materials used on other tower blocks which might help to ensure the safety of residents. This should be done proactively and quickly. The more that Rydon is thought to be using the inquiry as a rationale for limiting communication, the more secretive it appears and the more reputational damage it will incur.
Should the Public Inquiry find that Rydon did knowingly cut corners on the cladding used on Grenfell Tower, its reputation will be swept away along with its business.
However, like real hurricanes, reputational storms, change direction very quickly. If Rydon has followed all relevant regulations, as it asserts, public anger will shift to building codes and their enforcement by regulators, local councils and ultimately the Government.
The Grenfell Tower reputational hurricane already seems to be changing direction. With cladding from nearly one hundred high rise buildings failing emergency safety tests so far and thousands of residents forced to leave their homes as a result of fire safety failings, it is becoming clear that laxity over fire safety in tower blocks is widespread and anger is rising.
More building companies, like Arconic, the maker of the panels installed on Grenfell Tower, are getting sucked into the storm. Regulators and councils are on the back foot. The Government with its wafer thin majority is trying to keep focused on Brexit, but finds itself increasingly buffeted by the Grenfell Tower storm.
When this reputational hurricane finally blows itself out, the hit on Rydon’s reputation may well be seen as just a small footnote compared to the damage done to public trust in local and national government to keep people safe.