The Risk of Innovation. 5 Communication Rules for Disruptors

Communication experts from Enterie, a network of technology PR agencies, present a short guide to issue management for disruptive companies.

The list of reputation risks disruptive companies are facing is quite long. It covers:

  • privacy-related issues and issues that deal with personal data protection, especially in the case of online services and online-based business models;
  • legal concerns—when technology and innovative ways of its utilization outrun regulations and a company acts in a legal vacuum;
  • accusations of unfair competition—related to advantages stemming from not being subject to the same regulations as “traditional” competitors;
  • responsibility for user actions—which is often beyond a company’s control when it comes to all sorts of sharing economy services and business models;
  • accusations of tax avoidance—when the status of a service provider is vague, so it is unclear who should pay them and if they should be paid in the first place;
  • other issues—related to specific services, products, and their innovative nature.

Customers are usually not interested in the problems of “traditional” competitors, especially when it comes to financial institutions or the music industry. They will not care much (even if they should) if the new providers are accurate with taxes. Lower prices will sweeten the deal. But they will be very concerned when their privacy is at stake.

Still, issues related to unfair competition and fiscal duties will surely not come under the radar of regulatory bodies, public agencies, or the media.

These risks seem to be an immanent feature of innovation—of creating new products, services, and business models, of using new technologies and generally doing things a different, new way.

How to avoid such traps and mitigate reputation risks related to the disruptive activity of innovative tech companies? Even if technologies (and threats) are new, the rules for communication and issue management are the same as always.

 Transparency

Transparency of actions and communication is always crucial, as hiding things may cause suspicion and lead to conspiracy theories. It is a strong signal about your good intentions which will build trust. When the market is still “under construction,” an open dialogue of stakeholders can positively influence its development. It can also give you a better chance for a kind and forgiving treatment in the event of a mistake.

Cooperation with regulatory bodies

Most of the time, new market regulations are in favor of its stakeholders. Of course, regulations usually mean restrictions, responsibilities, and—in consequence—costs. However, regulations give some significant advantages, such as stability, predictability, and mitigation of investment risk. Regulations are to be introduced—sooner or later. It is therefore important to participate in their development by openly communicating your point of view.

Respect

Though it refers to every business, this rule should be the touchstone for disruptive companies. It is hard to imagine a true dialog without respect. Being arrogant or even simply ignoring criticism will not shut it down or solve any issue. The style and tone of your communication will affect the way your arguments are heard and perceived.

The customer comes first

The good of the customer should always be the focal point of any company’s actions (and communication efforts!). And, in the case of innovative tech firms, it usually is. Innovations and disruptions often increase competition, drive down prices, give customers better access to products and services. These phenomena usually go in line with the goals of regulatory bodies and consumer organizations.

All innovators will be well visible, especially on markets dominated by few strong players. Therefore, it is worth to use this advantage and cooperate with institutional and social partners, who will confirm your credibility.

Coherence

According to this old public relations principle—“talk the walk, walk the talk”—whatever we say, it should find confirmation in our deeds. And the other way around. It is especially applicable to all crisis situations. another PR golden rule says that during a crisis, it is more important how an organization reacts than what is the source of the crisis itself. Some risks cannot be avoided. Especially when we are dealing with new technologies, acting on an unregulated market, disrupt the old regime, and put pressure on traditional competitors. However, they can be mitigated. And when they do realize this, this universal crisis sequence is the only path:

  • Admit your guilt;
  • Apologize;
  • Announce improvement.

Then, walk your walk, that is, implement improvements, and talk the talk—tell your audience about it.


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