Reputations are founded upon relationships, trust and confidence, and all three have been dented by Tesco's disappointing trading figures. Successful rejuvenation of the brand requires a consistent and compelling communication with all stakeholders. This must be a key priority for the company over the coming weeks and months.
Firstly, in media and investor relations, company spokespeople must demonstrate confidence and vision, without over-inflating expectations. Philip Clarke deserves credit for fronting up to the media despite the bad news, but some of his words could have been better chosen. He was quoted in the Guardian as saying "I feel like I am in control", when a more powerful expression of leadership would have been simply "I am in control". Later in the article when asked about his legacy from previous CEO Sir Terry Leahy, he said "it isn't a poison chalice". Really astute spokespeople avoid repeating negative assertions in their answers so that unhelpful phrases like "poison chalice" cannot be used in their media quotes.
Turning to the Independent's coverage of the story, it states that Tesco "admitted it had made mistakes communicating its £500m Big Price Drop campaign". Understanding customer attitudes, behaviours and needs, and developing an approach which meets them, is of course fundamental to business success. But, no matter how well-conceived the strategy is, it will fail unless it is successfully communicated. It seems that Tesco needs to address this issue if it is to persuade shoppers to stay loyal.
Finally, arguably the most important stakeholder group of all, employees. Tesco has been one of the UK's largest, most successful and admired businesses for more than ten years. Working for the business is a badge of honour as well as providing a secure and rewarding job or career. The latest trading figures will have sent a shockwave through the organisation as many members of staff face negative business news for the first time in their Tesco career. This can be disorientating with the result that self-confidence and motivation can quickly erode. This is the last thing that Tesco needs as it seeks to bounce back quickly from its worst week for many a year. The key to avoiding this fate is effective communication which reassures and listens to worried employees, paints a clear picture of the future and therefore retains their commitment and energy.
Philip Clarke faces a significant business challenge as he maps out Tesco's future, but if he is to succeed, communication must be at the heart of it.