How to survive an industry-wide crisis
If you’re a small fish swimming in a big pond with predatory sharks, just getting by is challenging. When – as the Financial Services Royal Commission has revealed – that pond is actually a swamp, SME accounting and financial advisory firms have cause for real concern.
So, when your entire industry is being dragged through the mud, how as an SME can you continue to thrive?
For example, Australia’s corporate regulator ASIC told the commission that 90 per cent of financial advisers who provide advice to self-managed super funds fail to comply with the best interests of their clients.
The reputational fallout from that alone is beyond belief.
Many more examples of general foul play in the financial planning industry have been splashed across the front pages of Australia’s newspapers.
Independent Financial Advisers Association of Australia president David Brammall said calls to the association from planners working for the big institutions since the start of the commission have increased five-fold.
Those calls mainly involve the shredding of the industry’s reputation, and consequently diminishing career prospects.
Disillusionment with the industry reached new levels around the GFC, when some business advisors admitted taking kickbacks for talking clients into unsustainable, tax-evasive agriculture schemes such as Timbercorp.
Hopefully, the long-overdue commission led by former High Court Judge Kenneth Hayne may eventually “drain the swamp”, but as an SME wading through what is now publicly seen to be a cesspool, what practical steps can you take to preserve your reputation?
Credibility is key
Whatever business you’re in, maintaining credibility (and being able to prove it) is paramount.
For example, the franchising sector is under siege – not least because of seriously disgruntled franchisees from several businesses.
If those businesses are big enough then they can simply weather the storm, but as an SME you may not have the resources to glide through the choppy waters created by industry-wide malaise.
Navigating those waters will be determined by how you respond.
Acknowledge industry-wide issues
Proactively let clients know that you are aware of a broad issue and that your organisation is committed to fixing and/or avoiding it.
Good reputations are far more likely to survive widespread industry repercussions and be minimised at a micro level if you talk directly to your clients.
Spell out exactly what your organisation cares about – especially if others in the sector have been alleged or proven to only pay lip service to the ideals.
Make it clear how you intend to live up to such values now and into the future.
If clients have been adversely impacted by some sort of widespread industry dysfunction, empathise.
Demonstrating your understanding and humanity isn’t an admission of guilt, and it shows your clients you genuinely care about their business.
Importantly, show how your organisation intends to address the broader crisis and the steps you will take to ensure clients are protected from it.
Demonstrate effective crisis management
If worse comes to worst and you have a rogue operator in your organisation, announce how your firm already has the governance plans in place to limit the damage.
This not only demonstrates to your clients that their interests have always been a top priority, but it will also help head off any negative media coverage.
You don’t want to have to create a crisis management plan on the fly after the media has called.
Improve customer service
This is fundamental to rebuilding the reputation of any sector in turmoil.
If you don’t improve customer service, consumers will continue to air their grievances concerning your company and your industry on social media.