Simon Hayward from Cirrus appears on Sky News
Cirrus CEO Simon Hayward appeared on Jeff Randall Live on Sky News on Tuesday 19 November to talk about the recent upheavals at The Co-operative Group and the impact on the Group’s reputation. Can it recover?
Renowned for its membership ethos and strong ethical values, The Co-operative’s reputation has taken a few knocks recently. Tuesday saw the resignation of Group chairman Len Wardle, citing “serious questions” raised by the scandal surrounding its former banking chairman, Paul Flowers.
Earlier this month, the bank was forced to agree on a rescue plan to plug a £1.5-billion-pound capital shortfall. On Monday it announced a “fact-finding process to look into any inappropriate behaviour” and a review of its “democratic structure”.
For an organisation which has always prided itself (and marketed itself) on its ethics, this is a huge crisis.
New Group chair Ursula Lidbetter has said that The Co-operative must be “fit for the future”, but its ethos should remain unchanged. Speaking on BBC Radio 4, she vowed to take a long, hard look at what kind of governance The Co-operative really needs, engaging its 7 million members in the process and drawing on examples of the best governance from around the world. She also added that, “The goodwill in the nation for what we want to be is immense.”
Speaking to Jeff Randall on Sky News, Simon Hayward from Cirrus highlighted the importance not only of sound governance, but also leadership capability. Given the huge challenge The Co-operative now faces, Simon suggested that leaders see this as a real opportunity to modernise the organisation and create significant, lasting change.
The purpose and values at the heart of The Co-operative need to be brought to life by leaders who can role model them and deeply engage others with them – both inside and outside the organisation. Many customers feel The Co-operative, which prided itself on ethical principles, has broken its promises to them. Trust needs to be rebuilt.
Is it possible to recover? Simon cited Starbucks as an example of a brand in recovery. Starbucks was one of most damaged brands of 2012 after months countering accusations of tax avoidance. Its visible presence on the high street made it a more prominent target for protests and boycotts than Amazon and Google, who came in for similar criticism around the same time.
Starbucks’ subsequent announcement in that it would pay increased corporation tax helped to restore its reputation. Research from YouGov has found that in the wake of scandal, a brand’s reputation often drops and then recovers fairly quickly as consumers forget and move on. For Starbucks, customers didn’t forget quite so quickly and its recovery has taken longer than its decline. Given how badly The Co-operative’s reputation for ethical principles has been dented, it’s likely to face an equally difficult journey.
How quickly can The Co-operative recover its reputation? If leaders succeed combining a focus on core values with improved governance and capability, the organisation could carve out a strong, renewed and differentiated standing. It has a strong and proud heritage to build on.