ITL #298 - Rocked by business scandal: rebuilding trust in Malaysia

1 year, 7 months ago


High profile corruption scandals like 1MDB have tarnished Malaysia’s image. If perceptions are to change, the country’s big businesses must take reputation management to heart as they set about rebuilding trust. By Liz Kamaruddin.

Malaysian business is facing its toughest test in the 25 years I have been working in reputation management in the country, helping some of the country’s largest companies grow and thrive.

The growing challenge comes not just from the well-documented global fragmentation and polarization of society driven by social media giving anyone an instant platform to spread wisdom and prejudice.

It comes also from Malaysia’s reputation nosedive over the last few years. The country has found itself with continuous, sensational headlines globally: human tragedies, corruptions and dwindling political trust have all clouded Malaysia’s once favorable business environment and its reputation.

In many ways, we tend to forget that Malaysia is a very different country from 10 years ago. There are new, emerging and complex socio-economic challenges. And it is an ever more globally-integrated society that travels more widely internationally than many Europeans or Americans.

Yet Malaysia faces tough decisions about the future. Global perceptions of Malaysia are not going to change in the short term.  The Malaysian tragedies are not going away. It will be the subject of discussions for years to come.

Perceptions affected by 1MDB

1MDB still has a long way to run.  It has become a stock paragraph added to any negative Malaysia business story and will persist. In this internet world, nothing has a sell-by date. What the actual 1MDB truth is does not matter right now. Perceptions are everything and difficult to change.

I spoke to some Malaysian business leaders who are anxious about their ability to grow internationally because of the nation’s poor reputation for governance and increasingly polarized factions. They are concerned that truth and facts no longer seem to matter and about how quickly an issue can become a threat to a company’s very existence.

They understand the world has changed but, like a turning super tanker, Malaysian business as a whole is understandably slow to change course to manage the new threats. Habituation and history are powerful obstacles to revolution.

This is not unique only to Malaysia and partly explains why so many major international businesses fail spectacularly and publicly through complete and utter failure to understand their constituencies.

In Malaysia, communications is rarely recognized as a strategic function that should be influencing business strategy and integrating non-technical and stakeholder risk into plans. 

Comms plays a supporting role

Business leaders mostly see it as PR support – events managers trusted to effectively achieve positive and frequent news media coverage and reporting, deliver well attended corporate events and product launches, as well as marketing/communications campaigns. 

If you talk to Communications professionals in Malaysia, that’s overwhelmingly how they will describe their role; perhaps merely reflecting what their bosses want. This passive approach has not changed much in 20 years apart from the addition of social media as a new channel for delivering those messages.

At the same time the world has changed fundamentally.

Choose your silence wisely

A major shift needs to happen. There is a no point communicating what the company is doing if you know that the audience will find it unacceptable. It is counterproductive.

There is no point remaining silent in the face of controversy as the worst possible conclusion will be drawn – this is not new, indeed Winston Churchill once memorably said: “Life is fraught with opportunities to keep your mouth shut.”

Communications must sit right at the cutting edge of strategy development and needs to influence or inform a company’s mission and values today. For example, it is not by chance that big successful multinationals rely on communications to lead the development of business principles.

Our knowledge of the outside world can be the difference between a company meeting its business objectives or failing; delivering multibillion dollar projects on budget and schedule or being delayed by NGOs for years, crippling businesses and productivity.

Our objective used to be to tell people things.

Today, we need to enter into clear, concise dialogue with an increasingly fragmented and complex network of stakeholders, often with global inter-relationships.

Understanding who counts

We need to understand who has influence, who can add value, who is dangerous and why, and who is just noise in the background.

Listening is now far more important than telling. We have the challenge to always create a dynamic, interactive, adaptable, ever-changing perception of an organisation.

The change is from being a function that is seen as delivering tactical output to one where strategic input is critical.  The output is the easy bit...if the input is right. It can be impossible if it is not.

The transformation is not straightforward.  The communications industry needs to develop the skills to take its place on Malaysian leadership teams.  It has to earn its place.  But CEOs need to develop talent and start giving reputation management the attention it needs.

Historically, companies that are best at understanding and integrating the external world into their strategies are of two types. Those which have suffered major crisis that have threatened their existence and learned; and those with enlightened leaders who have put communicating at the center of their plans, such as Richard Branson, who once said:  communication is the most useful skill a leader can possess.

The author

Liz Kamaruddin is one of the Malaysia’s leading communications experts with a track record of success working for Malaysian and multinational companies. Formerly the Global Head of Strategic Communications for PETRONAS, she is now Managing Director in the Strategic Communications segment of FTI Consulting and based in Kuala Lumpur.


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The Author

Liz Kamaruddin

Liz Kamaruddin is one of the Malaysia’s leading communications experts with a track record of success working for Malaysian and multinational companies. Formerly the Global Head of Strategic Communications for PETRONAS, she is now Managing Director in the Strategic Communications segment of FTI Consulting and based in Kuala Lumpur.

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