(Medium read – 5 mins)

So the report by UK air traffic manager NATS into the catastrophic failure of their systems recently was a one in 15 million chance happening. Well here’s the bad news – these “Black Swan” events do happen with probability-defying certainty with huge implications for an organization, its customers and stakeholders.  

In an era dominated by lightning-speed communication, social media and perpetual news cycles, the recent failure of the UK’s Air Traffic Control System reminded me of a very old but classic formula to which I used to refer early in my career: 

Reputation = Behaviour + Communication.

Costly System Crash

A couple of weeks ago, the UK’s aviation sphere was thrown into disarray following an unprecedented failure in the air traffic control system, resulting in hundreds of cancelled flights and thousands of stranded passengers across Britain and Europe. For many, the repercussions extended beyond mere travel disruption. Stories surfaced of families separated from their luggage, expecting mothers grappling with stress in airport lobbies, and deep frustrations echoed by countless travellers.

The gravity of this situation, aptly described by Willie Walsh, director-general of the International Air Transport Association, as “staggering,” showcases the magnitude of responsibilities organizations like NATS (the UK’s main provider of air traffic control services) shoulder. The expected bill for this mishap? Potentially, a staggering £100 million.

The “World-Class” Contention

Martin Rolfe, the chief executive of NATS, sought to defend the organisation by declaring that their service is usually the “envy of most of the world.” This assertion, however, drew sharp criticisms and was largely viewed with scepticism by many, including key figures in the aviation industry.

The Bank of Goodwill is not an infinite reserve. Companies and organisations need to understand that it is painstakingly built over time and can be rapidly depleted if not managed judiciously and actively. While NATS might pride itself on its world-class capabilities, this incident reveals the precariousness of resting on past laurels.

Reputation Under Scrutiny

Looking at the widespread customer comments on the incident offers insight into the profound impact such failures can have on public perception. Comments range from outright frustration with the system’s vulnerability (“Who needs to fear Chinese hacking when a country can just file a flight plan and bring Britain to its knees?”) to critiques on the brittleness of the system’s resilience (“Erroneous data being input should never cause a system failure”).

The salient lesson? The “Bank of Goodwill” operates much like any other bank; withdrawals, especially large, unexpected ones, can be costly. Communicating frantically during a crisis is no substitute for communicating strategically and often during the good times – periods when short-sighted organizations like to keep their heads down and call it “silent running”!

Old Wine, New Bottles

While the world has transformed with technological advancements, the underpinnings of reputation management remain strikingly constant. The equation of Reputation = Behaviour + Communication holds as true today as it did decades ago. However, the immediacy of today’s communication landscape amplifies the effects of both components. While good behaviour can bolster reputation quickly, poor communication or, importantly a lack of it, can tarnish it just as rapidly.

Forward-Looking Communication

The onus is now on NATS, and companies worldwide, to recognise that stakeholder communication is not just a reactive tool for crisis management but a proactive strategy for reputation building. Engaging stakeholders during the good times, ensuring transparency, and creating a goodwill credit can be instrumental when navigating challenges.

In the words of one commentator, “It wasn’t an entire system failure. It was a piece of the system.” The same can be said for reputation—it’s not just about the behaviour or the product but the entire ecosystem of perception shaped by consistent and strategic communication.

Old Ideas – still relevant

The NATS incident underscores the perennial relevance of prioritising stakeholder communication, irrespective of a company’s perceived standing. The aviation word (and critically for NATS the UK Government) will wait for the independent report of the Civil Aviation Authority on the breakdown, but one thing remains clear: resting on past successes has never been an option. The “Bank of Goodwill” requires consistent deposits of trust, transparency, and constant promotion of the brand. This requires good behaviour and great stakeholder engagement. In the age of instant communication, the old ideas have never been more relevant.