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Discovery beats PnP

Nov 05 2014 07:14
*Solly Moeng


Company Data


Last traded 61
Change 2
% Change 3
Cumulative volume 347039
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 81
Change 4
% Change 5
Cumulative volume 335940
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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QUITE a handful of South African corporate brands employ serious, no-nonsense internal reputation watchdogs who are well-armed with experience and an acute understanding of what to do when corporate reputation comes under attack.

They must also enjoy access to the required tools of trade and adequate finances when needed. In fact, good reputation managers do not wait for attacks to happen. They spend time scanning their brand environment for potential threats to corporate reputation and put measures in place to either prevent attacks on brands or minimise the impact any attack might have, should this be sprung on them in the stillness of the night.    

Those who fail to arm themselves are often found wanting when corporate reputation assaults happen. Their response to threats is either non-existent - leaving the field in the control of negative conversations that dig them deeper into reputation quicksands - or too delayed; waiting too long before springing to action, hoping that the issue will soon go away.

It seldom does. In this era of information overload, customers and other stakeholders may have reduced attention spans but they never forget. Increasingly, many choose to vote with their feet, taking their money and goodwill elsewhere.

Pick n Pay loses the plot

Let us contrast Pick n Pay’s [JSE:PIK] response to recent criticism over the sponsorship of a music festival in which right-wing Afrikaans musician Steve Hofmeyr – a known apartheid denialist – is a participant, to how Discovery Health [JSE:DSY] came out guns blazing to face attacks from law firm Ronald Bobroff & Partners.

In its case, Pick n Pay first hoped that observers would mentally quarantine the toxic Steve Hofmeyr from the rest of the festival, only mentally. Their response was a trial and error attempt at surgically separating the cancer, Hofmeyr, from the affected limb, the music festival, hoping that observers would buy into it.

When this failed, the retailer issued a statement through which it switched to victim-mode, claiming not to understand why it was being targeted for sins committed by someone else. In its statement, it professes to “totally reject Steve Hofmeyr's comments on apartheid. They have no place in South Africa”.

It goes on to say that it is “saddened that, in opposing these offensive comments, some people have chosen to make [it] a target.  They will have to explain why they feel it right to attack an organisation which has no relationship with Steve Hofmeyr, and which has an exemplary record in opposing injustice, rather than addressing their concern to the person who caused the offence. We have [been] got caught up in this issue… we do not have any influence over who performs at these concerts…”

After failing to rally sufficient goodwill even in this second gear of its trial and error approach to reputation management, the retailer quickly added a third gear, promising to only ‘reconsider’ future sponsorships of the concert. The current sponsorship will go ahead. The retailer will not insist that the organisers take responsibility by removing the cancer from the limb, failing which there would be no sponsorship from it.

Hoping that its “past opposition to injustice” offers sufficient reputation credit to shield it today - when it supports an event that is being used as a Trojan horse by a self-declared apartheid denialist - is pure cowardice on the part of Pick n Pay.   

Discovery Health, on the other hand, would have none of it when Ronald Bobroff, of Ronald Bobroff & Partners, accused it of not adequately informing its members of the scheme’s rules in regard to accident claims. This came after Discovery tried to implement its rule – in line with industry standards - that if a member or dependant receives compensation from the Road Accident Fund (RAF) for medical expenses, the member must then refund those amounts previously paid by the scheme for the member’s medical expenses.

Telling the whole truth

This is done to avoid the member being unjustly enriched at the expense of the scheme by receiving double compensation for the same health event. The law firm contends that Discovery Health has no right to implement this rule because of its failure to communicate it adequately to its clients.

The medical scheme sprang into immediate action, sharing relevant industry regulations, company policies and standard communication to members on the issue, as well as details of its history with the ‘aggrieved’ law firm. Additionally, armed with an arsenal of recent court decisions against Ronald Bobroff & Partners – apparently two court orders and almost 20 counts of unprofessional conduct and breaches of ethical duties by the Law Society of the Northern Provinces - the medical scheme followed the most crucial and fundamental rule of reputation management: ‘tell the whole truth as early as possible’ and avoid being on the back foot.

Ronald Bobroff did himself no favours when he started shooting from the hip at anything that moved, including, apparently, journalists who wanted to get his side of the story. His erratic behaviour, contrasted to Discovery Health’s clearly calculated response, left the medical scheme defeating Bobroff’s attempted assault on Discovery’s reputation.  

 - Fin24
* Solly Moeng is brand reputation management adviser and CEO of strategic corporate communications consultancy DonValley. Views expressed are his own.

pick n pay  |  discovery  |  solly moeng  |  brands


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