A good reputation is earned not just by the excellence of the products and services an organization provides but by how it deals with matters when (not if) a problem arises. This is not as well understood as it should be. Here are 10 common mistakes I’ve seen made.

1 Turning a blind eye

Something goes wrong – an individual in a position of trust does something quite awful – but it is ignored because he (and it is usually a he) is senior or well-connected with clients or profitable. Or it is too difficult to deal with. Anyone who thinks about it consoles themselves with the thought that this is a “one-off” and that it won’t – surely? – happen again.

2 People can’t believe it

It does happen again. Sometimes with the same person. More often someone else does something similar. It’s a shock. So it gets ignored.

3 People refuse to believe it

“This can’t be happening” is the reaction. Dealing with this is going to be difficult and uncomfortable. Unpleasant action may be needed and no one really wants to do this, especially if senior management won’t back them. So they go into denial mode.

4 Something has gone wrong but it is only one or two rotten apples

These rotten apples are one-offs and not representative. There really is nothing to see here. What those comforting themselves with this thought always forget is the undeniable – if inconvenient – fact that it only takes one rotten apple (if not promptly removed) to infect the rest.

5 The problems continue. It becomes clear it is not just one or two rotten apples.

But the organisation is still in denial or scared of what it might find. So stages 1 – 3 are often repeated.

6 A limited inquiry is carried out in the hope that this will resolve matters.

As it is limited, it won’t. There may be a token “resignation” of someone senior or the sacking of some unfortunate junior.

7 Senior managers become more concerned about protecting the institution’s reputation than dealing with what is wrong.

PR management becomes the tail wagging the dog in the hope that bad publicity will stop and stakeholders will be satisfied. The idea that reputation is based on the substance of an organization’s activities rather than how they are presented is forgotten or seen as hopelessly old-fashioned.

8 The non-apology apology

An apology which fails to say sorry to those affected or implies that they are over-egging it and which says a lot about the good people in the firm / sector / industry. What people want to hear is what is going to be done about the bad people who have misbehaved. The tin ear displayed for how the organization in question comes across is a direct consequence of the level of denial within it about the extent and seriousness of the problem it has.

9 Recognizing reality too late

Eventually … when the problems are too large to ignore, and the shareholders/politicians/regulators/courts are demanding action, a much more extensive investigation is done and remedial measures are taken.

Needless to say the cost, time and management effort involved is many, many times larger than it would have been had action been taken earlier.

10 Running out of time

Alas … the institution is dealing with the reputational (and other) fall out from the previous failures for a long time after it has cleaned itself up. Warren Buffet’s quote is on point here: “It takes 20 years to build up a good reputation. And two minutes to ruin it.”

A glance at recent news reports will give many examples of bodies which have followed this pattern. The financial sector is not unusual in this regard.

Take the police: not just the Metropolitan Police, the subject of the Casey Report last November and at least eight previous – and equally damning – reports, but the other four police forces also in “special measures”.

Or take the NHS Maternity Services: the recent report into Nottingham maternity services of at least 1,700 families harmed by inadequate care follows on from similar scandals at another five NHS trusts dating back to 2002.

Or take the Post Office currently embroiled in an inquiry into its use of the Horizon accounting system and its prosecutions of over 700 sub-postmasters, described as the worst miscarriage of justice in English criminal history. It is not just its failings leading to the prosecutions which are now an issue but also its failings in how it is responding to the inquiry into what it did and did not do.