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According to the article, Managing Reputation Risk, less than 15% of the organization feel they are fully prepared in the event of a reputation crisis

More than 26% of companies aren’t even sure how prepared they are. Warren Buffet, the Oracle of Omaha, once said, “It takes 20 years to build a reputation and 5 minutes to ruin it.”

Is Your Company Prepared for a Reputation Crisis?

The following graph shows how most companies feel about their readiness for a reputation crisis reputation crisis:

Source: Deloitte webinar poll, June 29, 2017

As the graph shows, more than a quarter of companies don’t even know about their readiness for a reputation crisis. That is some very startling data. But on the flip side, more than a quarter of companies feel that their process is improving. Although a lot of organizations feel they have some sort of a process in place, or that their strategies are improving, most businesses need to step up their game to be fully prepared. With under 15% of companies feeling that their reputation management is optimized, it’s time for a change.

Why is Reputation So Important?

Your reputation can boost your sales or close your business for good. It can either keep you afloat or cause it to sink quickly. Your reputation has complete control of your business. Although reputation management is extremely important, most people take it for granted. And the reasoning is largely in part of the processes needed to strategically plan. Constructing a reputation management team and implementing processes takes a whole lot of time and sucks out important resources in your company. Sitting down and talking through these plans can take days on end, and can distract your employees from focusing on other important tasks. But whatever it takes to pay more attention to reputation management, it should be a priority. Not only should you plan how you’re going to manage potential risks, but you should also plan what to do when a crisis does occur.

But the truth of the matter is, not many companies know how to get the ball rolling. They may have an idea of the importance of reputation management, but they aren’t sure how to get started or how to implement new processes.

The following graph shows why companies struggle to implement the right reputation management strategies:

Source: Deloitte webinar poll, June 29, 2017

As you can see, most organizations are uncertain how to manage reputational risk, while less than a quarter don’t know why it’s difficult. The first step is to get your organization more educated on what reputation management is and the necessary plan to have in place.

In order to prevent chaos when a reputation crisis happens, your company should take the following steps to be better prepared:

Look at the Risks From a Stakeholder’s Point of View

The stakeholders of your business are your most important assets. Whether they include customers, prospects, employees, investors, or the general public, understanding risks from their point of view will allow you to see the whole picture, which will allow you to create a proper plan of action that covers all aspects.

Recognize the Risks Early

One of the biggest factors in preventing harm to your reputation is taking care of the problems early. The faster you take care of a reputational crisis, the less harm it can do to your organization. With how fast word travels these days, the damage can be done within minutes. But if you properly plan and tackle the crisis early, your business could be saved from extreme reputational damage. Whether it involves developing more monitoring teams or sitting down with the CEO to talk about strategies, having the right processes in place is best practice for staying protected.

Structure Who’s in Control of Reputation Management

Having the right structure in place is extremely important for developing reputation management processes. The last thing you’ll want to happen is to not be prepared when a crisis does occur. More often than not, many employees will be responsible for reputation management steps in one way or another. Whether you have a specific team or have many employees covering different aspects of your reputation management efforts, having a clear structure will help prevent any misses along the way. More often than not, the CEO will be in charge of a company’s reputation management efforts. If not the CEO, the responsibilities may be passed down to the marketing or communications team.

The following graph shows a poll of who is typically in charge of managing an organization’s reputation:

Source: Deloitte webinar poll, June 29, 2017

Prioritize Reputational Risk

With the importance of reputational risk and reputation management, prioritizing these strategies should be a priority. Although it’s easy to get distracted and focus on other areas of your business, taking the time to implement processes and getting the right team members in place is key to the success of your business. With the kind of damage, a reputation threat has to your company, taking the necessary steps to preventing harm is best practice for protecting your organization.

Develop a Crisis Response Program and Practice

Creating a program to manage your reputation is very important for making sure everyone clearly understands their responsibilities. Furthermore, it’s vital that your team members practice this program so they’ll be prepared for when an actual crisis pops up. Although it may take time and resources for these processes to be implemented, taking care of all aspects and fully being prepared can save your business from complete destruction. The article, Managing Reputation Risk, states, “Companies can test processes and gain experience by running crisis simulation rehearsals based on the most critical reputational risks.” Practicing your most extreme risks will prepare your business for any threat that comes their way.

Execution

When dealing with reputation management, a threat can start small or come at you full force from the get-go. Having the right plan in place to help cushion the blow is vital. The article, Managing Reputation Risk, states, “During a crisis, there are commonly two parallel priorities—containing and resolving the issue at hand, and addressing short- and long-term reputational risk.” First and foremost, handling the current situation is obviously most important, but properly preparing for the risks that follow also holds great importance. After a crisis happens, the consequences can last for weeks or even years. It’s important to have a recovery process in place so everything can run as smoothly as possible.

Managing your reputation risk can be a long and annoying process. From finding the right team to manage your reputation to executing a plan once a crisis does occur, all the proper steps are very important for the reputation of your company.

Source: http://deloitte.wsj.com/cmo/2017/07/24/managing-reputation-risk

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