Managing risk to protect your reputation

A great reputation is a hard-won and highly-valuable commercial asset, underpinning opportunities for growth.  A poor reputation, on the other hand, always wounds and sometimes even major brands cannot survive the damage it causes.

A sudden crisis, badly handled, can cause a previously-strong reputation to collapse almost overnight and threaten future profitability. History is littered with the corpses of major corporations and small businesses alike that didn’t handle an incident competently or with communication as one of the bedrocks of their response.

Just look at the mess experienced and savvy Starbucks has got itself into in its communications handling of its’ UK tax affairs? Their reputation became a veritable seasonal snowball, bowling ever-faster downhill.

I am guessing whoever was responsible for the #spreadthecheer live tweet board at the National History Museum wishes they’d requested more robust moderation for the project!

spreadthecheer screen

Most businesses now take reputation risk seriously and it is fast-rising up the Board agenda. A recent study recently highlighted that, for 57% of businesses, reputation now comes top of their risk agenda.

But whilst it seems inconceivable that any business would leave the fate of one of their most valuable, yet vulnerable, assets to chance, some 14% of organisations claimed to be spending less time on reputation risk and crisis preparedness than before, which strikes me as extremely foolhardy.

An industrial accident, fraud, a negative comment in front of media or investors, poor customer service, product recalls, a controversial employee tribunal…the list of potential crises is almost endless – and often totally unpredictable.

But whilst you can’t prevent a crisis, you can stop it turning into a catastrophe.

If businesses take the time to identify the potential reputation risks associated with their particular industry or operation, document a robust crisis communications process and test it thoroughly, with challenge and support from seasoned crisis communication experts, they would get the chance to make their mistakes in the privacy of the training room, rather than under the spotlight of a real incident, when how they react could influence the very survival of their business.