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Risks to your business’s reputation are a constant threat due to both external and internal factors. But with the right plan and internal controls, enterprise risks can be managed and the negative effects mitigated. Here are our top tips for dodging potential risks and saving your brand from an avoidable crisis.
Authenticity defines reputational risk. A company’s actions shape its reputation, so make sure yours are beyond reproach. Ensure the core values you espouse are rooted in your business model at an enterprise level. If those values are ill-defined, model them and make them operational. This includes getting senior executives on board.
To manage reputation risk at speed, you need to be prepared, so have a rational contingency plan in place. This goes beyond everyday customer service. To do this, you need to know who your stakeholders are, what’s important to them, and the issues most likely to make them view your company negatively.
Take a serious approach to managing reputation risk and do your due diligence in identifying it. WEF’s Global Risks Report 2019 ranked ‘massive data fraud and theft’ as the number four global risk by likelihood over a 10-year horizon. ‘Cyber-attacks’ came in at number five. The fallout of either can cause untold damage to a company’s reputation.
Adept handling of the aftermath can go a long way to mitigating reputation damage as events unfold. According to a report by AON, in the age of social media and a 24/7 news cycle, organisations have a five-day window to restore their reputations undamaged. Crisis communication must be instant, and global, reaching all stakeholders.
Not communicating effectively, or worse, allowing external parties to uncover the issue, results in more frequent, more damaging reporting of an issue. This prolongs the impact of the negative event. Carphone Warehouse, British Airways, Siemens and TalkTalk have all been criticised for failing to promptly inform affected stakeholders of an attack. They all experienced above-average decreases in their reputations as a direct consequence.
You need to protect your intangible assets. Giving up confidential client information through a data breach is guaranteed to harm your corporate reputation. It doesn’t matter whether you are culpable or not. Beef up your cyber security, keep security measures up to date, have a protocol for addressing attacks, and educate employees on how to combat them.
While monitoring external risks, don’t overlook those coming from within. A disgruntled workforce, vocal in their dissatisfaction, can be a major source of negative publicity. Being branded a bad employer will tarnish your reputation. Keep on top of HR, treat everyone fairly, monitor employee satisfaction, and debrief outgoing staff to establish what could be done better.
Knowing where reputational threats are coming from is the foundation of a risk assessment for your business. Forewarned is forearmed, and makes the difference between desperate crisis management and controlled risk management. Effective business intelligence analysis provides insight-driven foresight, enabling you to spot any warning flags.
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