How to manage reputation risk
New research from Forbes has shown that companies across the world are implementing measures to improve their ability to manage reputation risk. The results of this survey highlight why crisis management has such an important role to play in company reputation management.
Reputation risk and business strategy
The Wall Street Journal reported that Forbes has conducted a reputation risk survey of 300 international companies on behalf of Deloitte Touche Tohmatsu Limited (DTTL).
Henry Ristuccia, the Global Governance, Regulatory and Risk leader at Deloitte Touche Tohmatsu Limited explained the significance of the poll’s findings. He said: “For many companies, reputation risk is increasingly being factored into business strategy.” He also suugested that ‘some companies’ “are going as far as developing an organisational culture where the strategy for managing reputation risk is constantly recalibrated in response to emerging information.”
Inadequate risk reputation programmes
The survey found that 57% of businesses questioned have invested in technologies to improve their handling of reputation risk. These technologies include analytical and brand monitoring tools.
The results of the poll illustrated why the majority of firms surveyed feel the need to invest in technology to strengthen their ability to handle reputation risk. 39% of respondents admitted that the maturity of their reputation risk programmes was “average” or “below average,” whilst only 19% gave their schemes an A grade for their ability to handle risk.
Crisis and reputation risk
Meanwhile, 36% of companies admitted that they don’t know how to prepare to handle the reputation risk of a ‘what if’ scenario. Rhoda Woo, Managing Director of Deloitte & Touche LLP’s Crisis Management Solutions for Audit & Enterprise Risk Services explained why this is such a significant finding.
She said: “A single big event, or a combination of small events, can trigger a major crisis that threatens the very survival of the business.” Woo went on to elaborate: “These critical situations expose an organization’s readiness and responsiveness, testing its values, leadership and character at a time when there is no room for error.”
Crisis management
Woo noted that crisis management is vital to negating the reputation risk of a major unexpected event. Crisis management is a process that a business or organisation uses to respond to a sudden emergency situation.
Woo commented: “An effective crisis management approach helps the organisation stay ahead of growing threats that have the potential to undermine the organisation’s business. It begins with identifying and preparing for strategic risks and includes a broad portfolio of capabilities such as simulation, monitoring, risk sensing, response and communications.”
Crisis and online reputation
I would argue that crisis management is critical in the field of online reputation management. Figures published by the Office for National Statistics (ONS) in August 2014 show that 38 million UK adults (76%) now use the internet on a daily basis. This represents a staggering rise of 21 million since 2006.
Meanwhile 74% of all UK adults use the internet to purchase goods or services. BrightLocal’s 2012 Local Consumer Review Survey found that 85% of consumers use the internet to find local businesses, whilst their Local Customer Review Survey 2014 discovered that 88% of consumers trust online reviews as much as personal recommendations.
This means that your company’s image online is vital to its reputation. A crisis is a huge threat to a business’ online reputation. It generates unwanted content such as social media posts, press articles and forum threads that are seen as trusted sources of information by Google. This means that they can show on the first page of Google’s results for a search of your firm’s name.
Tips for crisis management
This is why the Forbes survey shows that crisis management is vital to company reputation. Crisis management reacts to immediate unwanted content to ensure that said content doesn’t rank on the first page of a Google search for your firm’s name. Here are a few tips I believe you should keep in mind if you want to cultivate an effective crisis management strategy:
- Develop online assets: Crisis management depends on the creation of online assets such as social media profiles and blogs. If you optimise these assets and update them regularly with relevant content they can rank on the first page of a search for your name on Google and prevent unwanted content caused by a crisis from damaging your reputation online.
- Be proactive: If you create an asset in the aftermath of a crisis it’ll have a limited effect. You need to create and maintain assets ahead of time so they can prevent unwanted content spurred by a crisis from ever making its way onto the opening page of a Google search for your business.
- Monitor your search term: The sooner you find out that news of a crisis has hit the proverbial fan, the sooner you can start managing the fallout. You should set up tools such as Google alerts to monitor the search engine for mentions of your brand.
- Generate positive PR: Send positive PR to local, regional or national press on a regular basis. These will rank strongly on Google because the search engine sees news outlets as relevant sources of information. If you generate PR proactively, you lend the first page of a Google search for your name an element of protection against unwanted content generated by a crisis.
Companies need crisis management
The Forbes survey crisis management is key to managing reputation risk. A proactive crisis management plan can shield your online reputation from the unwanted content that can be generated by an unexpected crisis situation.
For more information on reputation management and crisis management please contact me on tel: +44 (0) 203 542 8689 or email simon@igniyte.co.uk in confidence.
