Reputation risk to inform decisions

Grace Belger, Media Training Divisional Head at Meropa Communications says: The advent of social media has made access to information and the spread of opinions easy, which has led to increased transparency and connectivity amongst the public. This inevitably increases the risks associated with your corporate reputation. Analysing and preparing to deal with reputational risk is fundamental to an organisation’s survival during and after a crisis.

 The way people instinctively feel, act and behave towards your organisation reflects your reputation. Often perceptions don’t meet reality and you need to continually strive to narrow the gap and have your reputation match your reality in a positive manner.  Social and traditional media play a large role in extending the negative impact of a reputational crisis.

If someone feels positively about your company/brand, they are more likely to choose you above your competitors. Unfortunately, negative perceptions prevail over positive, which means that you have to work on your reputation consistently and strategically. The better your reputation, the better you will survive a crisis.

Millennials and the new Generation X and Y rate trust in a company higher than any other factor when choosing a brand. They believe the brand or company should touch them emotionally and make them feel special or they will switch to a competitor in a second. This also plays out in a crisis. If they are emotionally distrustful they will move on.In the increasing fight for survival, never mind profits, no company can afford damage to their reputation even in a small way. CEOs and management teams should handle a reputational crisis in the same way they handle a product disaster and often they don’t.

They tend to only think about threats that have already occurred and the most obvious risks. Their response becomes reactive and turns into crisis management in an attempt to contain the damage. They invest millions in risk assessment plans but little into crisis communications plans.

Elaborate control systems are in place for all the tangible threats and form part of all business processes. Reputational crises are often dealt with informally.

Pro-actively planning for a reputational crisis is half the battle won when it occurs. A company should carefully brainstorm each and every possible scenario or risk they could face that would potentially damage their reputation.

They also need to analyse the risks into those that are obvious: like an airplane falling out of the sky versus the insidious risks that creep up on you unexpectantly: a disgruntled customer on Twitter or little-known activist groups on social media who can create a viral campaign that can destroy your reputation in seconds.

Imagining the risk or scenario and planning how to communicate when they occur allows you to respond faster with the least amount of reputational damage. Sitting idle will result in wasted time as public outrage escalates. Some companies survive a crisis and start the slow process of regaining trust – some don’t survive.

Proactive reputation risk management has never been more critical than it is today. Preparedness is a must, with a plan that ensures agility in mitigating and addressing issues and responding appropriately and quickly to maintain the publics’ trust.   Once all possible risks are identified, the essential key is to plan for how you will handle them when they occur. While everyone is thinking about sending in emergency vehicles and calling the police, a dedicated team should be communicating with staff, the public and specifically with the media. Often a company will complain that they were tried in the court of public opinion via social media, but more often than not they ignored signs from stakeholders that expectations had changed and they should have anticipated the risk. They also didn’t have clear-cut communications plans to deal with the situation and keep stakeholders (including the media) informed.

Much of the process can be facilitated by drawing up a reputational crisis communications plan in advance. The key elements of the plan should include:

• Who makes up the team and how can they be contacted? Share this information with staff. There should be two teams in a crisis, a management team and a crisis communications team. The former for business continuity and the other to reach out to stakeholders. The CEO should be used in both.
• Outside experts such as reputation management consultants and IT experts should form part of the crisis communications team. They are removed from the issue and consequently more objective and rational in their strategic approach to handling it.
• Responsibilities need to be allocated well in advance and each team-leader needs to understand their role.
• Prepared holding statements (possible media statements and social media posts that keep the media and public informed during the crisis based on the risks that are identified up front).
• Prepared sets of questions and answers for each risk scenario. While this list cannot be exhaustive it will serve as a useful guide and should be constantly updated during the crisis.
• Extensive training workshops where the team as well as frontline staff are trained in handling communications. Frontline staff are often forgotten but they are the media and the public’s first port of call.

Often a company’s response to a crisis is more important than the incident itself. A recent study by Weber Shandwick (2017) showed that more than one-third of global consumers say that how a company responds to an issue or crisis today clearly impacts its integrity, credibility and trustworthiness. In fact, responsiveness to issues and crises is more important in driving perceptions of a company than what the media says (76 percent), what employees say (76 percent) and what the company says about itself – whether that is on its website (68 percent), what its leaders say (61 percent) or what exists in its advertising (61 percent).

Key factors to handling a crisis are as follows:

• Act fast. In the age of social media, you have seconds to respond and set the tone otherwise rumours and false news will fill the gap;
• Be honest and transparent.
• Show empathy – you can say sorry without admitting liability. The public can be extremely forgiving but they don’t appreciate a company with no empathy.
• Advise your audience at all times what you are doing to restore the status quo and deal with the fall-out of the crisis.
• Be wary of lawyers in the heat of a crisis. They tend to be conservative as they believe that everything you say must be completely accurate and not general should it be played back to you once a matter gets to court. What they don’t consider is that by the time you get to court your reputation is in shreds and will cost millions more to repair than any legal obligations.
• Be rational – humans react to a crisis with emotion and instinct which easily overwhelms us before our brains can make a conscious, purposeful decision.

Preparation and continuous maintenance plus scenario planning and training is essential to each and every organisation at all times. Failure to do so may put you out of business.