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5 steps to prevent and prepare for reputational risk

October 2, 2017 by Jonathan Hemus

In our previous blog and recent webinar we explored how reputational risk presented new challenges for crisis management planning and crisis communication training.

Addressing the five areas below can help to reduce your vulnerability to reputational risk:

1)  Engage and align your crisis managers around reputational risk

Lawyers, security, risk and business continuity managers all play a vital part in crisis management. But their specialist expertise can sometimes blinker them from the true danger of reputational risk.  For example, in businesses where security professionals take the lead on crisis management, planning and training can be dominated by kidnapping, terrorism and insurgencies. I’m aware of one global organisation whose success is dependent upon the value of its iconic brand. But every crisis management simulation they run is focused on security incidents rather than the reputational risks which could do most harm to the business.

Make sure that your managers are aligned around the need to manage reputational risk as a business priority.

2)  Live and enforce your values

The biggest reputational risks often centre on corporate behaviour which contravenes the stated (or perceived) values of the organisation. VW’s emissions scandal was so damaging because of its position as one of the world’s most trusted automotive manufacturers. Identify the values which lie at the heart of your business and the risks which could undermine them.  Be scrupulous in recognising and rewarding behaviours which support your values; be ruthless in addressing behaviours (and people) which contravene them.

3)  Conduct regular reputational risk assessments

Conventional risk assessments can underestimate the significance of reputational risks (or in the worst case, overlook them completely). Make sure that as well as identifying operational risks (IT failure, fire, supply chain failure and so on), you also take time to tease out key reputational risks such as professional negligence, fraud, loss of key executives and customer service related issues. Look at your business from an ‘outside in’ stakeholder perspective to see the full reputational risk landscape. Assess them against your values to evaluate which could be the most harmful of all.

4)  Engage in scenario planning

Scenario planning is an important task when considering any risk but has particular relevance to reputational risks. Spending time as a senior management team walking through critical reputational risks focuses minds on their true potential impact. More than that, a well run scenario planning session can drive out actions to reduce the probability of the risk occurring in the first place.

5)  Develop communication contingencies

When reputational risks emerge, they must be addressed quickly and appropriately. Without forward planning, your response is unlikely to be pitch perfect. Based on your reputational risk assessment and scenario planning, work out which stakeholders you might need to communicate with and how, then pre-prepare ‘in principle’ messaging, statements, tweets and briefings. When your reputation is on the line, thorough crisis management planning and preparation can make a huge difference to the speed and effectiveness of your response.

Every organisation has its own unique risk profile, but no one is immune from reputational risk. Understanding the potential impact of reputational risk and taking steps to mitigate it through crisis management planning and training is essential if you are to protect one of your most valuable assets.

 

reputation management in a crisis

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