Reputation: Top Strategic Risk Concern for Companies
A recent study conducted by Forbes Insights on behalf of Deloitte shows company reputation and the fallout from reputational damage as the number one strategic risk for large companies, surpassing business model and economic trend concerns. The driving factor behind this shift in concern is social media.
The Social Media Opportunity
Utilizing Facebook as a public relations outlet during a time of crisis can improve the overall image and public opinion of the organization in crisis.
Scandal Brings an End to 168 year-old ‘News of the World’
The empire that Rupert Murdoch built continues to crumble a bit as the Murdoch-owned British tabloid, News of the World, remains under fire for allegedly hacking into the voicemail of many public figures and other subjects of its reporting. The 168-year-old tabloid announced that it would shut down amidst the scrutiny and allegations it has received for the past five years. The move was a scramble to salvage what was left of the tabloid’s reputation. James Murdoch, son of Rupert Murdoch and chairman to News Corp, was quoted as saying, “News of the World is in the business of holding others to account. But it failed when it came to itself. Wrongdoers turned a good newsroom bad and this was not fully understood or adequately pursued.” Once seen as an asset to its parent company, News Corp, the tabloid’s reputation has reversed itself at lightning speed. The statement made by Murdoch, along with other efforts such as donating the tabloid’s profits to charities—however carefully calculated; serve as last ditch efforts to regain the integrity lost by the brand. Reputation is not the only facet of the company impacted by the scandal. After multiple firings, the question still remains of where to place blame. While the dishonesty of those closest to the scandal—the reporters and editors, can certainly be held accountable, the Murdoch family itself and others at the head of the company are also being called into question. At least one of Rupert Murdoch’s current business acquisitions is in jeopardy because of the controversy. Murdoch was in the process of bidding on the satellite broadcasting company, BskyB before the scandal broke, but Prime Minister David Cameron’s office said the British government would vote to support a motion asking Murdoch to withdraw his bid. Whether it be the inability to provide adequate leadership for such a large corporation–or just pure negligence, it is clear that certain measures must be taken to ensure resilience from these types of scandals. The relentless mission of securing your assets, protecting your people and strengthening your brand is never a responsibility that wanes or can be delegated. Integrity starts and ends at the top – what are you doing today to protect your brand?
Congressman Weiner: What Can We Learn
In a digital age where information can be received and delivered instantly, many fail to realize that it is not as easy to retract–or suppress. So seems to be the case with former Representative Anthony Wiener who found himself at the hands of social media when he “tweeted” revealing pictures to a young female “follower” on the microblog, Twitter. With a slip of the mouse, Weiner’s pictures, intended to be private, were made public. When not careful, this is extremely easy to overlook as all Twitter posts are public by default. This is not the first time a public figure’s carelessness has been displayed on sites such as Twitter. The end results can be career-crippling. Weiner’s resignation serves as a reminder to us all that in 2011 it is becoming increasingly easier to broadcast yourself, and it is important to be aware of the image we are broadcasting. A fleeting lapse in judgement cause catastrophic consequences to one’s reputation, and ultimately career.
Target, Best Buy Provide “Lesson Learned” for Corporate World
By Rob Weinhold — As a result of the January Supreme Court decision which allows corporations to contribute unlimited funds for political activities, both Target and Best Buy each contributed $100,000 to a business group in Minnesota called MN Forward. MN Forward is an organization who advances political agendas in the spirit of private sector job creation and economic opportunity. The issue is that MN Forward used the funds from Target and Best Buy to help support the gubernatorial campaign of state Representative Tom Emmer, who supports lower corporate taxes. That wasn’t the problem; the issue, apparently unbeknownst to Target and Best Buy executives, was that Tom Emmer also supports the very controversial banning of same-sex marriages. Regardless of which side of the political aisle you sit on, corporations must fully vet each interest it supports and fully understand the risk while entering the political arena. As a result of this “alignment,” Target has now been the subject of immense stakeholder skepticism, protests, product boycotts and public apologies. Yes, this is a crisis that impacts brand and has now made national news – www.washingtonpost.com – August 18th. This blogger is neutral in his opinions about the political issues, but not middle of the road when it comes to the realization about the lack of strategic planning and foresight by both companies. Regardless of which side of the political aisle you sit on (perhaps it’s directly in the aisle), corporations must fully vet each interest it supports and fully understand the risk while entering the political arena. Most times, the support garnered with one group will alienate another group. And, the alienated group could well be very important stakeholders which could have enough clout to mobilize and impact the bottom line. CRO – Chief Reputation Officer This is yet another reason that I support the concept of a corporate CRO – Chief Reputation Officer. This executive should be fully engaged at every level within the organization and be the expert who accurately researches and predicts every internal and external decision’s impact on brand integrity. Organizations who do not continue to critically define, promote and defend their brand will never achieve ultimate growth and profitability goals.
What do Social Media and the Icelandic Volcanic Eruption have to do With One Another?
More Than You Might Think! by Gina Brelesky It has only been a few years since social media sites have gained wide audiences and already they are playing a vital role in helping organizations respond to crisis. They have been used to coordinate volunteer efforts, spread information, raise money, and save reputations. Unfortunately, not all companies take advantage of social media to effectively manage a crisis situation. Take for instance the difference between KLM (Royal Dutch Airlines) and Air France after Iceland’s volcanic eruption. KLM, almost immediately, launched an outreach campaign via their Twitter account and Facebook page. They were consistent in their updates with links to the latest information and answers to individual questions. Air France was another story. Their Web site, with official information, was rarely updated and had little instruction about how to rebook one’s flight. Their Twitter feed was eerily silent and the most recent post on the company’s Facebook page was from February, two months prior to the event. It was obvious that Air France did not really want to use these social and digital media channels during this crisis. While KLM embraced it, Air France chose to ignore it. The results were clearly visible in comments on their respective Facebook walls. KLM’s were generally favorable, with lots of people thanking them for their efforts. The Air France page contained comments from disgruntled fans that could not believe the company was doing so little to communicate with or help its customers. There is no question that KLM was more responsive to its stakeholders during a time of need. Chaotic events like the volcanic eruption present unique opportunities. I’m sure that the companies that grasp them will enjoy benefits long after the crisis has passed. While being stranded at an airport is never enjoyable, the goodwill created by KLM through Twitter and Facebook will continue. I suspect that for the Air France customers who went to social media channels for information, it will be remembered mostly as a frustrating endeavor. Tips for staying ahead of the curve in a crisis situation. So what does this mean for you? Here are some tips for staying ahead of the curve in a crisis situation: 1. Be Ready to Respond at Flashpoint. ~ In order to respond quickly to a crisis using social media you must have all of your assets in place. It takes time to set up the various channels for effective communication so plan ahead. Make social media part of your overall risk management plan. 2. “Didn’t See That Coming!” ~ That’s the problem – we never see it coming! Most of us don’t lay awake at night thinking “I wonder if anyone is online trashing my brand?” But let’s say someone is out there blogging away to the blogosphere some not-so-nice things about you, your company, or your brand. Who in your company is in charge of identifying what is going on? Who do they contact and who needs to be alerted? You need to have an alert procedure in place for a quick response. Don’t be the last to know! 3. “Tweet What? Huh?” ~ Social media is unlike traditional crisis management which might include procedures for press conferences and written releases. In the realm of social media you need to be ready to make multi-media content in a heartbeat. Who is going to do what, when, and how fast? If you need a video made and ready to post in the next few hours – who can do that? If you have to go through your IT department to make it happen the bloggers will have a field day with you! 4. “So That’s What All the Fire Drills Were About!” ~ Practice implementing your crisis communication plan. Use these times to refine what needs to be refined, change what doesn’t work and find things that do. The more you hone your plan, the better it will work in a real crisis. 5. Keep Your Ear to the Ground ~ Stay active on your social media sites. Develop relationships with fans and followers. Really listen to what they are saying and respond. Doing this consistently will build good will with your customers and get you known as someone who is willing to follow-up.
