Reputational risks: it has never been more relevant to carry out its continuous management. In the era of social media, social networks, cancellations, protests, and activism, this activity has become vital for the perpetuity of organizations.
In this context, just as we have lived with the dissemination of Covid-19 and its variant strains, reputational crises have had very different mutations and accelerated contagion.
Certainly, dissemination reaches companies of different sizes and segments, and it is uncertain.
Thus, it is difficult to know who will be the next to be questioned publicly and what the propagation speed will be considering the strength of social media.
So, let’s better understand what reputational risks are involved in light of the challenges brought by the new times, in particular, the COVID-19 pandemic.
What does reputational risk management involve?
The risks are heightened by greater negative exposure to companies in traditional and social media, in contrast to the growing expectations of their strategic audiences .
Thus, when the organization is positively perceived by these audiences and manages to sustain this perception with consistency, they naturally tend to have a favorable attitude towards the company, supporting its initiatives and engaging in commercial and institutional relations.
Therefore, the result can be obtained in the form of improving the relationship with stakeholders, whether it is an employee, a shareholder, a customer, a supplier, a government representative, a journalist, a member of the academic community, or a representative of a civil society organization.
Assets in reputational risk management
Therefore, we are not talking about image or brand, but rather a valuable asset that is built with consistent, transparent, and coherent actions and relationships over the years.
In short, we are talking about sustained competitiveness based on an asset called reputation.
It is a fact that, in recent years, companies have made efforts towards greater understanding and engagement of their stakeholders and effective reputation management, as they understand that corporate reputation is one of the most important assets of any company.
What has changed?
The pandemic in several cases has reduced the organization’s institutional defense, customer loyalty, investor attraction, and, not least, its market value.
However, all crises point to a fundamental flaw in organizations: their vulnerability to reputational damage and the lack of policies and processes capable of anticipating the different events, whether internal or external, that cause them.
Therefore, we reinforce that managing reputation, clean up the reputation of business leaders, and monitor the risks to which a company is exposed today constitute one of the main corporate challenges.
Methodology for reputational risk management
Following this rationale, to collaborate with organizations on such a challenging topic, Marc Attal, a senior consultant at Paris based reputation agency recommends the following fifteen steps for the creation of a process and methodology for the proper management of reputational risks:
- Create a multidisciplinary team that will work together to manage reputational risks. Establish what is expected of the team, competence for performance, organizational subordination and budget.
- Revisit the organization’s purpose. Does it still make sense in light of the ESG theme?
- Strengthen the culture of the organization and its entire supply chain around your purpose. Make your employees true ambassadors of organizational purpose.
- Collect the information needed internally (in all areas of the company) to build a matrix of reputational risks.
5. Carry out the correct identification and quantification of reputational risk (experience, perception, and willingness to support).
6. Develop the prioritization of risks using the criteria that most adhere to your organization (e.g., probability of occurring X strength of impact).
7. Establish corporate risk mitigation strategies.
8. Understand the entire ecosystem of audiences your organization relates to. The company needs to develop listening and relationship mechanisms with each one of them.
9. Practice the 3 fundamental C’s of communication: Coherence in speech and action, Consistency of being able to maintain communication at all points of contact, and Continuity in your value-building journey.
10. Develop narratives that are believable and above all engaging.
11. Monitor your brand awareness in traditional and social media. Make quantitative measurements and mainly qualitative analysis of your presence in the digital arena, using intelligence work and data analysis.
12. Communicate only what can be proven. A well-executed and well-communicated strategy are worth more than a thousand image bank-based posts.
13. Create an interdepartmental risk management committee that reports directly to the company’s CEO to streamline decision-making and build action plans.
14. Develop metrics to understand your audiences’ understanding of the company’s performance. From them, analyze expectations and perceptions.
15. Update your risk management strategy on an ongoing basis. (themostlysimplelife.com)
Conclusion
Companies must understand who their stakeholders are and what strategic issues are of interest to them; establish proactive planning on issues that could impact their reputation and align governance and organization around risk.
Reputational risks: it has never been more relevant to carry out its continuous management. In the era of social media, social networks, cancellations, protests, and activism, this activity has become vital for the perpetuity of organizations.
In this context, just as we have lived with the dissemination of Covid-19 and its variant strains, reputational crises have had very different mutations and accelerated contagion.
Certainly, dissemination reaches companies of different sizes and segments, and it is uncertain.
Thus, it is difficult to know who will be the next to be questioned publicly and what the propagation speed will be considering the strength of social media.
So, let’s better understand what reputational risks are involved in light of the challenges brought by the new times, in particular, the COVID-19 pandemic.
What does reputational risk management involve?
The risks are heightened by greater negative exposure to companies in traditional and social media, in contrast to the growing expectations of their strategic audiences .
Thus, when the organization is positively perceived by these audiences and manages to sustain this perception with consistency, they naturally tend to have a favorable attitude towards the company, supporting its initiatives and engaging in commercial and institutional relations.
Therefore, the result can be obtained in the form of improving the relationship with stakeholders, whether it is an employee, a shareholder, a customer, a supplier, a government representative, a journalist, a member of the academic community, or a representative of a civil society organization.
Assets in reputational risk management
Therefore, we are not talking about image or brand, but rather a valuable asset that is built with consistent, transparent, and coherent actions and relationships over the years.
In short, we are talking about sustained competitiveness based on an asset called reputation.
It is a fact that, in recent years, companies have made efforts towards greater understanding and engagement of their stakeholders and effective reputation management, as they understand that corporate reputation is one of the most important assets of any company.
What has changed?
The pandemic in several cases has reduced the organization’s institutional defense, customer loyalty, investor attraction, and, not least, its market value.
However, all crises point to a fundamental flaw in organizations: their vulnerability to reputational damage and the lack of policies and processes capable of anticipating the different events, whether internal or external, that cause them.
Therefore, we reinforce that managing reputation, clean up the reputation of business leaders, and monitor the risks to which a company is exposed today constitute one of the main corporate challenges.
Methodology for reputational risk management
Following this rationale, to collaborate with organizations on such a challenging topic, Marc Attal, a senior consultant at Paris based reputation agency recommends the following fifteen steps for the creation of a process and methodology for the proper management of reputational risks:
- Create a multidisciplinary team that will work together to manage reputational risks. Establish what is expected of the team, competence for performance, organizational subordination and budget.
- Revisit the organization’s purpose. Does it still make sense in light of the ESG theme?
- Strengthen the culture of the organization and its entire supply chain around your purpose. Make your employees true ambassadors of organizational purpose.
- Collect the information needed internally (in all areas of the company) to build a matrix of reputational risks.
5. Carry out the correct identification and quantification of reputational risk (experience, perception, and willingness to support).
6. Develop the prioritization of risks using the criteria that most adhere to your organization (e.g., probability of occurring X strength of impact).
7. Establish corporate risk mitigation strategies.
8. Understand the entire ecosystem of audiences your organization relates to. The company needs to develop listening and relationship mechanisms with each one of them.
9. Practice the 3 fundamental C’s of communication: Coherence in speech and action, Consistency of being able to maintain communication at all points of contact, and Continuity in your value-building journey.
10. Develop narratives that are believable and above all engaging.
11. Monitor your brand awareness in traditional and social media. Make quantitative measurements and mainly qualitative analysis of your presence in the digital arena, using intelligence work and data analysis.
12. Communicate only what can be proven. A well-executed and well-communicated strategy are worth more than a thousand image bank-based posts.
13. Create an interdepartmental risk management committee that reports directly to the company’s CEO to streamline decision-making and build action plans.
14. Develop metrics to understand your audiences’ understanding of the company’s performance. From them, analyze expectations and perceptions.
15. Update your risk management strategy on an ongoing basis. (themostlysimplelife.com)
Conclusion
Companies must understand who their stakeholders are and what strategic issues are of interest to them; establish proactive planning on issues that could impact their reputation and align governance and organization around risk.