Almost 80% of the 200 global organizations surveyed, believe the focus on reputational risk in their business will only increase in the coming 5 years. Organisations of all types in the changing world should foresee for a holistic risk management approach – emerging risks like fake news, social engineering and perception manipulation in maintaining corporate value.
6 Ways to Manage Reputational Risk
1. Make reputational risk part of strategy and planning
It’s important to recognize the impact that reputation can have on success. Investigate weaknesses and determine relevant reputational attributes within the organization. Brainstorm potential scenarios that could damage public perception with employees at various levels, as they may have unique contributions.
Determine indicators and warnings for each attribute so you will know when to take action. For example, customer complaints about the cleanliness of a restaurant indicate that standards need to be raised before it becomes known as an unsafe place to eat.
2. Control Processes
Standardization, technology, policies, and procedures reduce the likelihood and severity of events that could cause reputational damage. By focusing on consistently supplying quality products and services, it’s much less likely that there will be a harmful mistake.
If something does happen, you can lessen the extent of reputational damage by explaining measures you had in place to prevent the incident and how you’ll prevent it from happening again. Carefully select third parties to work with and treat employees fairly to avoid scandals on the external front
3. Understand all actions can affect public perception
The board and top management must recognize the importance of reputational risk management, and middle managers must lead by example to promote positive messages to key stakeholders.
Organizational training, policies, and procedures can ensure that all employees know how to behave and respond appropriately in any situation. When reputation is at risk, employees must act quickly and responsibly while doing anything within their power to positively influence public ideas.
4. Understand stakeholder expectations
When you know what client expectations are, it’s much easier to meet them. Don’t try to set expectations too high by promising offers that you cannot follow up on — this will backfire when you become known as an organization that cannot live up to its word. Teach what customers, shareholders, and employees expect from the organization and management, and strive to satisfy these conditions.
5. Focus on a positive image and communication
In all situations, it’s key to consistently send out positive communications. Over time, this will build up your reputation in the public mind, lessening the impact of future damages. Always inform clients and employees what’s happening and how you are responding to incidents in the organization or environment.
Customer service, transparency, good governance, and steady growth are some of the most important messages to convey. Obviously, you cannot always please everyone, so focus on satisfying your most important stakeholders first. We’ll discuss the impact social media can have on communications in a later blog post.
6. Create response and contingency plans
If the worst happens, your organization must be prepared to respond quickly and appropriately. Every minute that goes by can be crucial and reduce the respect the public has for your organization and its managers.
While seriously underestimated in some organizations, the risk that reputation presents is serious. It is a potential side-effect of any risk that can occur, so it’s crucial to monitor it. Without effective reputation management, it may take an organization a long time to recover from an otherwise minor incident.
For more information or advice, Premier would be happy to help! Our risk experts can help you manage reputational risk.
