Reputation now seen as top strategic risk, says Deloitte survey
P.S Will you join us at this event?– The Corporate Reputation Protection Master Class 28 – 29 November. For more info: http://goo.gl/7MNDlO
Reputation now seen as top strategic risk, says Deloitte survey
P.S Will you join us at this event?– The Corporate Reputation Protection Master Class 28 – 29 November. For more info: http://goo.gl/7MNDlO
Maybe you have wondered why you should attend Reputation Risk Management training. Well, I believe that it is quite simple. Someone in the organisation must champion the cause of why Reputation is an asset and a risk. Internationally these are Board responsibilities, but ultimately Management will be held accountable by the Board for the correct management or mismanagement of this intangible asset.
And, that is only possible if management has the necessary know- how. In the past there was this belief that this was solely the domain of PR, but with time there has been an understanding that Reputation needs a systemic view and approach. My Master Class on Protecting Reputation unpacks Reputation Risk and offers a number of distinct benefits to an individual and an organisation.
Here are my reasons:
10 Good reasons why you cannot, should not, will not miss attending the Protecting Corporate Reputation Masterclass:
1. Did you know that the good name and reputation of a company are priceless assets – sully your company’s name and it may never recover. ‘Goldman Sachs paid a fine of $540 million to the SEC to get the agency’s inquiry off the front pages,’ says John Alan James, executive director of the Center for Global Governance, Reporting and Regulation. ‘Its stock value was plummeting and its top clients were concerned. It was the same for all the big banks, which together paid $18 billion in fines to regulatory agencies in 2012.’ ‘A Company’s Reputation is its greatest asset and risk, and it should be protected at all costs’. Mr David Glass, ex – CEO of Wal – Mart. This course takes a close look at how to protect and defend this asset.
2. Warren Buffet, the world famous investor and richest man has on numerous occasions said these famous words: ‘It takes 20 years to build a reputation and 5 minutes to ruin it and if you understand this you will do things differently’. Why? Well, Mr Buffet understands that money can always be made, but that a reputation, once lost, is not easily restored. In fact, some studies show that it can take between 3.5 to 11 years to restore a damaged reputation. Want to prevent reputation damage before it even gets public?
3. Reputation Risk is regarded globally as a “meta risk – a potential menace to fundamental business strategy, and possibly an even greater hazard to organizational survival than a financial restatement or problematical findings in a compliance report”. Reports suggest that it currently rates as one of the world’s top 3 risk areas because of its volatility and difficulty to manage and mitigate, yet less than 43% of companies surveyed had a plan to deal with reputation risk both from a mitigation and reputation incident perspective. Question: Is your Company ready to deal with a Reputation incident? If you are not sure, take this survey – http://bit.ly/d5ej9s and attend to learn more tips and strategies to protect your organization.
4. As part of your company’s planning for crises and dealing with reputation risk, have you embedded Reputation Risk into your Enterprise Wide Risk Management system and have you defined reputation risk in 4 different ways so as to determine and implement different perspectives and mitigation strategies? Would you like some assistance with that process? I can guide you.
5. Did you know that this Class integrates best practice and thinking from many disciplines including Reputation Management, Public Relations, Risk Management, Corporate Communications, Corporate Responsibility and Strategic Management, and is a must attend for Corporate Affairs, PR, Risk Managers, Compliance Officers and any staff member responsible for maintaining and protecting a company’s fine reputation. Attend to get a systemic view of this asset and risk.
6. The damage of a reputational crisis can be direct and indirect. These costs could include penalties incurred because of a lack of legal compliance, litigation, media conferences and advertising costs, hiring of crises communication consultants. BUT what about the indirect costs, the effects on various stakeholders? The increased scrutiny leading to additional problems? The customers that do not return? Does your plan of action include both Reputation Incident and Reputation Erosion possibilities?
7. Do you know how to identify reputational risks including the gap between stakeholder’s perceptions/beliefs and the company’s actual performance, areas of vulnerability and current & emerging issues? Studies show that perceptions and concerns of stakeholders was an extremely or very significant issue, making Stakeholder Reputation Risk the highest-ranked challenge – This is one of the definitions we will explore.
8. What is your organization doing to prioritize reputation risks and assessing the probability and the impact of the risk on reputation? Reputation Risk is extremely difficult to quantify. What efforts are being made in your organization to quantify the value & risk of reputation. I will take a look at alternatives that exist inc. monitoring approaches
9. Did you know that you and your organization damage reputation through what you share? Reputations can be made or broken exponentially faster through the use of technological tools to which all stakeholders now have access for the first time. There is risk implicit here and Reputation Managers need to understand the velocity of Social Media risk. Does your Reputation Risk framework and Response plans take the impact and intricacies of Social Media into account? How should you respond to a blog attack?
10. Did you know that Protecting a company’s reputation is part of internal governance (in contrast to external governance policies and procedures which comply with laws and regulations), and is one of the most important responsibilities – if not the most important responsibility – of the board of directors. Research shows that Reputation risk is top of mind for directors.
The ultimate question then: Does your company have watchdog systems and a plan if it is subject to a reputational attack? It is the board’s responsibility, as part of risk management, to ask these questions and to make sure that the answers are sufficient.
The 2 – days will include sessions on how to analyse Reputation Risk using a Root Cause approach to develop ways on how to reduce and respond to reputation risk; How to Monitor and Measure Reputation using a 4 – pronged approach; How to Manage Reputation Incidents and Events using processes and techniques such as pro-activeness, communication and readiness prior, during and after a crisis; and will include information on How to Develop a Reputation Protection and Defence Strategy – based on international best practices and appropriate to your organisation.
More information available: http://wp.me/P2PQR-im
How often don’t we hear that sort of remark! And even worse, this: “We know that communication is a problem, but the company is not going to discuss it with employees (Excerpt from a Humour column – words uttered by an AT& T manager)”.
The issue is that were there is smoke there’s fire, and what organisations need to do is pinpoint the real cause of the communication problem. And that is dependent on proper communication diagnosis.
Let’s analyse this word Diagnosis: Diagnosis – The effective solution of organisational communication problems is dependent on a thorough diagnosis. In the absence of a thorough diagnosis, a person may apply the wrong solutions and this approach can lead to the prescription of treatments for ailments that do not exist.
Here is some guidelines for proper diagnosis:
In performing the diagnosis you should pay attention to this as well:
Remember that as a rule all communication interventions should start with a proper diagnosis.
This is what a proper Communication Audit can do for a company. Such an audit should ideally be performed by independent 3rd party experts, just like the annual financial audit.
Many Safety Managers use posters and pithy statements to communicate messages and raise awareness about the need to be safe, think safe and act safe.
In this messaging, choice of words becomes important. Standard messaging don’t always cut it.
Thinking out of the box, or using humour can help. I love this example:
Effective Evacuation notification:
Before Texas passed mandatory evacuation law, no one could be ordered out of their home.
A few years back when a hurricane threatened the Texas coast. A county sheriff issued the statement on local radio.
“If you are not evacuating, please paint in large numerals on you roof the number of people staying. That way we’ll know how many bodies to look for”.
Short and Effective. Love it.
Footnote: This quote illustrates why internal communication processes are crucial to prevent reputation risk and employee stakeholder uprisings. Many years ago whilst still in Corporate, myself and a colleague wrote an internal report that Management discarded. Months later they employed an international consulting group whose findings were 80% plus similar to our findings and recommendations. Be careful – never ignore the internal prophets.
Reputation at Risk – Does it still matter?
Yes it does, and latest international research backs this statement. Not only does it back the statement but the research also reveals a struggle to cope with, manage and mitigate this volatile risk.
For a long time, the debate has raged on. Is Reputation Risk a Strategic Risk or just a consequence of a risk?
Perhaps it is because of the misunderstanding that exist in management circles about it. Just because Reputation Risk is the domain of intangibles, does it make it so elusive that we leave it till it is too late, and then try and patch up the embarrassment with PR and fake apologies? Also, to treat it as a simple consequence is not adequate and indicative of the level of thinking that is needed to deal with it appropriately.
Often Reputation Risk incidents have been water shed moments for companies, necessitating whole sale changes to value systems and modus operandi.
In South Africa, there has been many reputation risk incidents that have damaged the names of individuals and organizations a like. We have had our share of naming and shaming, mamparas and Wikileaks moments.. From unauthorised usage of our airspace by the Gupta family to the huge Construction Industry fall-out and subsequent Competition Commission fines to court cases and huge expenditures on Nkandlagate. The list just goes on unabated, which certainly points to a lack of understanding to manage intangibles and perceptions, to manage reputation risk in the Southern African environment.
So, let’s evaluate some of the latest research findings in search of some answers and direction.
On the 15th July, an article appeared in the Risk Management Professional that was called “Is reputational risk management yesterday’s news”?. The article states that a new survey into the emerging professionalization of reputational risk management tells us quite the opposite. It then quotes the findings of a study from Schillings on reputation risk that brought together a group of key practitioners, including general counsel, communications directors, public affairs directors, group heads of risk and CEOs from over 150 leading public and private companies to try and move the debate forwards. After all, this is a shared concern, and as one general counsel at a FTSE100 company remarked: ’Reputation risk will always touch our business somewhere.’
On the 23rd July – ACE Research publishes the findings of their latest study ‘Reputation at Risk’, which was conducted across 15 countries within its EMEA (Europe, Middle East and Africa) region. This study found that “Reputation is the Hardest Risk to Manage. Their findings reveal that 92% of companies believe that reputational risk is the most challenging category of risk to manage.
This certainly ties in with a 2011 Deloitte report that found Reputation Risk to be a “meta-risk” – The Report stated that Reputation is an important factor across all four major risk areas of the Risk Intelligent Enterprise — strategic, operational, financial, and compliance — especially because it is a constantly evolving and fully embedded as part of the why and how a company achieves its objectives.
In May this year, The Compliance Week wrote and I quote: “After financial risk, reputation risk is the biggest concern that keeps board directors awake at night, according to the latest poll from EisnerAmper via Survey Says Boards Troubled by Reputation Risk.
Ace Research’s findings also revealed that while 81% of companies in the survey see reputation as their most significant asset, most of them admit that they struggle to protect it and identifies a number of key reasons why companies in the region often find reputational risk challenging to manage:
68% of companies believe information and advice about how to manage reputational risk is hard to find, compounding the sense of uncertainty and confusion about how best to manage it. This carries another element of truth. Without adequate stakeholder profiling and analysis, issues management and systemic thinking, incorrect mitigation might be the order of the day. No longer is PR the only preferred tool to manage Reputation Risk, what about Governance, Ethics and Compliance functions role and input?
56% of companies say social media has greatly exacerbated the potential for reputational risk to affect their business. This is the new world we are living in and it implies more scanning, monitoring and training.
And another report, “With CSR In Global Demand, Corporate Reputation Is At Stake”, (by Cone Communications And Echo Research) stated that CSR is no longer a nice-to-do, corporate social responsibility is now a reputational imperative – or liability. The study revealed in the 2013 Cone Communications/Echo Global CSR Study, that companies are expected to be an active participant – if not a driving force – in solving the most pressing social and environmental issues. Corporations that disregard this consumer-demanded role risk more than their reputation – nine-in-10 global citizens say they would boycott if they learned of irresponsible behavior. This report shows that CSR is now a direct driver of Corporate Reputation and major cause of Reputation Risk.
The Ace Research findings also proposes a number of solutions to adopt, including:
Companies need a clear framework for managing reputational risk.
Effective management of ‘traditional risks’ will help avoid reputational events, and management teams need to put in place a culture and instil a risk appetite across the company that will reduce the potential for crises to emerge in the first place. In addition, taking a multi-disciplinary approach that involves the CEO, PR specialists and other business leaders will also help to build the broader perspective that is necessary for identifying and managing less obvious reputational risks.
My thoughts: I found this interesting as this was the approach that I recommended to Vodacom when I assisted them with embedding Reputation Risk in their Enterprise Wide Risk Management system prior to their listing.These recommendations certainly shows up the Construction Cartel and the need for PR/Reputation Managers to be involved earlier in the risk management & mitigation process. It also implies that the help of OD/Organizational Behavior experts is necessary.
Companies should work harder at measuring how their reputation is perceived. Understanding perceptions of key stakeholders, their interplay and their impact on corporate reputation, is essential for tracking and managing reputational risk effectively. Companies must ensure that they are collecting an “outside-in” perspective to complement their own internal perspective.
Again I rest my case. I have been teaching this in my Stakeholder Reputation Management Master Classes since 2006.
Companies should sharpen up their crisis management plans to keep pace with today’s faster-moving world. Our research suggests that many companies may be over-confident in their abilities to respond to a crisis. Regular review and testing — including the incorporation of social media scenarios — will allow a faster response when disaster strikes.
Again I rest my case. I have been teaching and facilitating the need for Nano-Seconds Crisis Management Plans for a long time – even in China.
The insurance market can do more to help companies manage reputational risk. This includes the provision of more holistic solutions that include crisis response assistance. It also includes helping companies to take a ‘reputational lens’ to more traditional risks to evaluate the reputational consequences in each case. In this respect I work closely with Business Continuity and Health & Safety specialists to advise my clients.
Andrew Kendrick, President, ACE European Group, goes on to say:
“Reputational risk can be difficult to predict. However, some clear pointers emerge from our research as to the source of companies’ key worries. One of these is the globalisation of business, with complex supply chains, expansion into new markets and the challenge of maintaining consistent standards across multiple borders all giving cause for concern. The other noticeable theme is regulation. Post-crisis, compliance has taken on a new importance and businesses of all shapes and sizes are more keenly aware of its relationship to their corporate reputation.
“Insurance is not a panacea for the fast-evolving world of reputational risk. Nevertheless, I believe there is much that insurers and brokers can do collectively to help their clients. This includes the evolution of new more holistic insurance solutions that involve the input of crisis and PR specialists. More generally, professional risk engineering can help to improve risk management processes and governance, allowing clients to manage the more ‘traditional risks’ better and reducing the likelihood of a reputational event in the first place.“
The Schilling researchers asked respondents: ’How useful is your organisation’s formal risk management process when it comes to protecting corporate reputation?’
The response was mixed. On the positive side many communications directors and general counsel rated the risk process as ‘useful’. Interestingly legal respondents were significantly more likely to rate the process as ‘very useful’ compared with those from a communications background. Over 30 per cent of communications respondents to the survey felt that the risk management process was either ‘not useful’ or were unaware of such a process.
One risk manager we spoke to at a leading private company gave us an example of how things work when they are going well: ‘In terms of the communications team and reputation risk, it is dealt with in a high-level and strategic manner. The head of communications prepares incident scenarios. As a risk function we input to those scenarios. This helps to make sure that we have communications and incident response plans in place for our major reputational risks’” However, scenario planning is just one part of the picture.
I fully agree. Reputation Risk is inherent in everything we do. It can be positive or negative. But it needs a dedicated approach and robust thinking processes.
To assist leaders with their questions, struggles and issues I will facilitate a Protecting Corporate Reputation Master Class in Johannesburg from the 22 – 23rd August. This 2 – day training course will provide a deep dive into Reputation Risk and will equip delegates with the necessary competencies (knowledge, skills & attitudes) to protect and defend their organization’s most valuable asset – its reputation against potential threats, risk and potential damage, and is based on more than 25 years research and experience on how to protect business reputations.
The course weaves inputs from best practices in Reputation Management, Risk Management, Communication & PR, Crisis Management & Crisis Communication, Ethics & Corporate Responsibility to provide companies with tools and know-how to protect, defend and deal with reputation risk events of any kind, and should provide you with a strategic direction on how to manage reputation risk in your organization.
To find out more on how to register, click here.
The recent agreement reached between the Construction Industry and the Competition Commission for collusive tendering got me thinking. (15 construction companies had agreed to pay fines totalling R1.46 billion for collusive tendering).
What are the signs of impending and unavoidable doom in our businesses and why do we not see, sense them or hear about them? Surely there are signs or hints that there are trouble on the horizon?
Why do we not pick up on patterns of wrong decision-making in committees?
In the book the Alchemist Paul Coelho writes about the importance of omens – prophetic signs or significance. Omens are an indication or sense of what is to come; often the writing on the wall. The allusion is to the Book of Daniel in the Bible, in which a hand mysteriously appeared and wrote a message on Balshazzar’s palace wall foretelling his destruction and the loss of his kingdom.
In business, the signs come in many shapes and definitions.
Incidents. Issues. Near Misses. Rumours. Internal chatter. Suggestions. Complaints. Patterns. CCMA cases. Grievances. Internal Audit reports.
All Signs and Omens. What more do you need to act before there is whistleblowing or a Wikileaks?
A friend of mine once said: “ Watch out for the sleeping crocodiles in your business. Catch it before it gets you”
Ultimately these omens are all signs of possible reputation risk, if we define reputation risk as anything that might potentially damage the good name and reputation of an organisation. Signs that there might be an unwanted event or unwanted publicity around the corner.
To prevent potential damage to an organisation’s most valuable asset – it’s reputation, it is important to realise that the above signs are clear indicators of a need to create better and more robust internal communication feedback systems, better discussion and listening tools and instruments and corporate culture interventions.
Also read my post on You better be Awake: Searching for Vulnerabilities. In this post, I make the point that “To close the gap or feedback loop I would certainly urge Reputation managers to establish close links with the Risk Department, Internal Auditors and Compliance Officers in the organisation. Often these are the individuals that uncover areas what I would call smouldering crises – any serious business problem which is not generally known within or without the organisation, which may generate negative news coverage and reputational damage if or when it goes “public” and could result in fines, penalties or unbudgeted expenses, loss of business and destruction of relationships.
In ancient times, a King had a boulder placed on a roadway. Then he hid himself and watched to see if anyone would remove the huge rock. Some of the king’s wealthiest merchants and courtiers came by and simply walked around it. Many loudly blamed the King for not keeping the roads clear, but none did anything about getting the stone out of the way.
Then a peasant came along carrying a load of vegetables. Upon approaching the boulder, the peasant laid down his burden and tried to move the stone to the side of the road. After much pushing and straining, he finally succeeded. After the peasant picked up his load of vegetables, he noticed a purse lying in the road where the boulder had been. The purse contained many gold coins and a note from the King indicating that the gold was for the person who removed the boulder from the roadway.
The peasant learned what many of us never understand – “Every obstacle presents an opportunity to improve our condition.”
Here’s a question for you – When last have you conducted a dry -run or have had an independent audit of your hospital group’s crisis plan – its communication management and emergency action plans? Especially with the media furore and presence at Nelson Mandela’s hospitalisation and with the proliferation of social media tools and mobile phone technologies.
The Star newspaper reported that “jumpy journalists thronged outside the Pretoria Hospital where the icon is being treated…they also reported that Security had to be beefed up” Other Hospitals can learn from this. With more and more politicians and celebrities visiting South Africa, this is likely to happen more often.
Crises can result in unplanned visibility that can affect the standing of a Company in the eyes of its stakeholders. That’s why an audit of a Company’s crisis plan is as vital as regular financial audits.
A crisis can strike a Business at any time; and during this crisis a Company’s image and reputation can be damaged significantly. Often, this can be a result of not responding adequately to media and other stakeholder enquiries. Understanding what Communication challenges may arise during a crisis or before one occurs is therefore critical.
No Company, organisation or individual whose livelihood depends on public support can therefore afford to function without a crisis communication plan. Yet, many organisations still have no such plans. Many companies say they need it but think that with positive thinking and hope the inevitable will never occur. The reality is that Crises are often unavoidable. What is avoidable is being ill prepared. After all, Noah built the Ark before it rained. And, how is it possible that some companies find opportunities in the time of crises, while others succumb to the danger.
The secret is that they have a well-prepared and tested Crisis Communication and Management Plan and that all the staff, including those who will deal with the media are well trained, ready to face the crises.
Who in your organisation has had the responsibility and decision making authority to create and implement an effective crises communication plan, decide when and how to initiate media coverage – and when not to-, what to do once a crises does occur and how to ensure that the media tells your side of the story?
Does your plan cover the:
Organisations such as Hospitals should begin their crisis plan with a vulnerability assessment in which the crisis communication team looks at the likelihood of certain kinds of crises and assesses the organizations ability to respond. Below are listed some common crises with categorisation.
Most hospitals may be best prepared to accommodate Class A and B crisis, spurred by legal requirements. However, many may be less able to manage class C, although preparation for Class A and B may ready the institution to manage its own “disaster.” However, few hospitals may be properly prepared for Class D.
The value in grouping crises is in providing a potential list of scenarios for which the hospital may prepare and document their crisis contingency plan.
Every hospital in a group should be prepared to deal with emergencies (other than that by the Casualty department). It is well known that the best way to prevent the spread of remorse and misinformation is by issuing factual information as soon as possible. At the same time, a hospital must protect its own interests and the patient’s right to privacy then relay factual information in an orderly, controlled manner.
That is why the hospital’s crisis communication plan should outline a procedure for communication with the media and other stakeholders. That is why your hospital’s emergency plan and crisis communication plan should be combined and tested.
An audit and benchmarking exercise could reveal opportunities for improvement and/or provide the assurance that everything is in order.
There are few kinds of organizations for which PR is more important than hospitals.
Hospitals must constantly strive to earn and keep a good reputation among doctors, patients, donors (if charitable), other funding sources and broad community leadership. If a hospital is not perceived by all stakeholders as providing quality care in a responsible manner it will fail. Because of the diversity of audiences, hospital PR must address a wide range of concerns and convey information at many levels of detail. Hospital PR also has a role in supporting the satisfaction and effectiveness of employees who perform critical tasks under difficult conditions.
Hospitals are typically among the larger institutions in their communities. Therefore, almost everything they do or say is potentially important and/or controversial. Public relations should be involved at the highest strategic levels of hospital management to help guide decision-making in ways that will help accomplish long-term goals.
My one blog article – https://deonbinneman.wordpress.com/2010/06/24/an-untested-emergency-response-plan-is-a-source-of-reputation-risk/ may also spark more debate about this.
You might also be interested in this information from my blog – I have my own product which is really a primer for starting the process of developing a crisis plan in a company – see http://deonbinneman.com/services/products/how-to-write-a-crisis-plan-toolkit/ and my blog post https://deonbinneman.wordpress.com/2009/05/26/how-reputation-event-crisis-ready-is-your-organization/ that could stimulate thoughts in this regard.
Anyway, I just thought that you might find my post and questions – thought provoking. Please access my blog for more information.
(This comes from a South African male – working with multiple audiences including women across many industries for 17 years (Who many years ago trained SA Armed Forces in Buddy Aid – how to use everyday materials to render first aid when you do not have specialised equipment MacGyver style, who has facilitated hundreds of Health & Safety & Crisis Management workshops)
People often feel helpless and fearful in some difficult situations. The reason – Lack of Knowledge. Some become arrogant in order to hide their lack of knowledge.
The antidote to fear is knowledge. Knowledge of your strengths and weaknesses and ignorance. Knowledge of what to do in difficult situations.
Example – Scared of being hijacked by kidnappers. Attend courses facilitated by your local Police or Defence Agency. They often do this as Community Outreaches – for free.
Example – Danger of a loved one dying. Empower yourself with knowledge. Attend First Aid Training. You never know when you may need to save a life.
The point I am making is that often we are afraid because we have not made the effort to analyse a situation and equip ourselves with knowledge and skills. I mean do you know how to use a fire extinguisher, or do you even have one at home?
So here is a tip. Before you do anything, free yourself from the shackles holding you back. Attend some creativity workshops – These will enable you to think outside of the box, and is in fact some of the most important learning experiences you can ever attend.
As George Bernard Shaw said: “Some people said why, but I said why not”
After financial risk, reputation risk is the biggest concern that keeps board directors awake at night, according to the latest poll from EisnerAmper via Survey Says Boards Troubled by Reputation Risk – Compliance Week.
These days Reputation Risk is a a real threat or danger to the good name or standing of an organization due to the immediacy of the sharing of negative information and the impact of Social Media.
For a long time experts debated whether Reputation Risk was a strategic risk or a consequence of a risk.
What has become clear though is that it is now a“Meta risk – a potential menace to fundamental business strategy, and possibly an even greater hazard to organizational survival than a financial restatement or problematical findings in a compliance report”.
Reputation risk can occur through a number of ways: directly as the result of the actions of the company itself; indirectly due to the actions of an employee or employees; or tangentially through other peripheral stakeholders, such as joint venture partners or suppliers.
In addition to having good governance practices and transparency, companies also need to be socially responsible and environmentally conscious to avoid reputational risk.
This importance has been confirmed through a recent report “With CSR In Global Demand, Corporate Reputation Is At Stake”, according To New Research From Cone Communications And Echo Research: PR Newswire (http://money.msn.com/business-news/article.aspx?feed=PR&date=20130522&id=16510227#scpshrjmd)
This must – read report shows that CSR is now a direct driver of Corporate Reputation and major cause of Reputation Risk.
Many organizations fall into the trap of always believing that Reputational Crises are caused by Bad Publicity.
This could not be further from the truth. All Crises or incidents have a root cause, a catalyst that sparked it. Often we only encounter it when it appears in the spotlight.
In a must read in Forbes Bad PR Isn’t Causing PetroChina’s Reputation Crisis – Forbes a lot can be learned.
Reputational Crises have stakeholder impact and influence.
I would take this article and circulate it to all Executives and Management. Then as an Organizational Learning/OD exercise I would ask them to read my post http://deonbinneman.com/2012/08/04/executives-need-to-learn-a-new-style-of-decision-making/
Reputation Risk is rooted in poor decision-making.
Yes, you do. Through your actions, performance, behavior and insight you can add to or subtract from that fine reputation.
Are you adding or subtracting??
About 11 years ago I was asked to do a presentation on the importance of Crisis planning at a local university. My presentation really hit the mark and soon i was asked to advise on the writing and development of this plan.
What really got Senior Management talking was my Siamese twins approach. I have always been of the opinion that a Crisis plan needs to address both the perceptual and reality elements of a crisis. Thus it is not sufficient to just have a communications plan, an Integrated plan is needed.
Anyway, I was clearing out some of my archived files when I saw this caricature done that day, about yours truly in action. Never thought I would look like the late crocodile – ‘”Die Groot Krokkedil” – The late SA State President – P.W Botha” who used to use his finger in a liberal manner. Unintentional in the least, although I was adamant in getting my message across. The days when I still had hair.
Nice drawing though, HAHAHA!
( A caricature is a simple image showing the features of its subject in a simplified or exaggerated way. A caricature is the satirical illustration of a person or a thing, but a cartoon is the satirical illustration of an idea, according to Wikipedia.
Lately I have seen quite a few advertisements for Government Relations Managers that blatantly requests that applicants must have the right contacts.
As if this was all that Government Relations is about. In my opinion Government Relations is much more than networking. It is about listening, engaging, communicating, lobbying, proposing and ultimately presenting your organisation’s case in a favourable manner.
Crucial to understanding the Government stakeholder is knowledge of the geo- political landscape and issues like Protocol and the time it takes to make decisions e.g. the brown paper, green paper, white paper, Bill and eventually legislative process.
In order to meaningfully engage with the Government Stakeholder it is vital that organisations understand the What, Why and How.
Why Build Relationships with the Government?
Increasingly regulators (Government & other bodies) are becoming highly significant stakeholders in organisations. Often they have considerable influence over the conduct of the organisation and the way in which it operates.
Assessment of regulator satisfaction indicates how well the organisation understands and interprets the regulator’s requirements and acts to satisfy them. These assessments will prevent situations such as the recent case of ICASA versus Wireless Business Solutions– that turned ugly when the regulator aided by the police service, raided the telecommunication company’s premises in Johannesburg, where it seized radio equipment that included core fibre switches, vital to the running of its business services. WBS had to go to court to get an interdict to continue operations, but in the meantime the resultant loss in connectivity for more than 48 hours resulted in WBS facing “significant claims” from subscribers who may have incurred financial losses while their connection was interrupted.
In most circumstances satisfaction of the regulator and regulatory requirements is a precondition to market entry and continuance. If regulators are not satisfied the organisation quite simply will not be awarded a licence to operate. Or the regulator may pass laws such as the Consumer Protection Act that makes it more difficult to operate.
In many cases regulators represent the interests of other stakeholders or the community in which the organisation operates. This might include particular minority stakeholders, who are not organised collectively. Regulators might include industry specific regulators, environmental regulators, regulators of competition – Competition Commission, ICASA etc., health and safety regulators, accreditation bodies (e.g. ISO), etc.
How to Build Closer Working Relationships
There are many factors that can affect working relationships, but striving to actively develop closer working relations with regulators will enable easier identification of their wants and needs, and of the way in which they can be satisfied. That’s why some organisations have Parliamentary Liaison Officers. Individuals that work the space carefully and methodically.
Development of close working relations with regulators can also provide the organisation with the opportunity (subtle lobbying) to feed back their concerns regarding regulation with the hope of influencing the development of future regulations and the regulator’s approach.
In addition close and open working relationships can enable early notification of changes in regulations to be provided, allowing greater opportunity to satisfy their requirements in sufficient time. Just like an Editor may decide to contact an organization when he hears of bad news, to check the facts before publishing it. This only happens if there is a close working relationship and trust between the two parties.
A good sign of a close relationships with regulators will be when the regulator is willing to listen and openly consult about potential regulations. This in turn will be affected by the regulator’s satisfaction with the past performance of the organisation, current relationships and mutual understanding.
However this is not an easy task and not as simple as it sounds. Take SANRAL and the e-tolling saga as an example of conflict and public dissatisfaction and court action being taken.
Open and Close Working Relationships implies many different sets of criteria, and those are often revealed in consultations when a stakeholder expresses his or her needs, wants and preferences. The problem is that few organisations have thought about meaningfully working the success of these relationships. As I stated before it is so much more than just having the right connections and relying on political affiliations and hand-outs.
I would advise that it is crucial to map the journey of the Government stakeholder with the organisation through defining contact points and moments of truth, but a close look will also need to be taken of:
1. The number of points of contact i.e. the number of people within the organisation who have contact with members of the regulator’s team. When relations are poor there is likely to be only one point of contact at a high level in the organisation, through which all communication must be channelled. When there are close working relations members at all levels of the organisation may be able to contact a member of the regulatory body to discuss specific issues or concerns with the regulator. Questions that should be asked about the nature and relevance of relationships and how the contact point measures his interactions.
2. It will be useful to take a look at the average number of meetings / communications / consultations with regulators in a given period by analysing:
– The number of meetings and considering how many were direct face-to-face communications with the regulator.
– The type and nature of the meetings and communications – which are the interactions between regulator and organisation via any medium.
– The number and nature of consultations – which are the two way negotiations between the regulator and the organisation, where the organisation is provided with the opportunity to feed back opinions on regulation. Were these open, honest or conflict-orientated.
3. Whether there was advance warnings of regulation changes – i.e. Did the regulator share or reveal information snippets of future regulation changes, allowing more notice to take action? If working relations are good the organisation will be able to instigate all modes of communication to consult on a wide range of issues. This will not be the case if relations are poor – all communication is likely to be from the regulator side.
Working with the Government regulator is so much more than just connection and networking. Government Stakeholder Managers need influencing skills, knowledge of negotiation, conflict, legal and personal and group psychology techniques together with the understanding of protocol, and much, much more.
But above all; questions – typical of a performance assessment type, must be asked of whether Government managers bring adequate value – performance and behavior to the process of building the organization’s reputation with the Government.
Should one do business with a company which once had a bad reputation, but now has new management? Or with a company which seems a little shaky due to a crisis or scandal? Or with known tenderpreneurs, Mamparas, etc.?…
The best advice is to proceed, but with caution. Follow these steps to avoid getting burned:
– Do your homework. Research the company and find out what the market is saying about them. Find out more about their modus operandi. Do a SWOT analysis. Do due diligence of not just tangible assets, but intangibles as well.
– Go slow. Meet with the CEO and/or company representatives. Meet with stakeholders. What is your gut feel about the management and leadership?
– Better still, get outside 3rd party independent opinion. Compare views and perspectives.
– Assess the risk. Compare your feelings and the research you conducted. If it’s positive, proceed.
Be careful who you get into bed with. Remember your reputation might be at stake.
Every morning in Africa, a gazelle awakens. It knows that it must outrun the fastest lion that day, or be eaten. Every morning in Africa, a lion also awakens. It knows that it must outrun the slowest gazelle, or starve to death.
The moral of the story is this: Whether you are a gazelle or a lion, when you wake up, you had better be running. In today’s fast moving knowledge economy you better be building and protecting your reputation. You only have one chance at making an indelible impression.
I learnt a lot on Good Friday.
Got invited to visit friends on a farm where they were bass fishing. I ended up doing nothing. No mobile phone, no e-mails, no books.
And, you know what I learnt. Yep, you have got it. The Value of Doing Nothing.
Right now I feel liberated. Tired from the sun and fresh air. But my battery seems charged. Not enough but a start.
Now I know there is a story that says that to do nothing in an organization you have to be very near to the top. Or the other one that says that the only reason men go fishing is because their wives will not let them sit at home and do nothing. But it honestly was nice.
The only problem in leaving there is that I felt just like Tony Soprano in the hit TV series – The Sopranos when I had to leave. This time I left and the ducks remained behind.
What is the value of policies, especially in terms of building, sustaining and protecting corporate reputation?
The value of policies is immense. It sets a framework for people to operate within.
Prevention of reputation related incidents in an organisation is one of the least costly and most efficient means of protecting a treasured reputation, but usually the most overlooked. Preventing in the first place, the types of defects that can badly tarnish or destroy a reputation saves an extraordinary amount of anguish, time, effort and money.
Prevention starts with the published policies, guidelines and procedures that all organization employees are expected to follow and implement. These published policies, guidelines, and procedures should be a reflection of the reputation that the firm wants to achieve. If a company wants to be known as a safe and friendly place to work, its policies should assure employees won’t suffer from discrimination, harassment or safety issues. If a firm wants to be a good community neighbour, its programs should allow employees to contribute and participate in community programs and services.
However there are a number of important principles to remember when writing, distributing and implementing policies.
– The mere fact that a policy has been written and distributed is no guarantee that buy-in into the implementation will occur. How will you measure adherence to the policy?
– How can you ensure that I as the recipient of the policy understand and will act on the content?
– Has your policies been benchmarked against best practice, environmental context (An USA Policy may not work in Arabia)
Measurement of compliance needs to be built into the design phase, delivery, and implementation and distribution phases.
You cannot leave it to the Internal Auditors to report six months later that a policy is not working due to the following…..
Nastiness gets you Nowhere.
Last year July an overseas client of mine reported me to my email service provider for sending her a newsletter she regarded as spam.
They subsequently cancelled my subscription and kicked me off. I then approached the lady who said she forgot about me, and she wrote to the service provider but they refused to reinstate me, stating than a complaint is a complaint.
Now I have had a few of those over the past 16 years where my newsletter was reported to the abuse section of my provider, especially where people have forgotten signing up in the first place.
Now I regard that as nasty. With an unsubscription facility, surely if you do not make use of that, why just report me? Why not send me an e-mail requesting removal? I am not a spammer. I am trying to share and assist.
My newsletter is read by more than 10000 readers worldwide. Why not build relationships, than just report. In Communication studies we are taught to consider our audience. Do you ever consider who is on the other side of an e-mail?
Nastiness gets you Nowhere!
Who knows who you will meet again in your journey? Maybe you will need me one day. I have put all those complaints and nasty mails in a file. I flagged them. Maybe one day you will send me a mail inadvertently.
As they say revenge is sweet but a meal best served cold. Maybe one day I will respond in turn, if I chose to do so.
I am not like that. I use my finger – the delete button. I unsubscribe. I send a mail stating I am not interested in the contents.
But I do not just complain to the authorities.
If my neighbour makes too much noise I speak to him or her. I am in the business of building relationships. In fact every time I have function at my home I inform all my neighbours. In 16 years I have had no complaints.
Because I consult before the time. I give them an avenue to complain. I engage.
I do not engage or entertain impersonal complaints.
Perhaps this post will make you think. There are many ways to achieve the same objective. Niceness is one of them.
As Ghandi said many years ago: “You cannot shake hands with a closed fist”.