Category: Root Cause Analysis

10 Reasons Why You Should Attend Reputation Risk Training


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 – 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:

Spotting Signs of Impending Trouble

Danger SlipThe 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.

Doing Business with Disreputable Companies


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.

The Importance of Reputation Risk Root Cause Analysis

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There was this case in a hospital’s Intensive Care ward where patients always died in the same bed and on Sunday morning at 11 a.m, regardless of their medical condition. This puzzled the doctor and some even thought that it had something to do with the supernatural. No one could solve the mystery….. as to why the deaths at 11AM?

So a world-wide expert team was constituted and they decide to go down to the ward to investigate the cause of the incidents.

So on the next Sunday morning few minutes before 11 a.m., all doctors and nurses nervously wait outside the ward to see for themselves what the terrible phenomenon was all about. Some were holding wooden crosses, prayer books and other holy objects to ward off the evil…….. Just when the clock struck 11…… What do you think as to what happened???

Scroll down to see what happened.

The part-time Sunday floor sweeper, entered the ward and unplugged the life support system so that he could use the vacuum cleaner.

Reputation Risk can have its origins in seemingly unrelated or small issues in an organisation that eventually becomes big things that can destroy carefully crafted reputations. “Witness, the front pages on a Sunday!”

The damage of a reputation 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 and risk management consultants.

But what about the indirect costs, the effects on various stakeholders? The customers that do not return? The prospective customers that read and base their future actions on today’s impressions?

The Exxon Valdez oil spill cost more than US$ two billion in the first two months. But ten years later Exxon issued a statement to say that the spill cost them more than US$10 billion in just trying to restore the environment. Added to that tally was the news that the company was fined US$5 billion for the incident by the USA government.

And why did the incident occur? Root cause analysis showed that it happened as a direct result of a faulty HR policy – understaffing and poor working conditions. (By the way the captain was not drunk, he had been suffering from sleep deprivation, I hear).

Many organisations plan for possible business risks but few have in place systems to minimise damage to its most valuable asset – its reputation. – Some studies such as the Ernst & Young “Measures to Matter” survey showed that reputation and the value of intangibles can make up as much as 70% of a company’s share price.

Any crises situation has the potential to damage an organisation’s reputation, impact on the share price and destroy relationships. No matter the factor or risk that caused the crises situation, reputation risk is inherent in it.

Reputation damage inevitably leads to loss of market confidence, critical stakeholder actions, litigation, higher capital costs, etc.

Reputation damage can be defined as the adverse operational and financial impact to business performance when the company’s good name gets tarnished. Yet, how often do management receive training and education on how to manage reputation and minimise reputation fall out? Seldom, I will wager.

To understand the potential ramifications of a reputation risk incident, it is vital to take a reputation root cause analysis view.

Negative publicity should not be seen as the reason for only further intervention downstream, but as an end-of-the-pipe effect, which could be organisationally have been cured upstream.

Often the root causes can originate in culture(values), leadership (actions), structure(relationships) and process (systems). These variables interact and combine to produce organisational reputation results and outcomes.

To empower managers to understand this inter-play, I will facilitate a program in July which I take managers through a guided process so that they can understand how reputation risk incidents develop and evolve.

See for more information.

Tracking & Learning from Reputational Risk Incidents

What is the point in not learning from incidents and ‘mistakes’?

Anthony Robbins writes in one book that the word mistakes should be reframed as learning experiences. He states that experiences can either be positive or negative. This an important distinction.

Not all reputation related risk incidents are necessarily negative. Maybe in the short -term, but often through speedy response and adequate communication a negative incident can be quickly circumvented.

Three years ago I was the keynote speaker at a conference In Maputo, Mozambique; organised by the National Society of Journalists.

I left via plane late Sunday evening from OR Tambo airport, Johannesburg, South Africa. Upon my safe arrival in Maputo, I heard the usual news. You here, but your luggage is in limbo, maybe on the way to Egypt.

The weather was very hot & humid, and of course I had no clean clothes . Apparently this was an usual occurrence, BUT what changed it was the actions of one of the NSJ employees. This young guy went back 5 times to the airport until he tracked down my luggage. His action and tenacity changed a negative experience around and I have been using the example ever since.

To me this is a good story, and many times these are the internal stories we should record so that we can use it in communication & marketing materials to build reputation.

However it is vital that every incident be recorded – positive or negative, is analysed and changed into a learning experience.

Thus to make it easy for you, I have drafted a couple of guidelines and questions that you should ask as you write a report on the incident.

Why write up a report?

j0422803Reason: ‘Soft Incident, Tangible Impacts’.

Ever heard that statement? Even worse. A CEO saying that a reputational risk incident is just a storm in a teacup and will soon go away.

Well, sometimes it does. But most times a small reputation incident impacts and can cause real reputational risk damage.

From a learning perspective it is vital for organizations to learn from mistakes (learning experiences) and incidents. I mean what is the purpose of history, other than teaching us the value of a learning experience?

What went wrong?

One of the frustrating (or is it challenging?) aspects of being a manager is that, from time to time, you are faced with a problem or situation where it is impossible to have a "happy ending", or successful outcome.

These situations typically involve other persons … a subordinate, a customer, a stakeholder representative, or perhaps a fellow member of management (peer or boss, within or between departments).

So, think back over the past month or so and recall a specific situation at work that "went wrong from a reputational perspective" for you.

Review the incident in your mind. Then describe it beginning with the questions below giving enough detail so that a person hearing it for the first time can visualise the nature and scope of what you faced.

The "case history" that you are writing as you complete this exercise will contribute to the relevance of your mitigation strategy.

To help you structure your "case", I suggest that you answer these questions in the order listed. As you do so, put a number in front of the parts of your story to "key" them to our questions.

  • What was the problem or incident?
  • What factor(s) caused or contributed to the situation? Background (What were the circumstances or events leading up to the incident?):
    When did this incident occur?
  • Could the incident have been avoided? How?
  • What remedies should be applied to lessen damage to perceptions, relationships etc.?

When you write up the incident, think of tangible and intangible impacts. For instance, what is the cost of the incident – in true cost, not actual expenditure.

Compiling this report will give you lots of information that can be used for strategic change efforts and learning for the future. Sharing it with senior management and Risk Management in the company is useful, as long as it does not become a witch hunt exercise.

It is vital to dissect reputational risk incidents, so that future damage can be avoided and actual impact be minimised.

The question that you should ask is: “What did we learn from this incident?’

P.S If you would like to learn more about these types of techniques and others like Reputation Root Cause Analysis, you might like to attend my next Reputation Risk Management Masterclass in Johannesburg, South Africa.


What: Reputation Risk Management MasterClass
a 2 – day event that unpacks Reputation Risk, Reputational Incident management and response. It combines latest thinking about Reputation Risk and best practices in Crisis Management & Crisis Communication.
When: Monday, March 7, 2011 8:30 AM to Tuesday, March 8, 2011 3:30 PM
Where: Hotel Apollo

Ferndale, Randburg
Johannesburg,   South Africa

What Is The Cost Of NOT Training Management in Reputation Risk & Crisis Management?

3338374358_7a2e62c539_o Reputational risk is the risk that an activity, action or stance performed or taken by a company or its officials will impair its image in the community and/or the long-term trust placed in the organisation by its stakeholders, resulting in the loss of business and/or legal action.

Essentially all risks and all related components of the group potentially impact on reputational risk.

Think about this one for a second…

You’re the CEO of a large company with a daily operating budget that floats somewhere in the millions. Your profit margin is already pretty thin and demands all your management skills to keep things in the black. Suddenly, something absolutely crazy and totally unexpected for which even your best contingency planning didn’t prepare you hits you dead on, sinking your thin profit margin into a deep, deep sea of red ink. I’m talking billions here…

No, this isn’t a cheap attempt at dramatics. It’s a nutshell summary of what happened to the airline industry after September 11. We could argue that those are exactly the times when managers really need to remember what they learned in management school. The truth is, however, that (a) We don’t teach them how to deal with crises like that; and (b) they don’t have time to worry about soft and hard skills, etc. when their pants are on fire. All they will worry about is whether they can save the “money”, because after all that is what the shareholders will hold them accountable for.

It is in situations like these that a person will display their normal crisis management style, and unfortunately what will happen is that managers will go for quick solutions rather than proper root cause analysis. There will be a tendency to address symptoms rather than real causes.

Part of the problem lies in our training that we provide in organisations. I am not saying that the quick and dirty phenomena is happening because training departments are doing such a lousy job, at least not from the perspective of understanding what management is about.

Where departments fail is in not performing regular simulations under which crisis readiness and decision making under stress can be tested. Where training departments fail is in not providing their managers with hard nose business skills training, things to do when faced with a crisis, things to prevent smouldering crises from erupting into perceptual crises, teambuilding and decision making under conditions of severe stress, etc.

What is needed is a solid understanding of the processes that support problem solving and ethical decision making and proactive thinking while studying management struggles, confusion, dilemmas, and the moral challenges managers face. Managers need training in understanding the many elements of crisis management, including such critical areas as crisis planning and preparedness, crisis communications, security of human, physical and intellectual assets and organizational behaviour, communication management problems and strategies.

That way we can assure that our management teams can make proper and ethical decisions when times of trouble come, decisions that will rather build than destroy a company’s good name. Let me ask you a question:

  • Does your company have a crisis management plan that has been truly tested and simulated in the past few months?
  • Does Crisis Management & Communication training feature in your training calendar for the year?

Unless it does, your company is a long way off from being adequately prepared. Don’t be upset if quick and dirty solutions are part of your organisation’s behaviour patterns. Sometimes incidents happen due to unfortunate oversight. Most of these times I believe they happen because management have not been sensitised to the importance of managing a company’s greatest asset – its reputation.

In many cases Reputational damage could have been prevented had management received training in the management of reputation.

Prevention is normally better than cure. Management teams should receive training in what reputation is, why reputation is an asset and a risk, the various drivers of reputation, how it is measured and destroyed, strategies for building, sustaining and protecting reputation, corporate governance, ethics and media understanding and media survival skills. It does not matter if you are working for Government, a Corporate or an NGO – Reputation remains the same and has the same impact.

Often Management asks about the cost of training. Why not consider the flipside of the coin? What is the cost of NOT training management in reputation understanding?

The question to ask is whether Organisation’s do enough to sensitise their management teams. BP did most of the above, and yet, even that wasn’t enough. Now that is even more scary!

If you would like to learn, how to prevent reputation risk emerging in your organisation, or would like to hone your crisis management skills, you would not want to miss this training event coming up.

What: Reputation Defence & Protection (Reputation Risk Mitigation) Masterclass
This two-day Masterclass provides comprehensive and practical coverage of all aspects on how to protect and defend an organisation’s reputation, and is based on more than 25 years research and experience on how to protect business reputations. The title word includes the verb defend. The reason – the word defend is generally defined as to take measures to make or keep safe from danger, attack or harm, and implies the actions of protecting, safeguarding, shielding, supporting or preserving. The requirement to defend can be associated with an individual, group, place or thing, and can be associated with honour, reputation, territory, assets and allies (stakeholders). It offers not only international best practices but also provides guidance how to implement a reputation risk management and protection framework. Worldwide reputation risk is seen as the highest-order risk and most dangerous to organizations, because of its volatility and unpredictability. Part of the problem is that some regard it as a strategic risk whilst others see it as a consequence of a risk. The way an organization therefore defines it, will have a material impact on how it will be mitigated and treated. Because reputation risk is volatile, unpredictable and often unquantifiable, it often happens that; what an organization regards as a small incident or issue, erupts and has a major impact, because stakeholders viewed it differently. Understanding the systemic interplay of factors is therefore vital in understanding this risk. If you’re responsible for ensuring that your organisation responds to and survives any form of reputation risk event – this Masterclass covers all the key steps necessary.
When: Tuesday, July 20, 2010 11:00 AM to Wednesday, July 21, 2010 12:00 PM
Where: Hotel Indaba

Johannesburg, Gauteng   South Africa

Want to Change your Reputation?

Before you can market a product or service, you need to take the teapot lid off and look at what it is that is withholding you from marketing and growing business success. That will ensure that the foundations are strong and the marketing and eventual reputation will grow in leaps and bounds.

The problem is that many organisations participate in various surveys that tackle the multifaceted issue of reputation. They then get results that do not always give them the full picture of what is not working.

About a year ago I saw the results of a survey conducted at a client that indicated that their creativity and innovation presence was lagging. Lagging in what?

To get to the real reasons, a lot more detective work is necessary. The questions that a skilled management consultant would ask is different to that asked by a traditional survey. A consultant would probe and probe until he or she identified the root cause. Only then, can measures be implemented to enhance creativity and innovation in the organisation.

So, what is stifling innovation in the organization? Is it structural, process issues, the corporate culture or competencies of the people?

Let’s just quickly define what a competency is. A Competency is having the required knowledge, skill and attitude to do a certain task at a certain standard level.

In my experience, creativity can start at that level. Most people upon asked to do an exercise in which they have to list the names of five people, dead or alive, they believe to be very creative, would seldom put their own names on that list.

In few organisations, a staff suggestion and idea scheme operates at an optimum level (maybe I will blog more on that ).

Anyway, here is a formula that you can apply to changing your organisation’s reputation.



Change == D+V+S+C

For change to happen a business has to:

  • Be dissatisfied with its present state (Are you happy where you are on the World’s Most Admired Company Survey? The Best Employer Survey, etc?)
  • Have a clear Vision of where it wants to go (Do you know what makes your company unique? Do you understand what drives reputation in your industry?)
  • Take the necessary steps to get there (Planning)
  • Create enough energy (or tension) to overpower the COST required (in terms of money, time and energy) to make the change happen.

Simple formula, but as one speaker once said: ‘’Business is just about two things, Buying and selling and a millions things in between!’’

Depends on how much you value your Reputation. I know Warren Buffet does.