Opinion: The biggest reputation risk for 2016? Your existing planning

Companies need to rip up their crisis management plans and reset them for the digital age, says Charles Lankester, Ruder Finn Asia's senior vice president for reputation management

Charles Lankester

"It feels like we have justice now." This comment from one of the Australian students recently kicked out of an Apple store in Melbourne spoke volumes after Apple eventually said sorry. In what looked like a blatant case of profiling, the company was initially defensive, presumably hoping it would all go away.

After their local "no comment" strategy failed, it appears Apple HQ took control. A well-written apology was issued, albeit late and once a video of the students being told they weren’t welcome had been viewed thousands of times.

What’s interesting about this case is whatever risk management planning Apple had in place critically failed when it was needed most. So why do large, well-resourced, smart companies get tripped up so often?

Based on studying dozens of crises, and helping clients navigate more than a few, we conclude most corporations are still thinking historically. Apparently even Apple. When faced with a full-scale crisis, management teams often discover the "planning" they have in place is close to worthless.

My team and I have managed numerous complex, challenging, socially-accelerated cases recently. We have isolated five elements we believe are vital to retaining the initiative in 2016.

First, predict what is going to happen. I know, we are all a bit fatigued with terms like "big data" and "predictive technology", but guess what? Corporations today really can see around the corner and figure out what’s going to whack them and avoid the punch. Imagine if you could see a social media spark and stop it becoming a fire. Today, you can. And you should. The statistics are extraordinary; one company is currently analysing 72 billion records and delivering predictive analytics on 7.2 billion every day.

Second, think lean planning. Much crisis planning today is obese. It needs a workout. It is also often dull, which does not prompt engagement. And, even in 2015, we still have the laughable situation of "social media" often being separate from "crisis management" planning. Analogue plans are valueless in a digital world. It’s very simple. Your planning in 2016 should start by answering three questions on a maximum of two pages – "What do we do? What do we say? Who do we call?"

Third, make yourself uncomfortable. It’s never pleasant to think about your finance director embezzling funds, a manufacturer putting expired food on your shelves or your customer database being hacked when you were warned it was vulnerable six months previously. But the obvious risks you identify will rarely be the ones that seriously damage you; it will be those you chose to institutionally ignore that do. Rather than ask what could happen, ask what cannot. Your thinking will be liberated.

Fourth, think PI – Personal Interest. When thinking about 2016 risk, ask a simple question: how much will people care if X happened? How much will this development affect my customers, stakeholders or community on a personal basis? Work backwards from that. If it touches those important to you personally or emotionally, they will care exponentially more. The issue will need entirely different management. Forget the graded "risk traffic light" cliché – PI will instantly show how serious an issue is and allow corporations to calibrate a suitable response.

Fifth, you have no time. Companies need to be able to respond in real-time to allegations or developments. Plans that allow for even an hour of response time are likely overly optimistic. As explained by a friend who works for a large Government-linked organisation, "the media know at the same time as I do, often before". A recent Freshfields study showed that the majority of crises were visible within 59 minutes whereas it took 21 hours for the company to respond. This means for 20 hours these companies’ reputations were being defined by third-parties, rarely favourably. There are interesting solutions being developed, but keep in mind that silence will very rarely be golden in 2016.

Getting the response to a major issue "wrong" in 2016 will have seismic financial repercussions. The same Freshfields study shows that 53 percent of corporations who experienced a crisis had not seen share value recover to pre-crisis levels a year after their initial problem.

The overriding element that that will drive a successful response to a reputational threat in 2016? How does your organisation treat risk? It is a speck on the horizon, an interloper or a statistical anomaly? Or does it sit next to you, a permanent fixture and your next phone call?

How you answer these questions will determine your corporation’s valuation long after any crisis has passed.

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