Your Reputational Risk could get overlooked
The Reputational Risk is not the one at the top of your list of priorities as you come into this new phase of semi-lockdown. I certainly hope you are paying attention to the health risks to yourself, your employees and your clients. I have written about that recently. However, you should not overlook ANY risk. At least briefly, review them all. because this is not a good time to shoot yourself in the foot.
Your Reputational Risk matters
The Reputational Risk is the risk to your brand image. You can measure it by the loss of business from an event that damages the public’s perception of you, your business, your product or perhaps your industry. It takes a long time to build up a good image but you can wreck it in hardly any time at all. I have written about this before, but the recent furore over Dominic Cummings reminds me – and I hope you – of the importance of your reputation and how not to manage it.
How do you manage the Reputational Risk?
.You want (I hope) a reputation for providing a good product or service. It helps if you actually do provide one. But things go wrong. Risk Management involves identifying what could go wrong and having measures (controls) in place to prevent those things occurring, or to make them less likely. Since no systems are 100% foolproof, you also need to ask ‘what if…’ and have measures in place so that you can respond effectively if things do go wrong. These measures should include:
- Things to put right what went wrong, e.g. repairing physical damage,
- Investigating the incident,
- Preventing repeats
- Compensating victims.
There also need to be measures to reduce the damage to your reputation. These should include:
- Carefully-worded explanations and apologies
- Credible assurances of steps to prevent further such events.
How not to manage your Reputational Risk
Avoid as far as possible
- Denials – unless it really didn’t happen.
- Blaming the victim – unless they were solely to blame and had obviously acted very badly.
- Arrogance – as if the public had no right to expect better or to be told anything.
- Vagueness – sounding as if you either don’t know or aren’t being open
Remember the public aren’t fools and most can spot humbug and pathetic excuses a mile off. For the benefit of those not so gifted, there are others willing to help in this task. They are called journalists.
How did Dominic Cummings fail to manage his Reputational Risk?
With all that’s happened since, it seems a long time ago, but the incident has damaged the public’s perception of the government – perhaps permanently. The lessons are highly relevant to us all.
- His initial decision to go to Durham was a bad one It was bound to look bad.
- His explanations have been incomplete, inconsistent and unconvincing.
- His defenders, especially the PM, have appeared to speaking when unaware of the full facts..
- He never apologised.
- He appeared irritated by his questioners, as if they were being unreasonable.
Take the offensive and make the Reputational Risk an opportunity.
If you use a failure as an occasion to show sympathy, to do more than you ‘have’ to, to overcompensate, you can actually gain a good reputation. You might:
- Replace a faulty product with a more expensive one.
- Give a complainant the ‘red carpet’ treatment.
- Thank them for making you aware of a shortcoming in your systems.
In that way, you could snatch victory from the jaws of defeat. Don’t be a Dom!
If you want more on Risk Management generally, read my book, Load The Dice.