Is Your Reputation At Risk?
You’ve done everything to build and brand a great product and company, everything to keep your clients’ data safe…but sometimes things can go wrong and you will be the first one blamed.
According to the World Economic Forum Global Risks 2012 report, on average, more than 25 percent of a company’s market value is directly attributable to its reputation, and that number continues to climb.
Reputational risks are caused by many intended, and unintended events, for example: a cyberattack on a retailer’s credit card data, manipulating markets or making trades based on insider data, employing under-aged workers overseas for a “US-based” company, or accidently serving contaminated or expired food at a restaurant.
Whether the event is intended or unintended, the responsibility ultimately belongs to the company’s CEO and their management team. Why, because it directly impacts revenue and the company’s brand.
One of the major reputational risks today is systems interruptions and Cybersecurity. Any interruption to services – whether it be from a cyber attack, system-wide outage, human error, or security breach, is a business disruption that goes all the way up to the C-suite executives down to their clients, and can cost extremely valuable time and money to repair…not to mention the damage to your reputation.
Some things are out of your control and customers will understand that; for example, a storm knocking out power and shutting down your systems. They won’t, however, be as understanding if you weren’t proactive in safeguarding your company. So how to do you stay ahead of the problems?
- If a third-party is hosting your data or is the hub of your operation you still need to remain in control. When their systems go down or are breached, your clients are coming to you with their complaints – because ultimately you are responsible. One way to be proactive with a third-party vendor is to have them comply with your own internal requirements.
- Make sure you have a tested disaster/incident recovery plan in place. Disaster/incident recovery planning is a huge undertaking and touches every part of your organization, but having a plan and testing it will help you face any challenges down the road.
- When something goes wrong you will need the entire company on board, not just the IT team who’s going to work around the clock to remedy the situation. Your top management teams, PR professionals, customer support, and even your marketing staff need to be involved, and know what the company response is, and how it’s being communicated.
- Be proactive. Invest in data analytics that will enable you to analyze real- time data, such as pattern detection and recognition. Keep on top of social media using text analysis that will pinpoint conversations about your company. Social media combined with big data analysis will help you get ahead of the crisis and lessen the impact. This combination could be the most important and impactful decision you make, better than business liability insurance!
- Learn from mistakes. Hopefully you are not the target of a company-wide disruption, be it human error or cyber attack, but chances are some company, somewhere around the world is being hit right now. Most won’t make the front page news of the Wall Street Journal, but you need to be ready to respond to incidents whether they are the result by cyber security attacks, third-party partner action or employees’ mistakes. Loss of reputation is beyond repair if not properly and systematically addressed.
- Make sure that you know what your business risks are and that you are up to date with managing them all the time. Managing your business risks are not a one-time event. Each component that contributes to the risks must be monitored in real time. There are multiple tools and technologies that will facilitate managing and monitoring both your business and operational risks.
In the end it’s your company name, your reputation, and your responsibility to ensure the integrity of your brand.