Company Reputation Risk…Internet Asymmetric!

 Michael D. Moberly   January 27, 2012

A company’s fiduciary responsibilities associated with managing its reputation and preventing – mitigating any attendant risks, should not, in my view, emulate the conventional Hollywood publicist or public relations model.  That’s because, reputational risks have become, in every sense, ‘internet asymmetric’!

Managing a company’s reputation risks include:

• designing and executing enterprise-wide practices that are s proactive as possible
• a strong sense of pragmatic foreseeability
• consistently monitoring the company’s and stakeholder’s environment
• correctly assessing – interpreting reputational risks within those environments
• recognizing reputation risks have become ‘internet asymmetric’

With due respect to any company management team that actually tries to address today’s persistent and asymmetric reputational risks through a ‘reactive Hollywood public relations model’ will likely find themselves and their company mired in playing catch-up with the nanosecond realities of the unfiltered, revengeful, sometimes manufactured and conspiratorial communications that can rapidly take a toll. 

Somewhat analogous to air cargo carriers which serve as rapid supply chains to businesses globally,  most management teams have come to know, or, at least they should, reputational risks can materialize just as rapidly through what I refer to as ‘built in’ global (Internet-based) message dissemination mediums, i.e., social media platforms, blogging, etc.

Interestingly, as we’ve already seen numerous times, adverse communications (reputation risk events) routinely expose and exacerbate other (company) vulnerabilities, some of which may only be tangentially related to the initial event, but never-the-less  adversely affect a company’s overall reputation on a 24/7 cycle.

There are numerous aspects relevant to reputation risk management that warrant consideration by management teams, c-suites, and boards globally, two of which are:

1. appreciating the virtual and potentially viral nature of reputation risk and the speed which unfiltered, malicious and manufactured (social media-blog) communications can materialize to produce the initial adverse effects on companies.
2. assembling a cross-functional team of decision makers in advance, who possess the inclination, intellect, and capability to not merely monitor ‘the environment’, but develop the means (processes, practices) to rapidly and accurately assess:

• what I refer to as the ‘realness’ of an adverse communication (potential reputation risk event)
• if, or the time frame the above can/may morph into genuine reputation risks
• estimated duration of the adverse (economic, competitive advantage) effects to company reputation.

In other words, how will, not if, such communications impact a company, its customers, its suppliers, and its stakeholders and shareholders?

An important key in my view to unraveling and correctly assessing an adverse (reputation risk) event is that such assessments should not be framed in conventional risk – threat models applicable to tangible (physical) assets.  A company’s reputation is an intangible (non-physical) and, in most instances, its most valuable asset.  There’s virtually no argument on this point.

Assessments of adverse social media content that manifest as reputation risks should be conducted in contexts of:

• whether and how such communications can expose – exacerbate otherl (company) vulnerabilities and thereby create adverse cascading affects?
• the speed which those vulnerabilities can materialize and how various global markets will interpret them (react, respond)
• are such reputation risks subject to being controlled, mitigated, or favorably reversed in a sufficiently timely manner to permit a company to effectively recover from any economic – competitive advantage hemorrhaging that has occurred?

While visiting  my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) .  Should you find particular topics of interest or relevant to your circumstance,  I would welcome your inquiry at  314-440-3593 or m.moberly@kpstrat.com