Reputation Risk: An Unwanted Dimension Following Aurora Theater Shootings…

Michael D. Moberly    July 25, 2012

Let me be very clear at the outset.  In no way do I, through the language I use in this post, intend to convey any disrespect to the victims and families or otherwise trivialize the recent tragic and senseless shootings that took place at the Aurora, Colorado movie theater.

It would be equally disturbing if this post was misinterpreted as representing an out-of-touch perspective interested only in Warner Brothers reputation and box office economics related to ‘The Dark Knight Rises’.

With that, allow me to explain to the global readership of this blog what influenced me to decide it was important to write this post.

First, while the words risk and threat have become firmly embedded in citizens’ lexicon following September 11, 2001, the Aurora theater tragedy served as one more kick-in-the-gut reality that risks-threats, of the type posed by James Holmes, are not especially difficult to foresee, after-the-fact.  In most instances, and Holmes will likely be no exception, an abundance of cautionary warning signs will surely be found.  Missing however, from those inevitable pieces of the puzzle though, is the essential ingredient we have come to call, connecting-the-dots.  Dot connection after all, is necessary for substantiation and probable cause to act proactively.  Correctly and consistently foreseeing the who, what, when, where, and how this or similar tragedies (risks, threats) materialize remains challenging on many levels.

One such level is identifying the presumed mental-emotional triggers (motives) that set in motion inexplicable elements such as Holmes’ site selection, timing, acquisition of weapons and ammunition, and planting explosive devices in his apartment, etc.  I must admit, I am not a strong advocate of so-called profilers.

A second factor that influenced me to write this post, very much integral to the first, evolved from a corporate reputation risk seminar which, coincidentally I attended just prior to the Aurora shootings.

There is certainly no shortage of examples in which corporate – institutional reputation risk has manifested itself with disastrous human and economic outcomes.  At Penn State, for example, the on-going revelations of child molestation were suppressed for 15+ years, while, in the Virginia Tech, Columbine, Gabby Gifford, and Aurora theater tragedies, everything unfolded in a matter of minutes.

For pundits reporting on the tragedies at Penn State it did not take long to ask the question or perhaps worse, offer an opinion, about whether and/or to what degree that series of tragedies would adversely affect student enrollment, fund raising, town and gown relations, and university economics, etc.   And, within 12 to 18 hours following the Aurora theater shootings, pundits were asking whether box office economics of ‘The Dark Knight Rises’ would be adversely affected and/or whether Warner Brothers should withdraw the movie from theaters in deference to the shooting victims and their families.  To be sure, Warner Brothers executives were asking the same questions and soliciting opinions from a bevy of reputation risk and public relations specialists nearby.   WB has now announced it would make a substantial donation to the shooting victims, presumably from the films’ box office receipts.

As most individuals occupying the c-suites and comprising the boards of companies understand; a company’s reputation, while it can be an extremely valuable intangible asset, it can also being a very fragile asset, vulnerable to an almost infinite number of risks and threats.

It used to take years of consistent mismanagement to destroy a company. Today, a company’s downward spiral, leading to an ultimate and premature demise can occur almost overnight.  But, it’s not just due to a broader range globally persistent and asymmetric risks, threats, and hazards that can impair a company’s reputation.  Rather, a company’s reputation demise is often linked to the speed which unchecked, dismissed, or overlooked reputational risks can materialize, escalate, and cascade throughout an enterprise and particularly to its stakeholders! (Adapted by Michael D. Moberly from remarks of Sir John Bond, Chairman of UK based HSBC)

Following the Aurora event, I’m quite confident that, in WB’s c-suites, someone posed the question whether the film should be pulled out of theaters altogether, not solely as a respectful gesture to the shooting victims and their families, but as part of a process to mitigate potential hemorrhaging of its reputation.  While I have no firsthand knowledge of such questions or conversations, I can apply Bob Woodward’s award winning narrative nonfiction style to suggest, with a high degree of confidence that such conversations did occur!

As minimal evidence of this, wisely, WB did pull trailers of its upcoming ‘Gangster Squad’ and it’s reported they opted to literally cut a ‘violent movie theater shooting’ scene from that film.  In my book, that’s a fairly clear example of reputation risk management at work!

I have frequently heard my colleagues say that once a company’s reputation has compromised through unforeseen events in which they are ill or unprepared to sensitively address or the company has not ‘banked’ a substantial amount of goodwill with its stakeholders in advance, reputation damage may well be inevitable.  Recouping lost economics, competitive advantages, and consumer loyalty will be a long, costly, and time consuming endeavor.

In the end, it appears WB’s respectful silence immediately following the Aurora shootings, may well have, in this instance anyway, served as an important contributor to mitigating reputation risk to itself, and to one of its products, i.e., the film, ‘The Dark Knight Rises’!

When innocent people die or are harmed in an incident such as Aurora, Columbine, Gabby Gifford, Penn State, or Virginia Tech, it is the epitome of corporate, institutional, and/or government insensitivity to suggest there is ever any good that follows.  In this instance however, it may well open eyes, minds, and doors to re-examining and re-calculating reputational risk by incorporating the variables noted here and not just to reduce the probability for its re-occurrence, but truly understand consumer reaction and resiliency, and the reputation of the victims!

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