The Biggest Business Risk in 2019? A Lack of Imagination

Now well into 2019, only supreme optimists would forecast plain sailing for the rest of the year. The challenges facing business and individuals are myriad and the stakeholder environment complex. According to 2018 Deloitte global research, 80 percent of corporations polled mobilised their crisis teams in the previous 24 months, with cyber incidents (46 percent) being the most common cause.

The good news? There is fresh thinking that can help navigate and mitigate the most challenging situations. As an example, look how brilliantly KFC gave a FCK about their UK chicken supply crisis and the honours it received for great work. At the heart of the campaign? Boldness, ownership, creativity and a real affinity with, and understanding of, their customers. Contrast this with the cold-blooded corporate response by Pret a Manger over their food labelling crisis: avoidance, deflection and out-of-touch.

Our firm helps clients think about risk and reputation management in numerous markets around the world. Here are six insights for staying ahead in 2019.

Reimagine what you think you know

It probably won’t be a factory fire that you need to worry about in 2019, but more likely a posted smartphone image or film.

Challenge yourself and your colleagues to identify your real world risk. You know “that” VP who is always forgiven for unacceptable behaviour because of their financial performance. You know “those” locations where you manufacture under conditions that don’t really align with your mission statement.

Ask yourself what could really damage you? Give yourself permission to get uncomfortable. Write the five or ten headlines that you dread the most. It’s a cathartic exercise and extremely valuable for forward planning. We often ask our clients to codify what absolutely, positively could never happen within their organisation. Liberating barriers, and spurring imagination, surfaces innovative thinking.

Understand the difference between terminal and turbulent

It takes a lot to destroy a company or individual.

We've lost count of the headlines that forecast the end of days for a business or individual, only for the “crisis” to be forgotten about within, well, days.

An excellent example would be Facebook which, though battered reputationally in 2018, announced record results and saw its share price soar in 2019. Facebook’s problems turned out to be far from terminal and today the corporation appears stronger and, ultimately, more resilient. Yes, everyone was upset with what they did, but ask yourself a very simple question: did you #deletefacebook? Thought not. Because (as the financial results showed) Facebook users really weren't that bothered.

Fortune favours the bold

As with KFC, and now Jeff Bezos and the National Enquirer, boldness and first mover advantage can reap dividends. Kudos to Mr Bezos for removing any leverage his opponents might have had by going very public about some very private stuff. In a single Medium post, the Amazon CEO climbed to the top of the moral mountain and now owns this story. It is was a brilliant example of outmanoeuvring your opponent by getting miles in front of the news.

Corporations and individuals: note the #bezosplaybook in crisis management.

Listen to the (social) music

There is no excuse in 2019 to be “caught out” by an emerging issue online. Numerous platforms can now identify social spikes or unusual traffic on a real-time basis. Keep in mind that United Airlines had close to 24 hours (a lifetime in modern risk management) to respond to the Dr Dao aircraft removal fiasco from the first social video posts to mainstream media coverage.

Face it: your problem will be real-time thanks to social media. Be sufficiently organised internally to enable you to be aware of what is being said about your organisation as it is being said.

The Deloitte data backs this up: “improving early warning systems” was the highest ranked (33%) change companies who experienced a crisis said they would make in the future. There are now resources that allow companies to predict what will happen as an issue unfolds. Use them. You will give yourself the most valuable gift of all: time.

Denial is not a river in Egypt

A 2018 study by AON/Pentland Analytics shows that the “value impact” of “reputation events” has doubled since the advent of social media and that crisis communications “must be instant and global” to spur a recovery in value. Thinking about, and planning for, what can damage your reputation, business or valuation is never pleasant.

However, organisations who think ahead and get prepared tend to move faster and more confidently when facing a problem.

They almost always emerge in better shape than the unprepared.

You are (far) less prepared than you think

We see time and time again an alarming trend in planning and thinking about risk: companies who have been through a major incident or crisis prepare for it at an enterprise level with full CXO involvement. Those that have not? Not so much. 88 percent of companies believe they would manage a corporate scandal well, but only 17 percent have tested their people and capabilities via a simulated incident (Deloitte). This “confidence chasm” is something that should be of real concern to the C-Suite. Are you genuinely prepared for CNN or CCTV parking their satellite trucks outside your corporate HQ?

Looking forward, the AON/Pentland study concluded that five attributes were common to all corporations who survived and thrived post-crisis: they were prepared, genuine, transparent, global and coherent.

For corporations thinking about risk and reputation in 2019, we suggest thoroughly examining what (if any) planning you have in place and then ask two very simple questions.

Will it actually work? Would you bet your reputation on it?

Charles Lankester is a multi-award winning, global marketing and communications leader. He specialises in reputation and risk management, advising Fortune 100 corporations, governments and high-net worth individuals. He can be reached at [email protected]. This article originally appeared in PublicAffairsAsia.