Will your Organisation Win or Lose in a Crisis?

The right way to manage reputational risk and protect value in 2020

by Charles Lankester, EVP, Global Reputation and Risk, Ruder Finn

We are living in a perfect storm when it comes to corporate and reputational risk.

As well as toxic headlines, social media outrage and loss of goodwill, getting the response to a major issue wrong can have seismic financial repercussions for an organisation.

A recent Aon study showed value destruction of up to 30% if management is perceived to show lack of preparedness or poor decision-making during a crisis.

Over the past 24 months, Ruder Finn has delivered more >70 crisis workshops using our SONAR? crisis simulation platform.

Financial institutions, FMCG brands, luxury, pharmaceutical and hospitality clients all participated.

What was fascinating? How similar the issues are for almost every corporation thinking about reputation risk, crisis management and crisis communications.

The top three takeaways?

1. Team: define your Crisis Management Team before you need a Crisis Management Team. Pre-agree titles, roles and responsibilities. Get ready to move. Very. Fast. Think Special Forces, not Committees. Create simple crisis action items/agendas against identified scenarios. Make it crystal clear “who” does “what” by “when” in the first 1, 6, 12 and 24 hours.
2. Plan: Design a crisis management and communications plan that people actually read and that actually works. Light, graphic, playbook-style with clearly defined “what do we do”, “who do we call” and “what do we say” components. Consider making it an app vs. a document.
3. Define. Think through/identify your non-obvious/most unpleasant/difficult risk scenarios. Think laterally. Ask what can’t happen. And what makes you most (really) uncomfortable.

Without (obviously) disclosing any specific client insights, I thought it might be helpful to share other lessons learned, planning changes made and improvements achieved post-our work.

• Data. Identify issues at the earliest possible stage. Fix your problem when only 100 people are talking about it vs. 100,000. How? Invest in data analytics/social listening. There are some excellent resources out there, many which are also good at building prediction/AI into their analysis.
• Let your brightest be bad. Task a small, talented team who knows your organisation really well to simulate damage your company. In the same way corporations use ethical hackers to test IT security, use this team to find the gaps in your reputational fence. Fix the gaps.
• Approve statements in advance. You can likely figure out most of the issues you will face before you face them. Pre-approve (with legal and comms input) statements and Q&A before you need them. This will save you hours and hours of time you can far more usefully invest elsewhere in dealing with your problem.
• Remember your employees. The average Facebook user has 338 friends. Suppose you employ 1000 people. That's an addressable audience, via your home team, of 338k people. Employees are an invaluable, credible communications channel who are far too often overlooked or forgotten completely.

One thing is for sure: 2020 will test people and businesses, but opportunities will also be present amongst the chaos for those who know where to look and how to respond.

In fact, some companies emerge much stronger after a crisis based on how they managed it. And how customers, employees and investors perceived how they managed it. Just ask KFC.

In the event that you are dealing with a corporate force majeure, ask yourself a very simple question:

Can this make us better/stronger?

Charles Lankester, EVP, Ruder Finn