The 5 keys to know if your organization is prepared for a reputational crisis

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    IT and Communications

A recent study by Willis Towers Watson (WTW) revealed that 89% of executives surveyed consider their organization’s resilience to “reputational issues” to be good or very good.

In other words, the vast majority of organizations that participated in this study feel prepared for a reputational crisis.

This is very good news if we take into account that reputational risks are inherent to the activity of virtually any business today. Facing a crisis is only a matter of time.

We live in a society that is increasingly demanding public responsibility, which, beyond expecting organizations and their leaders to comply with the law (something it already takes for granted), demands a social contribution that helps to improve the planet and society..

It is, what some call, the era of responsible capitalism.

What basic elements are necessary to be prepared to face a reputational risk?

In this context of maximum scrutiny by the different stakeholders, it is important not to let them down when it comes to dealing with a reputational crisis.

Generally, crises cannot be avoided. Some are not even the result of negligent action by the company, but are the consequence of events beyond the company’s control. A good example is the discredit crisis recently experienced by the Spanish strawberry sector in Germany.

The success in overcoming the crisis will depend on the decisions that the company adopts to manage it in terms of reputation.

Although each organization will have to adapt the protocols to its business, below is a brief list of basic measures that companies can adopt to mitigate its effects and, in many cases, even prevent it:

1. Compliance policies accompanied by communication plans. Large companies have extensive compliance policies, internal regulations, protocols, guidelines, best practice manuals and a host of materials and processes to ensure compliance and good performance of the organization and its members. With regard to reputation, it is equally important that this entire system has a communication plan that integrates all stakeholders.


2. Consolidating corporate identity. Building reputation takes a long time and does not depend on a single action or successful crisis management. A corporate identity in which compliance, good practices and sustainability have a place will be fundamental to minimize the impact of the reputational crisis.


3. Specialized team and agile systems when response is necessary. The speed at which information is disseminated today and the diversity of channels through which it flows means that the response must be agile and fast. To this end, since crises are managed by people, it is important to maintain direct and permanent contact between management teams and to include in them the management bodies with the capacity to influence the company’s decision-making. In addition, these management teams must have members specialized in reputational crises who are aware of the specificities and sensitivities to be taken into account when managing this type of situation.

4. Inclusion of the reputational variable in strategic plans. Contemplating reputational risk in each of the company’s actions is nowadays fundamental to ensure the success of the decisions taken. The preliminary analysis of reputational risks will make it possible to anticipate the possible consequences (severity of impact and probability of impact) and to adopt avoidance or mitigation strategies, which is key when it comes to managing a crisis.

5. Artificial intelligence (AI). AI poses a major challenge mainly in terms of the veracity of information on the internet. However, digital tools that combine this type of intelligence are tremendously useful for information analysis. This allows companies to better understand their stakeholders and more accurately predict the potential reputational risks they face.

These are just a few basic keys that any organization should consider in order to prevent and deal effectively with a reputation crisis.

As we said at the beginning, most of the executives consulted consider themselves prepared for a reputational crisis. However, 87% also recognize that the risk model “only covers immediate first-party and third-party risks and not the impact of a serious and prolonged crisis”.

The integration of this type of crisis prevention systems in a permanent and transversal way to the business contributes to companies starting from a more solvent position when they have to face risks and reputational crises throughout their history.

If you are interested in learning more about how to manage or control the impact of reputational risks on business continuity and sustainability, we invite you to download “How to Prevent Reputational Risks with Virtual Scenarios and Automation.”

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María Gaytán de Ayala