Search engines conduct over 3.5 billion searches daily, and 1.2 trillion searches worldwide in Google alone. The web is voracious and search engines have to work hard to categorise and serve their users with the most relevant content. Historic content about an organisation can linger and untruths or misrepresentations endure for years.
In this complex and hyper-connected business environment, online reputation risk is fast becoming the number one strategic risk. Online commentary can have a significant impact as it often disseminates exponentially and in real time, creating a global reach that can no longer be contained using traditional methodologies of PR and litigation alone. The potential for global reputation damage is very real; people care more about company behaviour, how you operate and whether they can put their trust in you as an organisation. The responsibility for safeguarding a company’s reputation lies with management. With knowledge of the strategic picture of the company and access to key resources, the board plays a vital role in managing, mitigating, predicting and modelling of online reputation risk.
The danger of waiting until a crisis occurs
Reputation is the view that others have you; it is a perception and a feeling. By breaking down the intangible reputation into tangible components, a board can both assess and manage reputation risk. Online reputation risk is gathering both weight and momentum due to rapid advancements in data, technology and innovations for online users.
Legal, financial, environmental and operational risks are closely monitored at board level. Each of these elements have the potential to severely impact the overall reputation of the organisation. The board’s job, therefore, is to take a holistic view of the issues affecting the company and mitigate any potential issues before they arise.
However, boards rarely consider how their organisation’s reputation is being represented online. There can often be a disconnect between how the company sees itself and the reality of how it is perceived online.
Companies are increasingly held accountable for the morality or practices of their employees, suppliers or supply chain. The negative impact of questionable third party behaviour can be devastating and have tangible financial impact. With a more strategic view of the company, the board is well placed to understand the importance of re-aligning the perception and reality.
CFOs, finance directors and CROs are possibly the most relevant roles to anticipate the commercial and financial impact of a reputation issue or risk. This highlights the need to conduct analysis of strategic reputation issues prior to them occurring. However, live issues tend to dominate. Mitigating these issues take priority until the crisis has diffused. It is the board’s responsibility for actively monitoring these issues before they occur as part of effective corporate governance.
Some organisations place reputation as the primary risk factor with all other risks contributing to it’s ranking. This does not mean that reputation is more significant than the other types of risk faced by a company. It means that most other risks have the potential to become a much larger reputation issue if not handled with care.
The ability to predict likely responses to reputation issues is paramount. It is equally important to develop an understanding of how the internet has impacted the wider world. This involves taking an ‘outside in’ view of how the world will react to a reputation issue. Ahead of finding solutions to anticipate and monitor reputation risk, it makes sense to explore how culture is evolving and role that trust plays.
Trust in the digital age
Rachel Botsman in her Ted talk describes how trust has evolved over the last two hundred years. At that time, people tended to trust those people that they knew. Close circles of neighbours, family and friends were viewed as reliable and that trust could be lost or damaged by bad behaviour. This circle expanded to include people in positions of trust that were familiar and respected. This included bankers, lawyers and clergymen.
As people moved into densely populated settlements, this type of local relationship-based trust could not scale. Instead of the local banker, people were now dealing with a large corporation that didn’t know them. Trust became invested in institutions, like the law. According to
Botsman, however, just as local trust didn’t apply to big cities full of strangers, institutional trust is not suited to the digital age. Trust is now “distributed,” spread amongst strangers connected by social media and the internet.
She references online businesses such as Airbnb and Uber, where we build reputations by showing good behaviour to strangers, where the buyers and sellers alike are judged and scored accordingly. Reputation and trust are also linked, Trip Advisor is a well known example of this. Their entire company reputation rests on strangers’ perceptions.
By developing an understanding of how distributed trust affects company policy and culture today, a board can begin to develop a communications strategy and online response mechanisms that will resonate with their stakeholders. The outside world is evolving culturally as well as the internal culture of the company itself. Individuals naturally place trust in other individuals. Every person employed by a company now has the potential to effect change within that organisation.
The rise of the individual
Individuals today have the power to influence. Personal brands can become attractive commodities to a company that understands and knows how to leverage the social influence of an individual for their own benefit. Companies are keen to please to avoid the danger of being publicly taken to task by disgruntled employees. The rising role of internal communications and the emergence of the employee perk market illustrates just how dominant this culture has become. Take the recent example of former Google engineer, James Damore, and his leaked screenshots of his internal communication memo. The risk of damaging the public reputation of a business is all too real.
There is also the inherent risk that the behaviour of an employee is synonymous with the company they work for. This applies not just to employees that may demonstrate inappropriate behaviour on and offline but also to the CEO. A study by Reputation Institute in 2015 in conjunction with Airmic reported that: “Members report reputation risk as both their number one ‘keep me awake at night issue’ and a high concern for their executive management and Board”. The old adage of keeping a dignified silence in the face of a crisis has long gone. Transparency is key and a swift response is the most respected.
Online CEO profiles typically range from scant to press-prolific. There is an inherent danger for CEOs that lack a well-thought-out digital profile. Once a CEO has claimed Google ranking places with strong digital assets that are either personally or company owned, the position is secure. Google is sent a very clear signal that the best source of information about the CEO is the CEO or company itself. If CEOs rely solely on positive media coverage, there is a real risk that Google will make the logical inference that press sites are the most reliable source of information about that person. In the event of a crisis, this can mean that a CEO’s online reputation very quickly becomes wrapped up in negative commentary with little that the company to do to mitigate. The board must consider online reputation management strategies to protect themselves from such an occurrence.
By considering the rising role of the individual, the board can begin to make collective decisions about where reputation risk may lie. The individual relies on an accumulative online snowball effect as their ideas begin to gain traction. The board can determine key online influencers both inside and outside the company and analyse their roles in relation to the company. By identifying typical trigger points or contentious content or sentiment, boards can form scenarios with likely or best outcomes for the company. Whilst the board is not concerned with micro-management of an individual, they can take a strategic view of where online vulnerabilities may potentially lie and appropriate actions to avert an online crisis. This can often help to determine the most appropriate mechanisms for solving issues. Given that search engines typically take three months to fully index any online content, this is a sound approach. Before search engines are influenced enough to start favouring content not sanctioned by the company, online issues can be anticipated and therefore cut short by reacting early.
How can online reputation risk management become an essential part of strategic planning and process?
The primary phase of mitigating any online risks begins with strategy and analysis. Online audits are necessary to determine where online content about the company or executives appears. This can involve scraping the web (dark and open) to find any and all online mentions and put into place a strategic plan to build a comprehensive picture of the company’s online presence. A reputation audit helps businesses to better understand their digital profile, perception of that profile as well as identify any areas of potential vulnerability online.
Typically an ORM audit will reveal what content a company is appearing for, the reasons behind why that content is ranking and therefore how change can be effected. When the audit is complete, the process of strategic analysis begins.
Strategic digital analysis
This data is collated, discerned and categorised so that it becomes apparent where gaps in reputation lie. It also provides a roadmap that exposes any further potential areas of risk as well as opportunities to strategically build the reputation of the company. This process offers a chance to use the data collected to identify and anticipate trends that have led to online threats and/or opportunities. Early stage planning and monitoring helps to set the foundations of an online reputation management strategy, online risk management and crisis management.
Cyber-security and crisis management
Investing in crisis management and training can help organisations to stay ahead of serious threats. Media firms often provide training with social media simulations to determine the impact of a crisis on an organisation.
Data is a valuable asset for any business. Cyber security software can help to determine any threats that exist in the entire digital landscape. With data breaches regularly appearing in the headlines, it has become apparent that boards need to consider where company vulnerabilities may be found online. From hacking to spear phishing and beyond, companies stand to suffer from both financial and reputational fallout if secure defences are not in place to protect from cyber attack. Whether education is required as part of an internal company initiative or organisational and technological infrastructures re-constructed, this presents a key area for
reputation risk mitigation.
Technologies that help to assess risks can offer expedient ways of determining whether a crisis is about to occur. The ability to sense risk is of obvious benefit and allows the company adequate time to consider their reactions. One such example is social and keyword tracking: boards can pre-determine a series of keywords and phrases that could potentially indicate an emerging critical incident in different areas around the world. This enables the company to assess and extract any information that could prove contentious.
There are a plethora of tools that can collate and discern realtime data to recognise and report on patterns emerging. There are a wide range of tools that can track social media and search engines, tone and sentiment analysis tools, early warning systems and big data tools. Previous online issues offer a chance to learn and further refine how technology is used in-house. Regular assessment of these technologies, as well as research into emerging technology, can offer further help to organisations. Innovative software that becomes embedded into company risk management processes can help boards identify and address risks before they become major news and social media stories. Ideally, senior management should receive regular reports to allow for strategic planning. Quarterly presentations are recommended illustrating any major trends to help to flag any actions that may require company-wide changes.
Pro-active online reputation management
A pro-active approach to managing online reputation risk is key. Protecting the online reputation of both the CEO and company is a complex, necessary but manageable exercise with good habits in place. When operating in a technological revolution it’s important to stay human. The combined expertise of the board will help the company determine the best strategic routes for online growth and success.