A crisis of confidence
13 November 2017 | 2:00 min read
Why aren’t senior executives confident in their organisation’s ability to manage a crisis?
Our latest Reputation Reality research (2017) reinforces the value organisations place on protecting their corporate reputation. While 98 per cent of Australasian business leaders say reputation is critical to their success and a primary asset of their organisation, many organisations are not walking the talk.
Tellingly, 75 per cent believe that reputation risk has grown significantly in the last three years. We are seeing a major shift in the risk environment, and the risks to corporate reputation are continuing to climb. There is no doubt that managing reputation risk is an ongoing challenge for brands and organisations.
Despite this growing appreciation of the need to invest in corporate reputation, there is widespread lack of confidence in being able to manage a crisis.
Only one in three respondents in New Zealand, and one in four in Australia, have high confidence in their ability to implement their crisis communications plans.
Five factors drive this lack of confidence:
- Organisations are not aligning their monitoring processes to cover their emerging risks.
- There isn’t confidence in social media / digital monitoring response processes.
- Less than 50 per cent of organisations test their crisis plans each year.
- Only 55 per cent of organisations in Australia, and 48 per cent in New Zealand, are planning to invest in crisis simulation training.
- Crisis scenarios, when done, are not testing digital response capabilities.
This strongly suggests people and organisations will lack confidence and capability at the time they need it most. In that scenario, the threat of exposure, and the ability of senior executives to perform under intense pressure, increases.
Added to this is the perception of what drives reputation. Given the decreasing level of trust in organisations and governments worldwide, we found it alarming how low integrity was rated as the key driver of reputation. Australian senior executives rated it at 54 per cent, with their New Zealand counterparts rating it at 76 per cent.
Authenticity, competence and transparency were the other factors measured, but they rated significantly lower.
Whether you are board director, chief executive or senior business leader, protecting your reputation in this challenging, fast-paced online environment needs to remain a priority. Preparation is everything. If you haven’t built credibility and trust with your stakeholders, you’re on the back foot even before the crisis starts.
Building a reputation depends on ‘walking the talk’ and avoiding dissonance – or what Deloitte has termed “the vulnerability gap” in its 2016 Deloitte / Forbes Insights global survey.
Trust is critical to maintaining stakeholder confidence and is the stepping stone for key elements of a crisis communications response. It is important to invest in building ‘trust and goodwill’ with stakeholders every day.
It will be too late to try to do it after the event.
Click here to see Neil discuss how organisations are experiencing a major shift in the risk environment, and provides some suggestions for how senior executives can best mitigate these risks to reputation.