Post by David Van
The most important thing I’ve learned in my years as a crisis management professional is that most crises are avoidable. Yet companies still gamble with their reputation.
I have advised on hundreds of crises and after nearly every one the client wants to know how and/or why the crisis occurred. So after conducting many ‘post mortems’ what became very apparent is that, in most cases, the crisis that did occur could have been predicted and therefore avoided altogether, or at the very least the reputational damage could have been mitigated.
It is rare for a crisis to simply just happen. Yes accidents do happen but they are not the cause of most crises. Most crises arise from risks that are identifiable and therefore predictable and more importantly manageable. The science of doing this is called reputational risk management.
Reputational risk management vs. crisis management
Too many organizations believe that a crisis management plan is all the reputational risk management they need, which is an opportunity lost. Why? Because if you need to activate your crisis plan your risk management has failed.
Listen: TCIP #023 – Managing Reputational Risk with David Van
That is not to say you don’t need a crisis management plan, you do. Bad things do happen to good companies, accidents do happen and ‘black swan’ events can occur. Every organization must have in place a crisis system and train, rehearse and test their teams to ensure it works in case they need it.
80% of crises can be avoided
However, in my experience, up to 80% of crises arise not from unpredictable events but from risks that could have – and should have – been predicted and managed before developing into crises. These risks can be identified by conducting a reputational risk audit and can then be prioritized based on the probability of them occurring and the potential damage they may cause.
Read: How To Identify your Crisis Plan’s Blind Spots
Key risk factors will allow you to create early warning systems that should highlight any increase in risk which can then be flagged so that appropriate mitigation can be put in place. By mapping, monitoring and reporting on changes to reputational risks, senior management and/or the board can be appraised of situations before they become a crisis, ensuring no one is caught off guard even if the risk cannot be avoided.
Yes reputational risk is a complex risk to understand and manage as it doesn’t behave like other risks, but that in no way means it’s not manageable. Once identified, reputational risks are usually quite straightforward to manage just like any other risk with the exception that, unlike most other risks, you can’t ‘lay off’ or transfer reputational risk. It is important to bear in mind that once the reputational damage occurs, no matter how it arose, you own it.
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