“A reputation once broken may possibly be repaired, but the world
will always keep their eyes on the spot where the crack was.”
- Joseph Hall
Damage to brand and reputation remains one of the top ranked risks identified by businesses in Australia and overseas, according to a recent Global Risk Management Survey.
Warren Buffett famously said that it takes 20 years to build a reputation and five minutes to ruin it. If you have any doubt about the effect of reputation on the bottom line, look no further than Volkswagen. Since the emissions scandal hit in 2015, Volkswagen’s market cap has declined by 30%, equivalent to over 20 billion Euros.
With this in mind, what might you do differently to protect your reputation and the reputation of your business? There’s no question that reputation has an economic value, so taking steps to protect and manage it makes good business sense.
These should include:
- Invest time and money in building a good reputation now – don’t wait until a crisis. A good reputation doesn’t happen overnight.
- Make reputational risk management a top organisational priority.
- Proactively manage key reputational risks – this means relying on a good plan that considers all the things that could go wrong, and what could be done to mitigate the possible risks. At a time when we are hostage to a 24 hour news cycle and social media, crisis can spread globally within minutes, which means the response must be immediate and cohesive.
- Develop a structured system for reputational risk reporting and evaluation. Integrate reputation management into all business processes.
Five things that can make or break an organisation’s reputation:
- Your values
- Your people
- Social media
- Risk management structures