How to manage and mitigate reputational risks
Reputation is everything. Lose it and your business is at serious risk. At the very least, you’ll lose customers, or fail to gain new ones, and that inevitably means a loss of earnings. Worst case scenario, your business fails completely.
Remember the Pret a Manger sandwiches that caused the deaths of two teenagers from allergic reactions in separate incidents in 2016 and 2017? It caused a media storm of negative coverage.
It’s impossible to eliminate reputational risk altogether, as there will always be factors out of your control. It is possible, however, to reduce risk by pre-empting and proactively neutralising known problems before they become too big to contain and certainly before negative stories hit social media, when they can quickly blow up out of control.
Problems most likely to damage your reputation could include:
Service or product failures, such as a faulty product or missed client deadline
Data breaches, and even small leaks of customer emails, can damage trust
Breaking or bending the law, including accidental compliance oversights
Improper staff behaviour, which is impactful for smaller organisations where staff are the face of your business
Poor financial performance, such as late supplier payments or rejected card transactions
Small businesses can be particularly vulnerable to reputation damage as they often have closer community ties and rely heavily on word-of-mouth recommendations.
In this guide I outline practical steps to protect your business reputation, including how to:
Identify and assess risks before they become crises
Write a crisis communications plan
Develop an effective response team
Learn from your experiences
Preparation is key
You will be better protected against reputational damage, which could lead to closure of your business, if you have a clear crisis communications process in place
Step one – identify business reputation risks
Businesses should keep a risk register. A senior member of staff should be responsible for each risk and a senior communications expert should have oversight and regularly review the register to assess those risks most likely to cause reputational damage and decide on actions to avert or mitigate the fallout.
Remember to take off those rose-tinted specs - you’ll need to look critically and objectively at your organisation to clearly see potential pitfalls.
Step two – assess reputation risks
Give each risk a score based on the likelihood of it occurring, added to the scale and impact of any potential fallout. For issues that emerge as high or medium risk, my advice is to prepare crisis communications materials - just in case.
Step three – create a crisis communications plan
There’s a reason why the military has adopted the motto ‘Train hard, fight easy’. The same approach applies to reputational risk management. A knee-jerk or panicked reaction is unlikely to be much good and might even cause more harm. For the best chance of providing a considered, appropriate and timely response, put in place a comprehensive crisis communication process.
There is much to think about. First, decide who should be involved in a crisis communications situation and who should lead the response team.
Decide how the response team will work together. If everyone is based in the same office, that helps. If not, go with an online collaboration platform. Microsoft Teams works well for larger organisations, while smaller businesses might prefer tools like WhatsApp Business groups or Google Workspace. The key is keeping all crisis-related documents and communications in one secure, easily accessible place. Set up dedicated channels or folders for:
Crisis response documents
Media statements
Internal updates
Stakeholder communications
Remember, even a simple shared Google Doc can work effectively if it's well organised and everyone knows how to access it.
The response team should agree how to approach the crisis: balancing how much information to share, how often to communicate, to whom and through which channels.
Strike a balance
It’s tricky to know what to say in a crisis and how to say it. Sharing too much information, or using the wrong one of voice, can be just as ineffective as ‘no comment’ .
Step four – test crisis response
Once the crisis communication process is in place, it’s a good idea to practice it. Create different crisis scenarios - real or imagined - and run regular workshops for relevant staff. It’s important to get everyone involved: at each stage of the crisis, ask people what they might do and discuss the pros and cons of the suggestions.
Having been responsible for reputational risk management and crisis communications at a large organisation, I’ve devised and run workshops like this for years and they are always interesting and fun, but I never forget the serious reason behind them.
Step five – learn and improve crisis response plan
No two crisis communications incidents are the same and there’s almost always something to learn from each. For this reason, once the crisis has been resolved, there are two possible follow-up actions.
First, review the effectiveness of the response to identify what went well and whether anything could have been done better. If necessary, tweak the crisis communications process to reflect your findings.
Secondly, provide a briefing about the response for your bosses. Include evidence of outcomes, lessons learned and recommendations to improve future responses.
Learn from mistakes
Reviewing how you handle a crisis and learning lessons from mistakes is important for improving your response next time
Don’t wait for a crisis to strike
A well-prepared business is a protected business. If you need help preparing your organisation for potential reputation risks, I offer:
Crisis communications plan development
Risk assessment workshops
Team training and crisis simulation sessions
Ongoing reputation management support
Based in Bristol, I work with businesses across the UK to protect their reputations. Contact me for a confidential discussion about your organisation's needs, or to arrange a free initial consultation.