Do you need a chief reputation officer?
A new role has emerged in the c-suite of today’s enterprises – the chief reputation officer (CRO). Does your business need one?
When you see the effect a major issue like, say, BA's recent IT failures can have on customer opinion, it's no wonder brands are developing new job roles to try and manage reputation.
The new executive role of a CRO is responsible for ensuring the health, wellness and protection of your brand and your reputation, owning and addressing a comprehensive strategic plan to address and reduce reputational risk across all markets, channels and products.
The growing interest in the appointment of a CRO role is perhaps unsurprising, with research by Weber Shandwick revealing that executives estimate that, on average, 60% of their firms’ market value is attributable to its reputation.
Elsewhere, a survey by global risk consultancy Deloitte revealed that 87% of executives surveyed rate reputation risk as more important or much more important than other strategic risks their companies are facing.
Reputational risk should, therefore, have at least the same priority as financial and compliance risk, for example, and the creation of the position of chief reputation officer proves that this need is getting noticed.
Ongoing risk management
Reputational risk is a very real threat, and it cannot always be foreseen or be planned for.
So how can you move from reacting to a crisis when a threat to your reputation occurs, to continually managing risk and maintaining your reputation? The answer is to become proactive, rather than reacting to the latest fire drill to hit your company. And while installing a CRO is a major step in the right direction, there are other measures that need to be taken company-wide.
Deloitte’s survey discovered that not enough organisations are currently prepared - 39% of those surveyed rated the maturity of their reputation risk programmes as “average” or “below average” and only 19% gave themselves an “A” grade for their capabilities at managing reputation risk.
So how do you start managing your reputational risk?
Outside of the CRO, have a plan of action that can be implemented as soon as, and maybe even before, your reputation is at risk.
- Who is in charge of reputational risk? The rise of the position of CRO since the financial crisis proves there is a need for an executive level owner. If you don’t have a CRO, having someone who is ultimately responsible for your reputation and can gather information about the wider landscape will help to unify your processes and drive improvements.
- Have you role-played through potential scenarios? Imagine the worst threat you could possibly receive. What does it look like? Who does it come from? Why has it happened? Although it’s not something we like to think about, considering what could potentially happen to damage your brand will help you set up steps to take if the worst does happen.
- Have you got an arsenal of credentials? Start building up your paperwork. If an untrue threat came in to a restaurant about poor quality, but the restaurant had no certification from their standards agency to show their quality was excellent, they would have to work even harder to rebuild their now damaged reputation in the eyes of their stakeholders, namely customers - those who put money into the business.
- Is your front line empowered to respond to a threat? Those who are in direct contact with customers, such as customer service, complaints handlers and your sales agents, could be the first to hear about reputational risk. They need to be prepared and well equipped to manage the risk and threat before it escalates.
- Do you have systems in place? Technology can be a tremendous weapon in managing reputational risk. The consolidation of customer input from multiple sources including traditional and social is a key first step. However, real return on investment is achieved when an organisation can begin to dive into root cause analysis and remediation.
Execute and excel
- Are you prepared to react quickly? Time to response is critical in the execution of any reputational strategy. Customers expect an immediate and sincere response regardless of the threat. An organisation that closes ranks for days or weeks in order to craft a carefully worded PR statement is going to be viewed through a very sceptical lens as the threat evolves.
- Are your responses proportionate to the level of threat? Reacting quickly is great, but make sure not to overreact. Attempting to sue someone for leaving a negative review, for example, could only do more harm in the eyes of your stakeholders. Any response needs to be proportionate and thoughtful.
- Can you engage your advocates and independent spokespeople? Customers tend to discount the corporate propaganda that is issued in the wake of a reputational challenge. A well planned reputational risk strategy will have recruited and engaged independent voices that can deliver your message with trust and authority. Consider how you would reach out to your brand advocates to amplify your message during a threat.
- Do you leverage all channels consistently? If you have different teams managing different types of communication, it’s important to share the same information regarding a threat across all your channels. An inconsistent message will have the same impact as a delayed response: more fuel to fan the flames with.
Don't risk it
It only takes one risk or threat to scar a reputation permanently. 57% of companies are planning to concentrate more on Reputational Risk in the future and are redefining their processes to make sure their brand reputation is perceived exactly as they want it to be. Even if you've yet to appoint a CRO, there are measures your organisation can be taking today. So why wait until it's too late?
Matt Keenan is CRO for Lone Wolf Real Estate Technologies, having formerly been in the position of Vice President, CRM Product Management at Aptean, a leading provider of industry-focused mission critical enterprise software solutions.