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Social Media Has Changed Reputation Management Forever And There Are A Few Things You Must Know

The advent of social media changed the rules of reputation and crisis management overnight. The power of online media means that todays crises emerge at lightning speed, and spread further and faster than ever before. Social media also imposes higher standards of transparency. Incidents which could previously be kept under wraps are now much more likely to become public knowledge (sometimes even before the organisation itself is fully aware of them).

To put it simply, a crisis fuelled by social media is not something you want to face unprepared. Social media poses internal and external risks, both of which could have a potentially devastating effect on your organisations reputation and bottom line. You can no longer avoid these risks by not having a social media presence. Whether you are engaging or not, many of your stakeholders are on social media, including your employees, customers, competitors and, of course, the traditional media.

CrowdControlHQ have partnered with Insignia Communications to raise awareness of new threats of social media and the potential impact this can have on preparing and managing social media elements of the crisis.

If you have been in your position for over five years, there is an 85% chance you have faced at least one major corporate reputation crisis.

(Any listed corporation faces an 85% likelihood of experiencing a significant corporate crisis in any 5-year period.
Source: Oxford Metrica, Aon Reputation Review 2011)

Crisis prevention and reputation management have changed significantly during the past few years. Social Media has affected how reputational crises appear and unfold.

Whether you are a veteran or you have yet to face the fire, the following will provide a quick update on what a Social Media crisis means and how you can prevent it, prepare for it and manage it in order to minimise the effect on your organization.

Your reputation is more important than ever.

The asset value of corporate reputation has increased significantly over recent years, but so did the associated risks. Indeed, reputational risk was identified as the greatest risk facing global companies, even higher than regulatory, human capital, IT, market and credit risk.

63% of a companys market value is attributable to reputation (Safeguarding Reputation research by Weber Shandwick and KRC Research, 2007)

66% of board members identify reputational risk as their primary concern when it comes to risk management
(EisnerAmper, May 2012)

Enter the Social Media Dragon

Regardless of what started it or how it started, a crisis will almost always find its way online. According to a 2011 report of the Federation of European Risk Management Associations, reputational risk from social media is cited as a material risk by 50% of risk managers and a bigger cause for concern than cyber attack. So how is a social media-fuelled crisis different?

Increased Frequency

With social media, people are creating and sharing more information than ever before. As more information about the organisation is created and shared in social media the frequency of reputational crises has also increased. The greater transparency provided by social media is another reason why the frequency of crises has increased.

Staggering Speed

Sharing information with your entire friend network and followers is only one click away. There are 800 million active Facebook users, each of them having 130 friends on average. Equally, Twitter has incredible reach, with opinion formers and journalists over-represented amongst its users. A reputation-damaging scandal can spread in a matter of minutes.

Global Reach

What happens at a local level does not stay local anymore. A companys’ failure to provide proper work conditions in one isolated factory in China can become the talk of London and New York the next day (if not sooner).

Total Visibility

Investors, factory workers and all your stakeholders now have free access to information about your company, its suppliers and customers. And that information is no longer controlled by you: it is created by third parties.

Easy recollection of the crisis

They used to say that todays’ newspaper is tomorrows’ fish and chip paper. Not any more. Long after the crisis has passed, a simple Google search for your Companys’ name will bring back all the articles and posts related to the controversial issues.

More Measurability

On the plus side, in the online space everything can be measured and scaled. You can more easily assess the dimensions of a crisis in order to deliver a proportionate response. It also helps with post-crisis review so that you can put plans in place to prevent similar events from occurring again.

More interaction

Social Media can facilitate instant dialogue with concerned stakeholders. Addressing concerns quickly, empathetically and directly can go a long way towards defusing a crisis situation and having a positive impact on how the company is viewed.

When the crisis is triggered by events happening off-line

A crisis is often triggered by unforeseen events happening off-line. These events may concern a specific department or business unit, one of its suppliers: a work-related accident can start an enquiry on the work conditions provided by the organisation; rude treatment of a customer can cause a sudden burst of accumulated dissatisfaction with the company. Regardless of the cause, once the issue is picked up in social media, it will be amplified thousands of times.

When the crisis is purely social

Social Media and the new mobile technologies have created a whole new class of reputational crises. No off-line event triggers these incidents; they arise in the online space, often because of the organisations’ own actions on social media. As you will see below, purely social incidents and can be as dangerous to the companys’ reputation as those triggered by offline events.

Internal causes

Your employees can be your organisations worst enemy. Many reputational crises are triggered by employees actions on social media, either on the companys accounts or on their personal profiles.

Careless posting on the organisations accounts

When an employee creates and manages the organisations social media account from their own personal account, mixing up messages can happen quite easily. There are many instances of accidental or inappropriate posting, which have caused great embarrassment and significant damage to an organisations reputation.

Three magic words: prepare, prepare, prepare

Symantecs’ 2011 Social Media Protection Flash revealed that 94% of 1225 surveyed organisations had experienced negative consequences related to social media.

Whilst many organisations focus their crisis management planning on threats such as cyber attack, terrorism or natural disasters, attending to the internal and external risks of social media is at least as important in crisis prevention. The previous examples demonstrate the perils of ignoring this imperative in social media crisis management.

76% of social media crises could have been avoided or diminished if only companies made some internal investment in social media planning and preparedness. Altimeters’ Social Business Readiness Report, August 2011

Reducing the likelihood of a social media crisis is an effort that should start from providing the adequate social media policies and training to your own employees.

This process has three steps:

1. Create a social media policy
Employees need to know where they stand with regard to social media. And businesses need to establish clear guidelines to reduce the likelihood of self-inflicted reputational harm. Drafting a social media policy is the first step in achieving these goals.

2. Communicate your social media policy
Policies only have value when they are communicated to staff so make sure that every employee is aware of the policy and is briefed on it as part of their induction procedure. The danger you must avoid is creating the perfect social media policy that no one has ever read.

3. Embed your social media policy
The third step, and the one that really makes the difference, is embedding your social media policy within the organisation. Reading a policy is one thing; understanding and embracing it is quite another. One of the best ways of doing this is via a social media crisis simulation where members of staff have to apply the policy against a realistic scenario. It takes the policy from being dry words to something that employees have tested and applied, but in a safe environment. Prepare to keep them updated as new situations arise and have to be dealt with.

Rosemary Hall works for http://www.CrowdControlHQ.com a web based social media risk management and monitoring platform that enables organisations to operate safely. Download our free white paper report http://crowdcontrolhq.com/social-media-risk-whitepaper.php

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