I was thinking of new trends in the reputation space today. And I was thinking about how reputations can easily be formed, shaped and cultivated through crowds. If a crowd on Twitter or Facebook organizes to give a high five sign (I presume that means thumbs up), to a company or brand, its reputation gets a lift. And if the crowd does not think highly of a particular company’s words or deeds, the collective force of that crowd online can demolish a reputation. Is this some form of crowdrepping that I should be paying particular attention to? I think so. It often feels as if the crowd is deciding whether a company gets five stars instead of three or if it gets a complete Do Not Pass Go (that’s from Monopoly). Just musing for the afternoon.
Social media risk is now a mainline risk according to U.S. executives surveyed by Deloitte in a study with Forbes Insights. The research, Aftershock: Adjusting to the new world of Risk Management, was conducted in the spring. As described in their executive survey, social media is now among the traditional risks we often read about in the risk management field such as the global economic climate, regulatory changes and government intervention. Social media ranks fourth because it can act as an “accelerant” to all the other risks. Just give it some air and it spreads like wildfire. In fact, Deloitte refers to it as the “wildfire” effect because social media can push a company’s reputation into a tailspin. They might also call it the gas pedal effect!
Which risk sources will be the most important over the next three years?
|Global economic environment||41%|
Source: Deloitte and Forbes Insights, 2012
I just recently saw the term “reputation laundering” in an article I was reading on the plane (which is where I seem to spend alot of time these days). I always like to mention new phrases that involve the word reputation. It is one of my favorite pursuits (which is pretty pathetic if you think too much about it). So I went to search for the term to find the article again and came across over six thousand mentions of the term. The Guardian seemed most closely associated with the term because of their reporting on the practice in the UK, so they say. What is it? It is the practice by institutions or individuals to disguise the source behind wrong-doing. Not a good thing. Just thought I’d call attention to the phrase in case anyone else found it interesting.
On another note, a colleague sent me an example of reputation response and recovery (thanks J). It an interesting interchange from the CEO of Deutsche Bank. Apparently Foodwatch approached Germany’s largest bank to warn them about the bank’s speculation in the agricultural market that they said was increasing hunger and poverty worldwide. Now what was different here is that the playbook changed. The CEO — Josef Ackermann — rarely responds to these types of criticisms. At first, the bank rejected the accusations in Foodwatch’s report and petition. But in short order, the CEO responded in a letter to the head of Foodwatch by saying he shared their concern and would review the bank’s activities in the trading of agricultural commodities: “I share your sadness that so many people on our planet continue to live in poverty and must go hungry.” And Ackermann wrote in his letter:
“No business is worth risking the reputation of Deutsche Bank.”