LEARN INSURANCE

As a business owner, how often do you think "what would I say if I was the one on the news or the one being interviewed because my company did something wrong?"

This is definitely something to think about.  An insurance company can respond by paying claims and helping to rebuild but they won't stand in for you when there is a crisis and the media wants information.  What if one of your workers ignored certain warnings and started a fire that burnt down another business or someone's home?  What if your product didn't do what it was supposed to do and someone gets hurt?  What if one of your workers wasn't trained properly and was injured on the job?  Who will be the spokesperson for your company? 

There are what if's that apply to every business and it might be worth some time to occasionally consider what they are in your business and how you would respond to them.  A reputation can be killed because someone is unprepared to speak up in the event of a crisis and they do it anyway.  I found the article below in the Wall Street Journal and thought it was worth sharing.

 

When Reputation is at Stake

Managing Reputational Risk in an Age of Accountability

By Bill Coffin
Warren Buffett famously said that a reputation takes twenty years to build and five minutes to ruin, and that notion is truer today than ever before. Many executives consider their enterprise’s reputation to be their most valuable intangible asset, even more than intellectual property.
And why not? Manufacturers, food processors, retailers, energy companies, service firms: All have a reputation to uphold to their clients, their internal stakeholders and a public that passes judgment on their daily behavior. Every year, we see a major firm suffer a serious test to its reputation. Some fare better than others, riding through an operational setback or public embarrassment with relatively little lasting reputational damage, while others lose customer confidence, strategic partners and market share. The difference is having a good reputational risk management program in place, but this is easier said than done.
A few points to consider:
Embrace enterprise risk management (ERM). Managing a firm’s reputation does not rest with any single department or team, but with the entire enterprise. Any function of the company can impact the overall reputation positively or negatively, whether it is maintaining operational standards, behaving appropriately to meet regulatory expectations or working across departmental lines to ensure that no risk goes unnoticed. In times of reputational crisis, even if certain departments take the lead on handling the situation, everyone in the enterprise has a vested interest in making sure the company’s standing with the public and its stakeholders survives intact.
Have a crisis team in place. A reputation in crisis needs immediate triage by a team that knows exactly what to do and can spring into action the moment it is needed. Typically, this falls to corporate communications, legal counsel and the executive leadership, but in reality, representatives from every element of the enterprise should be represented. Once the plan is designed, it does no good for it to collect dust until the moment of truth. The plan should be rehearsed at least once a year. The more authentic the exercise is, the better.
Engage the media. In many cases, the media will make or break a reputation under fire. This includes traditional media outlets, but also the blogosphere, Twitter feeds and social networking. The key is providing access quickly and in such a way that provides actual content and insight to the situation at hand, rather than pat answers and spin. A contrived response is nearly as bad as no response at all. Bear in mind that the need for fresh content will be intense, especially during the first 48 hours of the crisis. There should also be a continuing plan for media outreach strategies to carry through the first week and first month. Even after the initial media blitz, there will still be opportunities to contribute to the story and to help deliver a happy ending for it. It goes without saying that for many firms, having a friendly and open relationship with the media beforehand can be key in helping engage those same sources when it is needed most.
Make the required sacrifices. Depending on the nature of the reputational crisis, doing what is needed to fix it — including purchasing media time and space — can be extremely costly, especially in the case of a product recall or product tampering situation or in a case where any kind of refund is involved. Do not fixate on these costs; consider them a down payment on the reputation’s rescue effort.
Be a leader first, and a manager second. Executive leadership everywhere is expected by the public to take personal responsibility for their firms’ shortcomings, and this is especially true when a reputation is in crisis. Having executive leaders get out in front of the story and engage the public in a meaningful way is critical. Make sure they are comfortable in front of a camera and under fire from an interviewer. History is replete with gun-shy chief executives who look uncomfortable on camera, which only makes the situation worse. Overall, there needs to be a genuine sense of contrition and a willingness to address the crisis: False sincerity or an attempt to shift blame by the top leadership of a firm in trouble will always compound its reputational problems. Be the leader the public expects and deserves.
Know when to get help. Some firms have reputation problems that are more chronic in nature, or their reputational crisis is more significant than first imagined. In such cases, it always pays to know the firm’s limitations and bring in outside branding experts who can help salve a reputational wound and get the enterprise back in good standing with its most important stakeholders.