Reputation management is in the limelight as businesses are finding reputation harder to manage than ever before, according to research from SenateSHJ.
The survey found businesses are underinvesting in protecting what they all regard as a primary asset.
The research revealed 96% of leaders surveyed see reputation as a key component of their success, while more than 50%believe it is now more difficult to manage than other forms of risk, and more important to manage than it was three years ago.
The study, Reputation Reality: Trans-Tasman Perspectives on Reputation and Risk, highlighted a range of risk management strategies that organisations are failing to invest in.
Less than half have a dedicated line item in their budget for reputation management. A similar percentage are planning to invest in crisis simulation training – one of the most effective ways to prepare for a crisis, according to SenateSHJ. This means around half have no plans to test their ability to react well in a crisis, the company says.
This underinvestment leaves them exposed to identified risks such as dissatisfied customers, cyber-security threats and safety breaches, which New Zealand respondents identify as posing the biggest threats to their business success.
SenateSHJ chief executive Neil Green says the survey showed a strong appreciation that corporate reputations have tangible value.
“It's clear that senior leaders believe their corporate reputation is an extremely valuable asset and are well aware of the financial loss that could result from a damaged reputation,” Green explais.
“Unfortunately, the research also shows their actions are not backing up their beliefs. This continues a trend over previous research we have undertaken since 2006 which highlighted that too few organisations are changing what they are doing to prepare for a crisis, or to address areas of concern to them,' he says.
While eight in ten respondents said their organisation is proactive in protecting its reputation, only a quarter have a budget line item for reputation management.
“In practice, this means managers and their teams will be expected to manage reputation with existing resources, leaving the organisation's reputation extremely vulnerable in a crisis,” says Green.
The survey also asked respondents to provide examples of organisations they believed managed their reputation well under pressure.
Air New Zealand received the most accolades in New Zealand for its handling of the A320 Airbus crash during a test flight in France. Respondents said the airline responded well by front-footing the tragedy, and leading with its most senior person.
Trans-Tasman comparisons Factor - New Zealand - Australia Corporate reputation is one of our organisation's primary assets. 96% 96% Corporate reputation is harder to manage than other forms of risk. 45% 61% Which role(s) within the organisation ‘owns' the management of corporate reputation? CEO: 72% CEO: 59% Traditional media is important or very important in influencing trust during a crisis. 84% 91% Social media is important, or very important, in influencing trust during a crisis. 68% 85% What tools do you use to monitor your reputation or risks to it? Customer surveys 80%77% Traditional media monitoring 76% 79% Social media monitoring 74% 74%