A quick guide to reputational risk

When it comes to reputational risk, a reactive approach is generally taken by organizations, with efforts focused on handling threats to their business they are already aware of. As much as this enables short term damage limitation, it may not be enough to manage and protect your risk in the long term.

Instead, a more proactive approach is key to success. For this to truly work though, people throughout the organization need to understand where the risks to reputation are, when to accept them, and what actions should be implemented to avoid or mitigate them. Given that it’s very hard to build a reputation, but easy to lose one if not managed correctly, this is becoming more important.

A big potential risk to any business is when different ways of working and new technologies are introduced. Both pose their own separate challenges but also bring significant benefits to organizations, so understanding their potential impact is key.

The first thing you need to do is to be objectively aware of the changes you’re making and the risks that come with them. Everything has its risks and the more aware and open you are, the more beneficial it is in managing expectations across the organization of the impact of the change.

Key at this awareness phase is that not everybody will be aligned with the change. You need to understand their concerns and what they feel the risk is to themselves and their part of the organization, in order to address them or highlight them as future risks. The more transparent you are, the less resistance you’re likely to see. When working with people at this phase, the biggest barrier to implementing new ways of working and technology is the lack of understanding of risk to the business – so that transparency is key for organizational buy-in.

Once you’re past the awareness phase, you then need to look at how you plan for change, and prepare for any crisis that may occur linked to it. This part is central to managing your reputational risk to enable you to act on issues in real time and understand the actions needed to mitigate them.

At this point, technology may be part of the solution. For instance, a key risk might be that if one of your servers is down, or a deployment fails, it will hinder the service you provide to your customers. In order to mitigate this, you may need to introduce a technology solution such as SQL Monitor to enable you to act quickly by alerting you of any problems with your servers and ensuring all hands are on deck to get them up and running again.

Once you’ve planned for the change and identified how you mitigate and provide a solution for any potential risks, you’re then in a position to close the gaps within your organization with a measured and strategic approach. It’s important here that expectations are managed across the organization of the reality of the change, and everyone has a clear understanding of the wider impacts of the change and the impact on reputational risk. Ideally, this needs to be led by one function or person to ensure long term success.

When it comes to protecting the reputation of your organization, you need to understand risk and be prepared to make positive changes across your organization, whether that be through new ways of working or technology, or both. The more open you are to identifying risks and acting upon them, the more sustainable your reputation will be.

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