Reputation Risk, why it is so important for a business to address now

Reputation risk is something that all businesses should carefully consider. Once a business gets a bad reputation it is more difficult to correct than fixing the problem that was the cause in the first place and a reputation may never be truly repaired. Reputation risk usually involves negative publicity due to one or more poor business practices and may also lead to loss of revenue and litigation. For instance, the problem could be caused by an inadequate or risky process that your business has been meaning to address or hasn’t updated in quite a while like an inadequate information security process that results in the release of customer or strategic business information or an inadequate workplace safety procedure that may lead to an injury to an employee or customer may pose a problem. Another example is poor customer service.

If you look at recent headlines you can see how reputation risk has hurt otherwise well managed companies. A recent public example of reputation risk was Jet Blue’s paralysis during a snow storm. However, even smaller, less public businesses face reputation risk every time they interact with customers, employees and the public.

How do you identify what may hurt business reputation?

What can you do about the problems you have identified?

You have identified business process issues using some of the processes discussed above. Now you want to address these issues before they hurt your employees, customers or your business reputation. There are a number of ways to approach these issues. You might want to divide them by impact to your business and tackle the largest impact first, or if some solutions take longer or are more expensive, you may decide on short and longer term solutions. Either way works as long as you have a plan of action and tackle these business process issues before they can irreparably effect your business reputation.

This article is the sixth on Managing Business Risks.  To get copies of my earlier Risk Management articles on Risk and Cash Management, Business Recovery Planning, Information Security, Workplace Safety and Theft of Goods and Services see my website www.businessrisksolutions.net. If there are any particular risks or controls you have questions about or would like assistance, please call or email me.

Bobbie Bleistift Collins, owner of Business Risk Solutions has over 20 years’ of experience in financial, operational and strategic risk analysis in the financial industry, as a management consultant and as a business owner. Business Risk Solutions helps businesses identify risks and put appropriate controls in place. Bobbie can be reached at 707-477-7739 or at bcollins@businessrisksolutions.net

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