"Sticks and stones may break my bones but words will never hurt me."
In theory, this old adage is a nice idea, but in the business world it doesn't always hold true. Often, it's necessary for extra steps to be taken toward comprehensive risk management to ensure that an organization will not be permanently hurt by poor publicity.
Studies have shown that when there is little or no communication within a company, such as when no comprehensive business continuity plan exists, more damage can be done to an organization. Proper training paired with a thorough education system of risk management is necessary to keep a company functioning through a multitude of situations.
A recent CFO article detailed the hazards of reputational risks, and how within the last year, businesses all over the globe have had to find ways to bounce back and stay resilient through negative press.
"Reputational risk is greater than ever because of social media and the 24/7 nature of news, which make it tough for a company’s message to stay ahead of a big story," the article said.
According to the Aon-sponsored Reputation Review 2012 report, of the 10 companies that suffered serious reputational damage in 2011, two lost almost 90 percent of their value.
Business resumption must progress at accelerated rate
It's not enough to attempt recovery after a negative event. Businesses and organizations need to ensure that they – and all employees – are prepared before something happens.
Technology continues to evolve at an exponential rate and more individuals are purchasing smartphones, tablets and laptops, which keep them even further connected in the digital age. As such, a business continuity plan needs to account for things like cyber attacks or bad publicity through social media.
When managers and CEOs take the time to ensure that risk management has been taught to employees at all levels, business resumption is more likely to happen in an expedient manner.