By Nancy Albinson, Andrew Blau and Yang Chu

In today’s hyper-connected world dominated by mobile devices, social media, and evolving expectations from society, information can spread like wildfire. This convergence of mobile and social media is intensifying the impact of reputation risks for organizations and is driving them to fundamentally rethink their approaches to risk management and proactively address these accelerated, amplified risks.

What forces are driving this trend?

Social media is creating a more connected, networked world where information is rapidly amplified Disruptive mobile technologies are ushering in a new era of hyper-availability in which people are always available and connected An upsurge of socially conscious consumers, and growing consumer activism, is putting pressure on businesses to be socially responsible and transparent New multichannel marketing strategies built on social platforms allow for greater interactivity for consumers and less control for brands Globally distributed business models are increasingly dependent on third parties and other stakeholders

What are the opportunities?

  • Develop new capabilities for proactive brand-related crisis management
  • Continually scan media sources with technology-enabled intelligence capabilities to monitor reputation risk
  • Initiate targeted campaigns and develop an external ambassador program to nurture external brand advocates
  • Foster a more risk-intelligent culture with tools, resources, and training opportunities to help employees see the reputation implications of their actions

What are potential threats and pitfalls?

  • Personal online activity of employees can cause reputational damage to the organization
  • Organizations may be forced to respond to risk events in haste without fully investigating the situation

Case studies: Where is this trend already in play?

A media conglomerate fired its head of communications for an offensive personal social media post—which went viral in a matter of hours—in an effort to prevent further damage to its reputation.

Websites like Ripoff Report and Scambook offer online platforms for consumers to post complaints. Ripoff Report receives more than a million visits a week and generates several million dollars of revenues a year from firms that pay to resolve customer complaints.1

Food safety incidents can cause significant reputation loss and revenue impact for food and beverage companies. The impact on a company’s reputation is often intensified due to the negative attention received through social media channels. Brands that are not prepared to respond to crisis face further scrutiny for moving too slowly when incidents occur.

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1 Adam Tanner, "Love it or hate it, Ripoff report is in expansion mode," Forbes, May 09, 2013