Wednesday, August 15, 2007

Managing Risk to Reputation a PR Dilemma

We live in the age of the risk management of everything. Paradoxically this still leaves organisations that diligently engage in risk management exposed to what Donald Rumsfeld called ‘unknown uncertainty’ which I have commented on before.

This warning about the escalation of the risk management of everything should be taken seriously. In his first Demos book, The Audit Explosion, Michael Power warned against that companies and governments preoccupation with measuring what is measurable – the now discredited ‘targets culture’.

In his more recent pamplet the Risk Management of Everything, he says: “Reputation has become a new source of anxiety where organisational identity and economic survival are at stake And if everything may impact on organisational reputation, then reputational risk management demands the risk management of everything.”

The anxiety about reputation means that experts and professional bodies are increasingly taking defensive steps to protect their own name, rather than managing risks on behalf of the public. One example of this the proliferation of ‘small print’ as professionals ranging from doctors to accountants attempt to hand risk back to customers, clients or society as a whole.

Part of this anxiety is brought about because of a profount misunderstanding about the nature of reputation. Part is in the lack of coherent reputation management which is about internal values and their interpretation by publics.

While it is the duty of the PR planner to asses and develop risk management strategies, one of those duties is the management of risks inherent in abuse corporate value systems from both within and without.

A company with 'small print' value systems will eventually be brought to book, either by the consumer or the regulator. But what of the company that does not have such an ethos but the lawyers insist on the small print?

It is a simple question, the answer is simple but are corporate managers big enough to be good at public relations?