A recent study conducted by a team of researchers surveyed over 300 executives, mostly C-suite and board directors, and discovered that reputation is considered the highest impact risk area to business strategy.
This finding cuts across most industry sectors and ranks above threats to their business model and the impact of economic trends and competition.
Businesses and brands are increasingly seeking the services of companies that specialise in tidying up search engine results. The effect of a terrible review, a critical blog, an unflattering link or rant from a disgruntled ex-employee sitting in one of the top 10 Google spots can be devastating for a business as click-through rates plummet. Obviously, some companies have the online reputation they deserve, but an unjustified, malicious or obsolete complaint may linger for years, blighting every new query.
In most industry sectors, reputation has risen from outside the top five strategic risk concerns to the top of the list. In the energy and resources sector, for example, reputation ranked outside top-10 on the list of strategic risks in 2010, though today, it irritably sits on the top spot.
Large corporations and high-networth individuals are constantly targets of disenfranchised employees and customers. Companies and industries with reputation problems are prone to incur the wrath of legislators, regulators, shareholders and the public. However, what is said is not always a true reflection of a company. Perceptions are not always based on fact, but on opinion, conjecture and rumours.
“The breadth and depth of today’s reputational challenge is a consequence not just of the speed, severity, and unexpectedness of recent economic events but also of underlying shifts in the reputation environment. Those changes include the growing importance of Web-based participatory media, the increasing significance of NGOs and the declining trust in advertising,” said David Miller, spokesperson for aReputation.co.uk, an online reputation management company based in UK but operating extensively in the Indian sub-continent.
According to Miller, “the challenge with any reputation management crisis is effectively targeting those that need to be informed while not generating undue attention from those that don’t. The best way to accomplish this is to create targeted press releases within the News Room that can be linked to from a variety of sources. ”
Speaking to Forbes, Michael Fertik, founder and CEO of Reputation.com, put it succinctly when he said some time back, “you can relinquish your influence over that reputation and your cultivation of it and just let fate take over, but it’s actively costing you something. Even if your online reputation is neutral, there’s an opportunity cost because you may be missing out on visibility or connections that could help you.”
USA-based Reputation.com and UK-based aReputation.co.uk are two of the frontline global online reputation management companies that cater to a wide menu of clients. Their relatively niche, yet substantial, presence in India is likely to inspire Indian ORM companies who have so far been unable to tap the potential of the reputational market. While Reputation.com has a strong presence amongst small and medium companies across all sectors, aReputation.co.uk is known to cater to large corporations and high-networth individuals.
Unfortunately, companies struggle to categorize, let alone quantify, reputational risk. Risk managers are divided on whether reputational risk is an issue in its own right or simply a consequence of other risks. Whatever position companies take on this, almost all executives agree that reputation is a hugely valuable asset.
Whether you are handling your reputational needs or outsourcing it, generating positive content is critical. In a world where more and more people are likely to judge you based on what appears online, there’s no excuse for feigning ignorance or imagining it doesn’t matter.It’s much better to take a proactive approach to owning the real estate on Page 1, as opposed to clawing your way in, after bad news is attached to your brand.