Managing Risk ... to Your Reputation

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					Feature | Risk Management

Adam Clampitt

Managing Risk … to Your Reputation

Preparation is paramount in surviving a reputational crisis

                                                                                                                                 We want answers. Photos: NASA; Stock

    N February of this year, a multinational                general public to members of Congress. When           that lacked the reputational strength of the case
    aerospace and defense contracting company               taken alongside its well-publicized charitable and    study above taken to task on the front page, in the
    paid nearly $500 million to the U.S. Depart-            educational initiatives, the company had              nightly news, online and, eventually, in Congress,
ment of Justice and the British Serious Fraud               conditioned the marketplace to be forgiving of its    the White House and the Pentagon. By the time
Office to settle a case involving allegations of            missteps. Simply put, the company’s efforts to        remediation efforts are underway, the news cycle
corruption. Given the sheer size of the penalty –           build a strong brand before a reputational crisis     has moved on and often irreparable damage has
and that of the company that paid it – one would            arose elicited a “that’s not the company I know”      been done.
think that the company would soon play the role             response when a blemish inevitably occurred.
of poster child in the ongoing debate surrounding                                                                 In such a perilous setting, the best – and often
proposed reforms of the defense procurement                 The word “inevitable” is key, because the current     only – way to protect a company from catastro-
system. But that has not been the case. In fact, the        reputational landscape is as challenging as it has    phic reputational damage is to proactively build a
company just won a multimillion contract from               ever been for defense contractors and the peace       strong corporate reputation that earns the
the Army Research, Development and Engineer-                operations industries. Budget deficits and good-      ongoing admiration and respect of customers, key
ing Command, just one of the many pieces of new             old-fashioned politics have dovetailed to drive       stakeholders and the public at large.
business they have garnered since the settlement            vastly increased government scrutiny. Meanwhile,
was announced.                                              every unfortunate misstep by a government             Simply put, it is about making enough deposits in
                                                            contractor involved with either large weapons         the corporate trust bank during periods of relative
How did the company emerge unscathed? Not                   systems or on-the-ground operations has               calm to ensure that withdrawals during crisis do
only was its performance for the customer as                emboldened opponents’ attacks and claims of           not leave an organization in the red. In a world
close to impeccable as exists in this day and age; it       “war profiteering,” an incendiary charge in today’s   where the media drives government policy and
aggressively articulated that record to public and          environment.                                          decision-making, effectively publicizing a strong
private stakeholders that run the gamut from the                                                                  record of results, an excellent management
                                                            The reality that most of these incidents are          structure and commitments to safety, ethics and
                                                            isolated – or that accusations are often inaccurate   Corporate Social Responsibility (CSR) is what
Adam Clampitt is a Vice President at Washington D.C.-       or politically motivated – simply does not matter,    enables a firm to emerge from a crisis with its
based Levick Strategic Communications and the former        even in cases where a single bad actor in a           reputation intact.
Director of Public Affairs Plans and 
Description: [...] the company just won a multimillion contract from the Army Research, Development and Engineering Command, just one of the many pieces of new business they have garnered since the settlement was announced. [...] develop a list of journalists, editors and bloggers who cover your industry and engage them through informal meetings and briefings.
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