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I began calling for the proper management of social media risks in 2009. Back then we were still trying to convince people they should use the various social media tools to advance their associations and nonprofits. The big fear was (and still is) “what if someone says something bad about us?” There are numerous examples of social media horror stories such as the Domino’s Pizza video, United Breaks Guitars, Greenpeace’s attack on Nestlé’s Facebook page, Susan G. Komen versus Planned Parenthood, and Progressive Insurance. Bad public relations incidents are still the most significant risk with social media but is also very manageable.
As I wrote in my first post on social media risks for SocialFish in May 2009, The Hidden Risks of Social Media: It’s Not What You Think,
Lack of active participation in social media may be your greatest risk. Your association may not have a formal social media strategy but many of your employees and members (especially chapters) are already participating through LinkedIn, Facebook, Twitter, Flickr, YouTube, FriendFeed or Ning, just to name a few. People are conversing about your association – if they aren’t talking about the association, then you have a larger problem.
Social media has changed how we live and work. It is a fact of life and you better be prepared to deal with bad or negative publicity whether it starts on social media or is played out on the various outposts.
Altimer Group, a consultancy founded by Charlene Li, “provides research and advisory for companies challenged by business disruptions, enabling them to pursue new opportunities and business models.” As a research organization Altimeter focuses on how disruptive trends can be used by organizations. Social media is definitely a disruptive trend. The firm’s most recent research was on social media risks addressed in its report Guarding the Social Gates: The Imperative for Social Media Risk Management. They also hosted a webinar on the topic. As a risk management consultant I’m always pleased and excited when other people and organizations talk about the importance of risk management. I strongly encourage you to read the report and listen to the webinar. Share the information with the key people within your association or nonprofit.
Social media is unusual because it is a source of risk but also a valuable resource for mitigating risks especially negative publicity. Not all PR crises start on social media (nasty tweet or video) but they are all “played out” on social media. For example the Susan G. Komen incident started with a corporate decision reported in the press but quickly moved onto the social media stage. The Penn State scandal started with a newspaper report that promptly moved to the online world. The teachable moment is that if your association is not ready to respond quickly via social media you are at a distinct disadvantage. You will get criticized not only for the original incident but how you handled it.
There is nothing new in the report, just reinforces what I and other risk management types have been saying. Every organization regardless of its size should identify and analyze its risks arising from social media and develop its techniques to manage these risks. If your organization already has a risk management program adding social media to the mix is easy but few associations have such a plan. Croydon Consulting (me) has experience with managing these risks. I’m a member of the SocialFish team so often partner with Maddie Grant and Lindy Dreyer to address these risk management issues. We are also working with Epic PR Group to further enhance our capabilities.
Social media is too important to your association’s success to leave managing the risks to chance or fate. Follow the steps provided in Guarding the Social Gates or seek help from the many resources available (like me). Sorry for the blatant sales pitch but this is one issue that can’t wait. Good luck.
Many consider the use of social media as a very risky endeavor while others think this is a “manufactured risk” used as a reason not to engage in social media. After assessing the threat to your reputation, social media is not a risk – manufactured or otherwise – but rather an excellent technique for managing this exposure.
My most recent post, Social Media, Risks and Urban Legends: What are you afraid of?, discussed the term “manufactured risk” coined by Jeff DeCagna of Principled Innovation, LLC. A “manufactured risk” is one everyone talks about, worries about and takes to the extreme even though the risk is not that severe. I compared it to an urban legend – there is a grain of truth but the risk takes on a life of its own. The loss of control of your brand due to social media is a manufactured risk.
Peggy Hoffman of Mariner Management & Marketing asked in her comment to my post “. . . I too was struck by the wor[d]k risk and his great defn of manufactured risk. Maybe there are 3-5 questions we can ask ourselves to determine if a risk is manufactured or real – your thoughts?” Not one to back down from a challenge (unless it involves possible bodily harm), a risk assessment can transform a manufactured risk into a “manageable” one (another of Jeff’s risk terms). In a risk assessment you:
- Define the risk
- Analyze the risk (frequency and severity)
- Set your risk priorities
Define the risk
Losing control of your brand is not the risk since you never controlled it either before or after the arrival of social media. The best you can do is manage your reputation. John Eckman wrote in his blog, Open Parenthesis that:
Your brand is not what you say it is, but what your prospects, customers, partners, and employees say it is. In short, your brand is what the Internet says it is. You influence this not through marketing but through creating appropriate experiences and getting users exposed to those positive experiences. (Micro-interactions are ultimately assembled into and become brands).
The real risk is damage to your reputation by whatever cause also known as reputational risk. As you define your reputational risk which , consider:
- What are the values exposed to loss? Your reputation.
- Perils causing the loss. The main peril is someone publishing damaging information about your organization such as an expose or the disclosure of an awful incident (allegations of child molestation, employee embezzlement, product recall, or death at your facility). Reputational risk existed long before social media (i.e., United Way of America, The Nature Conservancy).
- Financial consequences. A damaged reputation can have significant financial consequences. Negative public relations or media coverage can lead to decreased revenue due to loss of members, donors and sponsors and reduction in donations, conference attendance, certifications, and advertising. Your expenses may also increase because of unexpected legal fees, advertising costs, and hiring public relations consultants to help with the crisis.
After defining the risk, you identify the potential frequency and severity of the risk to set priorities for managing each risk. Frequency is an estimate of how often a risk may occur, you can assign one of the following grades:
- Almost nil – Extremely unlikely
- Slight – It could occur but hasn’t
- Moderate – Happens once in a while
- Definite – Happens regularly
Severity defines the potential financial consequences of a risk – you can either keep or retain (pay for) the risk or need to transfer the financial risk to another party usually an insurance company.
- Slight – You can retain the loss, the financial consequences are insignificant.
- Significant – You can’t retain the entire risk and must transfer a part of it.
- Severe – You must transfer the whole risk as it poses a threat to your survival.
Based upon the assigned frequency and severity grades you rank the order in which you address each risk. An exposure graded with “definite” frequency and “severe” severity needs to handle first.
For most organizations the reputational risk frequency level will be “slight” however a controversial organization may assign a frequency grade as “moderate” or even “definite.” The severity rating will be between “significant” or “severe” depending upon the nature of your organization. Base your ratings on an incident receiving significant media coverage; not when “someone says something bad about us.”
Social media enables your organization to monitor what people are saying/writing about your organization, employees, competitors and industry so you can prevent an incident evolving into a crisis. Justan Kownaki supports this benefit in a Social Media Club blog
No one controls their brand, but social media allows you better manage your brand’s perception in real time. More importantly, it helps you understand what others are saying about you (and why), so you can identify any disconnect between what YOU think your brand stands for and what OTHERS think your brand stands for.
Additionally social media is crucial to your crisis communication plan by minimizing the adverse impact on your reputation. An analysis of the recent recall of Maclaren Strollers offers insight into the benefits of social media in a public relations/media crisis. Jeff Rutherford in his blog, Using Social Media for Crisis PR – What Maclaren Could Have Done Differently, offers an excellent road map for how Maclaren could have used social media to handle its product recall better. Maclaren could have used Twitter, Facebook and reach out to parent bloggers to convey its concern about the recall and how to order the hinge covers to prevent future finger amputations.
So instead of being a risk (manufactured or otherwise), a well-designed social media strategy with tactics is an excellent technique to manage your reputational risk. Use social media to listen for what people are saying and crafting your response. Be sure to update (or adopt) your crisis communication plan to include social media to garner its benefits.
Jeff DeCagna of Principled Innovation, LLC spoke at the ASAE Social Media Workshop on November 6. His talk, Connecting Social Tools to Organizational Strategy and Capability focused on how important strategy is in your social technologies efforts. His second question in Jeff’s Top Ten Social Strategy Questions for Association Leaders got my attention with the word “risk.” How much business risk are we willing to accept? Risk assessment is an important part of any strategic discussion not just social technologies.
Jeff defined three types of risk – manufactured, manageable and momentum. Manufactured risk caught my attention because the perceived severity of a manufactured risk often causes an organization to not pursue a specific strategy because it’s too risky. A manufactured risk in one that everyone talks about, worries about and keeps them from acting. The risk is usually taken to the extreme, worst case scenario threatening the organization’s survival. To me people repeat the concerns so often the risk takes on the persona of an urban legend . Urban legends are neither false nor true but usually have a grain of truth as does a manufactured risk. But people don’t analyze the exposure to decide if the potential outcome is truly that awful or devastating. People just use the manufactured risk as a reason not to do something.
They’ll say bad things about us . . .
The most common reason (manufactured risk) an organization resists social media is that “someone may something bad about us, our members, clients, sponsor, etc.” The grain of truth is that yes people will say something bad about your organization or members – it is inevitable – not everyone will like what you‘re doing. The exaggeration is that the comments will cause irreparable damage possibly leading to its demise. Damage to your reputation is a risk that you can and should be managed, but the final outcome is rarely the end of your organization. When an organization does fail it is due to inherent structural or cultural faults that existed before the bad press.
Wendy Harman , Social Media Manager of the American Red Cross (ARC) , spoke at the workshop and helped debunk this manufactured risk. Wendy joined the Red Cross in late 2006 when Hurricane Katrina was still a trending topic. Her task was to stop people from saying bad things about ARC on the internet. However when Wendy began listening in the 400+ mentions of ARC each day the majority were very positive. According to Wendy in an interview with John Haydon, “People are more generous and more willing to engage than we gave them credit for being. Now, we’ve been able to figure out how to start building an online movement of people empowered by us and themselves to make a difference.”
What to do . . .
To prove this to yourselves and your bosses do both a Google and Twitter search for your organization’s name, acronym and industry topics to see what people are saying about you. I think you’ll find most comments are positive or a worse case no one is talking about you. It’s better to know what they are saying so you can respond appropriately. A quick review of public relations and marketing failures such as United Breaks Guitars, Amazon.com’s snafu with listing its gay, lesbian, bisexual and transgender books in the “adult” category and the “Dell Sucks” campaign were the result of the companies not responding to criticism by its customers. Greater damage is done by not responding or replying in a defensive or patronizing way. A quick and honest response goes a long way plus your members will come to your aid. Don’t let the manufactured risk of “bad public relations” keep your organization from engaging online with its members and other stakeholders. There are bigger risks to manage than this one.
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About this blogLeslie White consults to associations and nonprofits about risk management and risk and social media.
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