Earlier in October, the Wall Street Journal published an interesting analysis of a recent Deloitte survey, titled “Exploring Strategic Risk.” From these Deloitte results, it has been determined that companies in every industry now consider reputations to be the most important strategic risk and threat to their business models. The Deloitte survey notes that recent high-profile incidents where brands’ reputations have suffered have brought this issue to the forefront of every business leader’s mind.

Information travels quicker and lingers longer these days, and businesses everywhere are scrambling to make sure they’re not the next butt of the joke in either social or traditional media outlets. However, while most businesses are putting more emphasis on addressing both reputation management and other strategic risks, only 13 percent of executives surveyed said their risk managements programs supported their businesses “very well.” It goes without saying that this number has to go up, but in order to do this, reputation management must be put in the proper context.

Reputation is the external reflection of internal success

Somewhat unsurprisingly, executives ranked technology as their second-highest strategic risk concern. They cite the potential for emerging technologies to disrupt current business models as their main point of concern, but this only paints part of the picture. The elephant in the room is that these same disruptive technologies—namely social media—are also responsible for the rising importance of reputation management. This makes social media a fulcrum of sorts on the seesaw of business management. On one end is reputation, and on the other end is a company’s business model. With the proper application of strategy, brands will find balance.

As we explain in our Amazon bestselling book, The Social Employee: How Great Companies Make Social Media Work (McGraw-Hill, 2013), the proliferation and adoption of social media is here to stay. These technologies simply have too many positive benefits to the ways in which both people interact and companies do business. This Deloitte survey is particularly compelling because it shows precisely how companies are juggling questions of reputation, technology, and business models—and it’s great to see them doing so.

However, it appears that many business leaders still aren’t recognizing that these questions are interlocked and that the only way to address one of these questions successfully is to address them all simultaneously. As we argue in The Social Employee, a brand cannot communicate externally unless it first learns to communicate internally. Put in context of the Deloitte study, if a company is concerned about managing its reputation, it must first make sure it has the right combination of technology and organizational infrastructure to foster a culture of engaged social employees to help them manage their brand.

In the social era, businesses must learn to move away from a culture of protectiveness. Rather than viewing technology and disruptive forces as threats, companies must be prepared to examine which of these tools can help them with their business processes. Further, if they keep finding that business as usual is being disrupted, then maybe it’s time to reexamine business as usual.

Executive leadership is stepping up

Of course, we understand this argument is probably a little neater on paper than it may be in actual application. But this isn’t to say that it’s impossible—quite the opposite. Our main goal in writing The Social Employee was to show that several companies have already put these pieces together. But the dawning age of the social employee calls for strong social executive leadership, someone to catalyze internal culture by embodying their brand’s mission, vision, and values.

Here, the Deloitte survey provides reasons to be optimistic. According to the WSJ article, “Two-thirds of companies surveyed stated that their CEO, board, or board risk committee now has oversight when it comes to managing strategic risk.” While the article goes on to note that there is some variation among who actually owns the final decision in these matters, it’s encouraging to see executive leadership showing such a willingness to examine this key element of doing business.

After all, a brand’s reputation, the tools it uses to do business, and the philosophies it uses to guide its business processes are, for lack of a better term, serious business. In the future, we hope that brands won’t just be looking at the risks involved in these key elements, but also at the risks involved in doing nothing at all.


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“Great brands have always started on the inside, but why are companies taking so long to leverage the great opportunities offered by internal social media? . . . The Social Employee lifts the lid on this potential and provides guidance for businesses everywhere.” JEZ FRAMPTON, Global Chairman and CEO, Interbrand


Amazon_agold-bookThe Social Employee offers an unparalleled behind-the-scenes look at the social business success stories of some of the biggest brand names in the business world, including IBM, AT&T, Dell, Adobe, Southwest Airlines, Cisco, Acxiom, and Domo. These cutting-edge brands have all come to the same realization: the path to social business lies through empowering the social employee.

The brands that leverage their employee base in order to engage customers and prospects through social media are the ones destined to win the marketing wars. This book not only details the astronomical rise of the social employee, but also outlines the innovative methods that leading companies have employed to foster cultures of enthusiastic and engaged workers.

FORMcGrawHill_RedEWORD by David C. Edelman, Global Co-Leader, Digital Marketing & Sales Practice, McKinsey & Company

AFTERWORD by Kevin Randall, Vice President of Brand Strategy & Research at
Movéo Integrated Branding, and a columnist for Fast Company

Download ~> Free Chapter 3 – “Brands Under Pressure”

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