Enterprise risk management linking reputation crisis business continuity
Enterprise Risk Management Summit It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. Warren Buffet Reputation risk is consistently one of the top ten risks of any executive / board level survey. Question: Why? As our business strategies shifted from selling products and services to selling experiences and solutions, we depended on brand and reputation to accomplish it. At the same time, technology advances gave consumers unprecedented access to information, communication, transparency, and global forums, which shifted the power from companies to consumers. It is essential in today’s world that reputation is linked with enterprise risk management on one end and crisis and business continuity management on the other end. Our brand and reputation are more important than ever before. So where does risk management fit into all this? We are all over the place! In risk management we are asked to work at the highest level with enterprise risk management to lowest level with business continuity management. We are expected to manage and respond to familiar (i.e., well-defined domain) and unfamiliar (i.e., complex domain) risks. We need to manage the traditional downside of risk as well as capitalize on the upside risk. To do our job we operate across organizational functions and domains but with limited authority and priority. We may be accountable for risk management; however, specific persons that work with the risk own it. It is our job to ensure we have the system, processes, capabilities, transparency, and the methodologies in place to allow people to properly do risk management. Linking enterprise risk and reputation with crisis management and business continuity is a challenge for us. We have to work within our confines of the organizational structure, which at times is design to change once a crisis has occurred; that is, crisis is the only catalyst for change. Let’s look at a few structural changes we can run into.
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Enterprise risk management linking reputation crisis business continuity
- 2. 2 Linking reputation management, crisis management & business continuity NOVEMBER 2016 Sean S. Murphy CEO, Lootok Andrew Miller Executive in Training, Enterprise Risk Management , ADP
- 3. 3 Speakers Sean Murphy CEO & President Lootok Andrew Miller Executive in Training, Enterprise Risk Management ADP
- 4. 4 What we will cover • Overview of the problem • Enterprise risk management • Reputation risk management • Crisis & business continuity management
- 5. 5 It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently. —Warren Buffet
- 6. 6 World numbers 220KNumber of photos posted on Instagram per minute 300KNumber of tweets per minute 5BNumber of daily Google searches 80%Percentage of Americans online 4.9Average years of CEO tenure at Fortune-500 companies 2.5MNumber of pieces of content shared every minute on Facebook 40-50Average year lifespan of Fortune-500 companies 1.5BNumber of people with pocket sized devices
- 7. 7 Our humble beginnings It took mankind roughly 24,000 years to produce 5 terabytes of data. (250,000 years of DVD quality video. Venus of Willendorf Circa 22,000 BCE First iPod 2003
- 8. 8 Information comes of age We now generate 5 exabytes of content every 2 days. (250,000 years of DVD quality video) Today
- 9. 9 If I was down to my last dollar, I would spend it on public relations. —Bill Gates
- 11. 11 It is a lot easier to start a fire than to put one out. —Eric Dezenhall
- 12. 12 Too big to fail
- 13. 13 If you live by the brand, you die by the brand. —Daniel Diermeier
- 14. 14 Build a common language
- 16. 16 Most of the measures common in the practice of ERM can be placed in one of two categories: those measures related to the degree of the organization’s solvency, and those related to the volatility of the organization’s performance on a “going concern” basis. —Casualty Actuarial Society
- 17. 17 Integrated assurance • Governance, Risk Management, and Compliance (GRC) • Mergers, acquisitions, divestures • Scenario Planning INFLUENCE
- 20. 20 Reputational management … by the time a more conclusive picture of guilt or innocence emerges … the coverage has often moved on, leaving the original impression largely unrebutted. —Paul Farhi
- 22. 22 Reputational Terrain Society Importance Audience Interest Daniel Diermeier Low Low High High Facts Analysis and Interpretation Stories Live Updates
- 23. 23 Media
- 24. 24 Intelligence
- 25. 25 Crisis & business continuity management
- 28. 28 Business continuity Risk assessment 9 Rs Relocate Reassign Repair/replace Reinforce Replicate Redundancy Risk transfer Relinquish Rapid
- 29. 29 Crisis cards What do these words mean to you? • Crisis • Incident • Interruption • Disaster • Catastrophe • Disruption What are the criteria for a crisis? • Public knowledge? • Injuries/fatalities? • Financial loss? What amount? Fragments of blue plastic are found in your product in the morning. All product from the previous day’s production are still within your control.
- 30. 30 Prioritization activity Attackers & defenders Identify your most vulnerable high impact equipment items using competitive strategies.
- 31. 31 Attackers Instructions • Try to cause maximum damage to the business by attacking three equipment items. • Write your selections, why you chose these items and how you would attack them. • When done, fold your card in half.
- 32. 32 Defenders Instructions • Try to keep the business afloat by choosing three equipment items to protect from the attackers. • Write your selections, the strategies you would use, and your reasoning for doing so on the back of your defender cards. • When done, fold your card in half.
- 33. 33 Let’s play!
- 34. 34 Questions?
- 35. 35 Thank you!