risk management

A climate of fear is a risk management failure

By Robert Masters

A key element of the governance of any business or government today is its risk register. It should be the right hand tool for ministers, CEOs, chairpersons, boards, cabinets and advisory committees.

It is integral to the due diligence process and provides an overview of the degree of exposure, or ‘appetite for risk’ leaders are prepared to take with a policy, project, product, service or any new initiative.

What is surprising is that risk management programs appear to have fallen off the agenda for government and companies. The number of issues emerging in the media shows something is sadly lacking in the risk management process.

Public stoushes between corporate leaders, disruptions of ABC’s Q&A program, the goings-on of ICAC involving politicians and corporate leaders with party donations,  forgotten bottles of wine etc,  are just some of the examples that should have been considered in a risk register.

The public deserves better than what it is seeing at the moment, not to mention the climate of fear, misinformation and misguided debate that is going on.

It is accepted business knowledge that well-designed risk management plans can decrease problems encountered on a project by as much as 90 per cent. This applies equally to the management of any company or government.

Combined with very sound management methodologies, a robust and detailed risk management process can eliminate the headlines of today and diminish the issues arising unexpectedly, or provide the basis for sound, reasoned debate – not hysteria.

Unfortunately, many risk frameworks only cover operational risks and few provide sufficient analysis in relation to bad PR, potential issues and negative stakeholder reactions. Risk mitigation strategies are often at such a high level that they fail to provide sufficient guidance for an acceptable outcome consistent with the ‘appetite for risk’.

All corporate and government policies should go through a thorough stakeholder and operational risk assessment process before they are floated in the media to assess ‘community debate and reaction’.

Communities nor the proposers of policies or projects need a plethora of hysterical headlines creating fear, anger and angst. Six structured steps are all it takes to develop an effective risk register, but its effectiveness is in the detail of its planning, development and diligence.

ICG has extensive experience in creating and implementing comprehensive risk registers and  risk mitigation action plans; contact us before you embark on your next big project.

RM

 

Corporate reputation – good news can travel fast (if you work at it)

When it comes to corporate reputation, good news can travel fast, but we all know the news media likes a bad news story. It’s even better if bad news can raise the spectre of doom and destruction, be it physical or economic.

If the news media can keep its audience worried about an issue, chances are the audience will come back to find out more.  When an audience is hungry for a story, the media makes a buck.

The wall-to-wall coverage of actual or feared job losses at Holden, Toyota, SPC Ardmona and Qantas reflects the reality that bad news is big news.

In all of the wailing, gnashing of teeth and rending of garments, with political players staking out positions, one simple fact is forgotten: economies change.

From SMH Economic Editor Ross Gittins in his March 5 comment: “Most people have no idea how much turnover there is in the jobs market. Every month tens of thousands of people leave their jobs and a similar or bigger number take up new jobs. The economy is in a continuous state of flux.”

The economy is an active and living process. To focus on the bad news story overlooks the job gains that take place as part of normal economic renewal.

So what to do if your company has good news to announce?

The risk to corporate reputation from job losses ensures that significant resources are allocated to managing such announcements. However, companies often let good news slip out without the degree of thought and planning that is attached to the not so good news.

In the current political and economic environment, governments of all levels and persuasions are looking for good news stories, particularly if jobs are attached. What may seem relatively unremarkable in corporate terms could hold significant positive news implications.

Allowing for the engagement of appropriate resources to maximise the good news value of any major initiative or expansion should be on the agenda of all corporate communicators.

With bad news, the best that can be done is to minimise the damage. With good news, the worst that can be done is to ignore it.

Working hard on your next good news announcement will ensure your name appears in the news for the right reasons and buys the public good will that can come in handy when things may not be so bright.

JK

Providing medical research funds not good look for Swisse

Corporate sponsorships and conflict of interest

Corporate sponsorships are a fundamental marketing and PR tool but this is not to say they are easy to navigate or manage.

Vitamin supplement company Swisse recently experienced negative publicity because of a sponsorship arrangement with La Trobe University that was perceived by the public and media to be a clear case of overreach. The story was picked up by radio and ran for the better part of a week.

Had Swisse sponsored a new sports talent development program, it would have been an uncontroversial fit and a natural compliment to their celebrity endorsements.

Instead Swisse sought validation by throwing large amounts of money at research in ‘Complimentary Medicine’, an area where the fit is awkward and conflict of interest is easy to allege. It only took one voice to create negative coverage but I’m sure plenty of other heads were shaking.

Finding the right corporate sponsorship arrangement is not as easy as it appears. External advice should have alerted Swisse to the possible hooks in their plan to sponsor health research. They either had bad or no advice, or chose to ignore whatever advice was offered.

It is certain the outcome was far from what they would have wished.

JK

ICG Auto

RMKA Auto tailors solutions for the vehicle industry

Automotive Public Relations by RMKA

The pace of day-to-day business in a dynamic sector such as automotive shows every sign of continuing to increase.

Add to this the tough and competitive nature of the Australian market and it is easy to see why many companies in the automotive sector carry limited specialist resources.

RMKA has identified a need for highly experienced key support services, both strategic and operational, to assist companies operating at all levels of the automotive industry.

The result is the creation of a suite of services that harnesses RMKA’s indepth history and extensive knowledge in automotive communication, and focuses these skills with the benefit of an equally comprehensive experience-base in the automotive business.

RMKA has identified key areas of support where the consultancy can add value by addressing specific communication, marketing and research needs.

RMKA Auto has been created to make it easier for executives in the automotive industry to match their needs to the skills and services that RMKA can bring in helping to meet business objectives.