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Risk audit, a profitable investment

Not a day goes by when we open the online version of any newspaper without encountering a reputational crisis: a company, a public institution, a cultural organisation or an NGO accused of illegitimate behaviour.

Some of the problems they face are technical: a toxic leak, an unexpected accident, a food contamination, a defective product sold by the thousands. I would venture to say that the problem is the least of the problems. Organising rescue teams, medical care for the injured or the return of damaged objects takes time and resources, but companies are more than prepared. In Spain, moreover, local and regional public administrations are very well prepared.

In recent decades, on risk analysis has become an autonomous theoretical and practical discipline of considerable importance.The main risks are in the field of large-scale industry and infrastructure, which require huge investments and are expected to pay off in the long term: oil exploration, construction of pipelines, construction of dams, etc. When these projects involve interventions in countries that are unstable for political, social or economic reasons, all the parties involved (companies, banks, governments) study the risks of the operation very carefully, as an error of assessment could ruin any institution, however solid it may be.

In addition, companies and organisations engaged in particularly hazardous activities are obliged by law to use special prevention programmes, with important communication implications.

Serious organisations dedicate time and energy to know the risks involved in their activity, both to themselves and to its participants (managers and employees, customers, partners and shareholders) and other publics. It is a manifestation of responsible leadership: not driving a car without proper checks, not listening to warning lights that something is wrong, etc.

The best people to do this, of course, are the internal staff. The engineers who have designed the processes, the operations managers, the facility managers, are the ones who know the guts of the organisation best, and who can most easily decide how to understand those risks, reduce them and make the company a "safe environment" - for insiders and outsiders.

But the damage that companies suffer as a result of a crisis is more about the reputational impact than the physical impact. We not only have to deal with the problem, but also take the initiative to report on the actions taken and what remains to be done: what we will do to ensure that it does not happen again, how we will compensate, and how we will get back to where we were before. Oh, and how we will apologise to those affected.

In assessing the communication risks of the public side of a crisis, on the other hand, there are many benefits to having external support. Undoubtedly, this can also be done in-house, especially if there is a reputation and corporate communication area that is prepared and authoritative. Prepared, because it knows the business inside out, and knows how to propose initiatives that solve real problems, in the language of the bosses, which is often quantitative. With authority, because without it, it is very difficult for a proposal - which normally involves spending something today to gain something the day after tomorrow - to be heard.

Your best ally

However, asking external advisors to conduct such a reputational risk assessment can have two important advantages. Firstly, because it overcomes the bubble perspective. It is completely natural for a well-functioning company (the others do not even consider doing a risk assessment, they just put out fires on a daily basis) to develop internally a high self-esteem. In such circumstances, thinking objectively about "what could go wrong and create a problem for us" is more difficult. It won't happen, or if it does we will be prepared.

An external advisor can either confirm that assurance, or remove the blindfold. Second, no matter how much authority the communications manager has, an external voice is often more likely to be listened to. Rather than being the 'enemy' of the internal communicator, it can be the internal communicator's best ally, because it will often confirm fears and suspicions already felt, and perhaps long neglected.

The external advisor can also help in another facet: the communication of these risks, which we could define as follows Heath & Abel como "the intentional exchange of information on health, environmental or other risks between interested parties".. Because the social responsibility of the institution means that these risks must be brought to the attention of the publics concerned.

Today, risk communication and crisis communication are moving towards integration. One of the great communication gurus, Mathew Seegerpoints out that in the past, risk communication was a separate discipline, aimed at convincing individuals and social groups to be aware of identified risks (smoking, drink-driving, etc.) and decide to change their behaviour, and therefore had a medical focus; whereas crisis communication was associated with the field of public relations and the need to repair a damaged corporate image after a crisis. In recent years, however, the two traditions have converged into a single discipline, crisis and emergency communication, because when developed in an integrated way, they are more effective.

Risk analysis comprises four steps: identification of the risk; description, both objective - with quantitative parameters - and subjective; risk assessment (serious or slight, indispensable or dispensable, type of consequences, etc.); and communication of the risk to the public.

The external advisor can provide invaluable assistance in exploring, diagnosing and addressing the reactions of the various stakeholders in relation to the first three steps, and fully in the fourth.

Because experience shows that no organisation emerges from a crisis successfully, or at least manages to limit much of the damage and recover quickly, without the help and favourable assent of its public.


 Yago de la Cierva
Consultant specialising in crisis communication

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