Business reputation management
Dom Cobb, the main character of Christopher Nolan’s movie “Inception,” released in 2010, has several monologues about ideas. For Dom, ideas represent the most powerful force in the universe. He compares them to viruses: “Resilient…highly contagious.”
Here’s the trick: in contrast to brand image, which organisations engineer from scratch, business reputation management emerges from the perspectives of others. These stakeholders include individuals both inside and outside the company.
In other words, public opinion shapes your company’s reputation. Remember, people buy trust, not just products or services.
What happens when cybersecurity joins business reputation management costs?
In our digitalised and interdependent world, the rise in cyberattacks and data breaches has placed many companies in the spotlight.
Although attacked organisations may present themselves as “victims” of cybercrime, shareholders, partners, employees, and public opinion perceive these organisations as having failed to protect their assets and data properly. Thus, the concept of business reputation management becomes critical.
When exogenous or endogenous factors trigger a crisis, security and data breaches rise to the top of the Board’s agenda.
The major risks faced by companies in relation
The four major risks feared by companies are:
- Financial risk and cash flow control
- Customer/employees’ personal data risk and legal consequences
- Risk of business interruption
- Reputation risk
These major risks feed into each other.
A Forbes Insights Report, in collaboration with IBM, indicates that nearly half of all organisations—46 percent—experience reputation and brand damage due to a security breach. Additionally, 19 percent suffer from reputational damage caused by a third-party security breach or IT system failure.
The financial impact by cost category
The financial impact by cost category is as follows:
- 29%: Reputation and brand damage
- 21%: Lost productivity
- 19%: Lost revenue
- 12%: Forensics
- 10%: Technical support
- 8%: Compliance/regulatory
However, cyberattacks and ransomware entail more than just immediate financial costs.
Understanding the cost of business reputation management
It remains challenging to quantify immaterial costs, such as loss of credibility, client confidence, and trust among employees and partners. Only companies that have endured significant cyberattacks can truly testify to the long-term damage they suffered.
Avoiding negative headlines
So, how can companies avoid making headlines and reduce costs if a cyberattack occurs? Especially when ideas are “Resilient…highly contagious.”
A company facing a cyberattack has three deadly enemies:
- The lack of time
- The lack of internal coordination
- The lack of technical and professional knowledge
Conversely, it can find three allies:
- A cybersecurity culture that goes beyond mere awareness
- Business-centric crisis processes and response plans
- Top technologies and trained teams
The importance of people, processes, and business reputation management
In the PPT Framework—People, Process, Technology—people represent the most valuable assets in a company. Employees handle increasingly sensitive data.
After the 2020 study co-published with Professor Jeff Hancock from Stanford University, security company Tessian reviewed its findings in 2022, post-pandemic.
- Phishing emails: 52% of employees clicked links because they appeared to come from senior executives, up from 41% in 2020.
- Customer loss: 29% of employees mistakenly sent emails to the wrong person, an increase from 20% in 2020.
- Scams via text messages: 56% of employees received scams via text, with 32% complying with the requests in those messages.
Education and tailored cyber awareness plans reduce incidents, protect reputations, and transform employees into genuine human firewalls.
The importance of proactive communication
If an unexpected crisis arises, corporate and operational communication should consider business as usual. Proactive and informative communication, delivered on time, is crucial for an appropriate response.
If you doubt the cost of reputation, consider Snapshot and the infamous 2018 tweet from Kylie Jenner. This single tweet caused a 6 percent drop in stock market price, equating to $1.3 billion.
Conclusion
Contact us to help you reduce cyber risks and protect your business.
Ideas are “Resilient…highly contagious.” Some of them are valuable, and this can benefit your business.
Safeguard Your Brand with Reputation Management
Speak with our experts to discover how business reputation management can protect and enhance your company’s image.