The World Economic Forum reports that more than 25% of a company’s market value is directly attributable to its reputation.
Yet, according to a Deloitte survey, only half of business leaders can identify reputational risk events and only 53% have the capacity to analyze these risks and predict their impact. Part of the problem is an emphasis on preventing only the most catastrophic, worst-case scenario events.
Large-scale reputational disasters compel our attention, and the social media age is particularly rife with opportunities for sudden public meltdowns. All it takes is one post from a customer or employee for a company’s values and reputation to be put on public trial.
The bigger risk, however, is the “slow-burn”—a culmination of numerous decisions, even if intentional and aligned with company goals, that companies make every day without considering the long-range potential consequences.