The article "When Bad News Strikes" by Ed Silverman1 underlined the importance of organizations protecting the good names they have built over the years. But rather than waiting for the bad news to strike, it's essential to determine what threatens the good name and take steps to reduce, or even eliminate, those threats.
Logic suggests that helping to prevent crises should be a fundamental part of every senior executive's portfolio. To that end, we should:
• Take inventory of all of the potential risks that may arise from an organization's activities.
• Measure the potential losses associated with those risks, including the probability of the loss and the impact the loss would have. In order to determine which risks are most serious, establish your priorities for dealing with them.
• Consider your alternatives. This might include avoiding the risk, reducing the chance the loss will occur, or transferring the risk to some other party.
• Effectively implement your decisions throughout the organization, realizing that every employee has a role to play.
Management buy-in and ongoing risk monitoring are essential. Remember the warning that Warren Buffet issued: "It takes 20 years to build a reputation and five minutes to ruin it."