All businesses today face significantly higher levels of risk – just listen to boardroom discussions or rate skyrocketing corporate insurance rates.
In our ubiquitous media universe, now a 24/7 environment, the lines between traditional media and digital platforms have blurred, making them somewhat indistinguishable from each other.
Customers, competitors, employees, advocacy groups, unions, investors, regulators, vendors, and the media instantly see any post, whether the post has been approved by the company or not.
Against this backdrop, boards and leaders should be reasonably educated on three potential crisis areas in 2023: Cyberattacks, Unauthorized Leaks, and Political Missteps
In the face of such Black Swan events, last year’s thinking is ineffective at best. Those ill-prepared will suffer more than their 15 minutes of shame.
So, throw away your crisis plans. Most won’t work in 2023.
My password has been compromised. Now I have to rename my mother
Cyberattacks are one of the most complex problems facing companies: Attacks plunder budgets, create business disruption and put reputations at risk.
“If measured as a country, cybercrime, which is projected to inflict damage totaling $6 trillion globally in 2021, would be the world’s third largest economy after the United States and China.” reported Cybercrime magazine. That number is projected to rise to $265 billion by 2031. Estimates suggest global losses could reach $10 trillion by 2025. So the financial costs of an attack on a single company in 2022 could be in the tens of millions.
There are three basic categories of cyber or digital attacks – all have reputational consequences.
Cyberattacks can come from outside the organization: criminal syndicates, foreign competitors and state actors can try to steal or destroy data, money and intellectual property. The goals of bad actors can vary: interruption, extortion, ransom, retaliation, denial of service, or simply warning of their attack capabilities.
Troll and activist attacks can also target a company’s reputation through individual attacks against high-level executives or boards of directors. There are also conflicts with workers or other advocacy groups, product or service liability retaliation, damage to brand or reputation, and operational errors, which are exacerbated by fact-gathering and inadequate communication.
Finally, disgruntled current or former employees can carry out cyber attacks from within the company. These attacks are motivated by retaliation for disagreements, commercial espionage, and financial gain.
Time is not on your side
In the Righteous Brothers’ 1965 hit, free melody, the duo sang, “…time goes by so slowly, and time can do so much.” Charming and romantic.
Today, the instant digital world proves that time is not on our side. As a result, we have to think about time very differently than we did just a few years ago.
In our groundbreaking 2011 book, Digital Assassination: Protect your reputation, brand or business from online attacksWe have established a standard digital response process, as well as an eight-hour response time for digital damages.
Today, this concept is even more important, as the speed and scale of attacks and leaks have increased dramatically. We are now facing a “two hour digital day”.
In today’s instant mobile environment, when your business is attacked or a sensitive document is leaked, you have an hour or two for an initial response. Delays in response and conflicting statements written in legalese or unintelligible result in a fiasco.
Unfortunately, in many corporate cultures, business leaders and their advisors are simply not equipped to operate at digital warp speed.
How internal communication vanished in cyberspace
Leaked documents are posted online and distributed at warp speed. It has transformed the way we think about, prepare and protect these so-called internal documents. Most communications must now be treated as if they were public.
Recent headlines remind us that no institution is immune to leaks: Apple, AmazoniaBeyond meat, Ferrari, GoogleMeta (Facebook), Superand even SCOTUS, all had to clean up following public cyclones caused by unauthorized leaks of internal documents.
In an absurd turn of events that reveals how the leaks come from everywhere, even Conti, a Russian group identified by the FBI as one of the most prolific ransomware groups of 2021, has suffered the consequences of leaked documents.
You’re on the news. And now?
While the leak of the SCOTUS draft opinion to Dobbs elicited a wide spectrum of reactions, many people were appalled that the sanctity of the court’s deliberations had been violated.
In the face of the unprecedented leak, Chief Justice John Roberts’ response was spot on (from a crisis management perspective). He confirmed that the leak was an authentic draft, that the judges were still deliberating, that they often used draft opinions to try to persuade each other, that no final opinion had been voted on, and that he would lead an investigation into the source. of losing.
Business leaders would do well to examine the chief justice’s response to the crisis and follow his example when faced with a similar situation.
When creating internal documents there are simple principles to consider. First, define what you want to communicate and understand that the document may be made public. What exactly is its purpose? Is it meant to share information, serve as a call to action, or change minds? What’s the tone?
Secondly, the message must be conveyed clearly and concisely in plain English. As British social commentator JB Priestley put it, “The more elaborate our media, the less we communicate.”
A quick and simple test is to ask an entry-level employee to read the document and then tell you a thing or two they remember about it. If their comments don’t understand your key messages, consider rewriting them.
If you can’t stand the heat, step out of the media kitchen
Some CEOs have spoken out on a variety of policy issues. This is a problem for boards of directors and companies as loud internal or external groups continue to push business leaders to publicly comment on controversial issues.
One company that has been harmed by the talk is Disney, the current case study of how not to deal with stakeholders. Disney he did little publicly to address Florida’s new law until it was enacted. The company didn’t sign the petition that numerous state companies issued before the proposed policy became law, then stepped in, seemingly unprepared, bluntly announcing the opposition at its annual shareholder meeting.
In today’s polarized politics, no matter the issue, about 45% of people will support you and 45% will be against you, and about 10% will be undecided. The harshness of any pushback depends on the seriousness of the problem and how the undecided are supported.
It’s not that CEOs should keep quiet about the issues, but rather it’s important to understand all the circumstances, the players, the timing and the dynamics, and then choose your own fights.
So, before embarking on the political arena, leaders and boards should review answers to basic research questions: Is the issue’s mission critical to the business? Were the leaders briefed on where all the parties are? Will hiring a position help or hurt the company’s shareholder value, sales, reputation, and ability to attract and retain top talent?
Are you ready for digital assassination in 2023? In the 24/7 media environment, corporate survival requires new thinking and critical adaptation accomplished at lightning speed. This is not a slow evolution. Those who fail to adapt will be reduced to a footnote in corporate history.
Richard Torrenzano is the Chief Executive Officer of The Torrenzano Group, which helps organizations take control of how they are perceived. For nearly a decade, he served on the management (policy) and executive (operations) committees of the New York Stock Exchange. Richard is a sought-after expert and leading commentator on financial markets, brands, crises, media and reputation management.
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