Instantaneous Internet Requires New Thinking About Time
Reputation Is The New Corporate Capital
NEW YORK, Wednesday, May 20, 2015 — “Throw away whatever crisis plans you may have. They won’t work in today’s digital world,” says noted crisis expert.
Speaking in London before a private group of European board directors and C-suite executives, crisis expert Richard Torrenzanowarned, “Recorders and video cameras in every smartphone. Social media’s voracious appetite for sensation. A pervasive desire for 15 minutes of fame. These elements are fusing at an alarming rate and reaching critical mass, threatening every corporation, institution or organization with their 15 minutes of instantaneous, global shame.
“Crisis response plans completed as recent as 12 months ago should be dragged into the trash icon,” Torrenzano said. “In the digital world, a year ago might as well be a decade. To prevail during a crisis today, new thinking, new skills and new plans are needed that recognize the depth and breadth, speed and magnitude of today’s online world.
“Mobile is now the prince with older users and it is the king among millennials,” he said. “Soon half of the global population will be made up of mobile users, and that percentage is growing rapidly. So every corporate crisis plan must be reconceived for small screens, terse messaging, micro-video and consumers who are adept at meshing screens. In the US today, there are 80 million Millennials and this has just become the largest group in the workforce.
Richard Torrenzano is chief executive of The Torrenzano Group, a reputation and high-stakes issues management firm specializing in building and protecting reputations, helping clients grow their business and enhancing brand and shareholder value. The Torrenzano Group helps organizations take control of how they are perceived™.
The Torrenzano Group managed an array of crisis situations, including: The largest U.S. corporate punitive damage award, the highest profile university sexual abuse case, employee sabotage that threatened the very existence of a company, environmental contamination, and the complex $4 billion recapitalization of Long-Term Capital Management by a consortium of 14 of the world’s largest financial institutions.
According to Torrenzano, “despite the ever-growing awareness of how crises and disasters instantaneously affect companies, table-top exercises and dress rehearsals are still not given much attention by management.
“While social media evolves on fast forward — cultural, political and security environments are producing more uncertainty than any time since the 1960s,” he said.
“With terrorism on our shores, new levels of activism on our streets and in boardrooms, Ebola and other diseases emerging, threats to our food and water supply and geographic political instability, as well as technology breaches compounded by privacy issues — all pose new threats to employee health and well-being. So corporate crisis plans need a significant fresh look at ‘what ifs’ really are. In the face of a Black Swan event, what worked well last year likely has significant deficiencies today.
“Plans must now define what constitutes crises for particular organizations — by industry, by geography, by history, and by what has just happened to your neighbor,” Torrenzano said. “Today our media world is far broader and now includes sponsored attacks that damage reputation and brand or otherwise diminish leadership credibility, sales or shareholder value. It should continue to include preparation for — surprise regulatory or government actions, product failures and recalls, lawsuits, major business loss, sabotage or terrorism.
"In addition, activists and assassins today are sophisticated, business-like and armed with resources and knowledge,” he said. “They can assimilate embarrassing information and video quickly, disseminate it instantly and adjust campaigns rapidly to counter corporate defenses that are too refined and slow moving for the real world.
New “Eight-Hour Digital Day”
“The instantaneous nature of the Internet forces us to think differently about time … much differently than we did just a few years ago, in the age of traditional media,” Torrenzano said.
“We must view eight hours as 'One Digital Day' — a central truth that many business leaders have yet to recognize. In the new world of the ‘eight-hour digital day,’ when assassins mount an assault — something that must be acknowledged or answered — you have four to eight hours for an initial response as their post goes viral, especially in the context of today’s multi-screen, mobile environment.
“It isn’t always wise to respond, but if you had to, could you, quickly and effectively, within an ‘eight-hour digital day?’ ” Torrenzano said.
“Most corporate leaders and cultures, and importantly most advisors, are simply not built to operate at this speed. And many companies will be burned — perhaps several times — before they understand the new timing of an ‘eight-hour digital day.’
Reputation is the New Corporate Capital
“Reputation is the new corporate capital. Management needs new skills to raise it, leverage it and protect it,” he said. “Today, CEOs spend 20 to 30 percent of their time dealing with public issues. This will evolve and increase to include other C-suite and board leader assassins and activists’ attacks on capitalism.
“Therefore, companies that communicate regularly develop a positive reputation with constituents and build credibility and trust. Reaching out to key constituents — on a high frequency basis — is a pre-requisite to any good crisis plan.
“Unfortunately, most do not think about that when building a plan; they tend to only focus on isolated incidents, and that is a formula for significant problems,” Torrenzano said.
He concluded and provided the business leaders with his ‘Top Ten List’ to strategically manage the new corporate crisis.