Tweet to Risk in 60 Seconds
According to Internet Live Stats, 6,000 tweets are tweeted on Twitter each second – that equates to approximately 500 million tweets per day. That simple statistic shows the power and speed of social media. Its viral nature spreads messages that can uplift, influence, annoy or destroy faster than you can backpedal, retract, explain or recover. Twitter isn’t alone in its efficient and effective means of communication. Today, information is instantaneous via social media, online access, and television. Approximately 40% of the world’s population has access to the Internet, and that is growing every second (Internet Live Stats).
A corporation’s reputation has implicit influence on the bottom line. A strong, stellar reputation can affect customers’/consumers’ preferences and can provide for the ability to charge a premium for products and services. In the same vein, a weak, troubled reputation can negatively influence the financial value of the company. According to the Chartered Institute of Management Accountants (CIMA), 65% of chartered global management accountants consider the financial implications of reputational risk when making decisions.
Do you recall the Exxon Valdez oil spill of 1989? Over 11 million gallons of oil spilled into Prince William Sound killing hundreds of thousands of seabirds, bald eagles, seals, ducks, fish and other ocean life. It wreaked havoc on recreational and commercial fishing, not to mention tourism. The spill cost Exxon about $4 billion (The Economist), a 4% fall in stock price in the first two weeks (WSJ MarketBeat), and the stigma of forever being connected to environmental disaster. The Exxon Valdez oil spill happened during a time when the Internet was in its infancy and cell phones weren’t standard issue. Fast forward to 2010 – when you can tweet, post, and share a sound bite at the speed of light – to the BP Deepwater Horizon rig blowout that spilled over 200 million gallons of oil into the Gulf of Mexico. BP’s stock fell 22% (CBS News) with a cumulative cost of $42.7 billion at the end of 2013 (BP).
There are obvious brand and reputation risks such as catastrophic accidents, partnerships and investments, spokesperson behavior, marketing messaging, and employee performance. There are also less obvious risks like manufacturing pollution, poor product and packaging design, and social responsibility. Those less obvious risks are able to bubble to the surface in our instant-information culture.
Take marine debris for example. The EPA has reported that anywhere between 60-80% of marine debris is plastic, with 57-89% of that plastic coming from land-based sources. Imagine all the zooplankton in the Pacific Ocean – almost 1/3 of its total mass would equal the amount of plastic in the Pacific Ocean. As far as where it comes from, the EPA states there is growing evidence that the majority of the marine pollution comes from nonpoint source land-based runoff, primarily “…improper waste disposal or management of trash and manufacturing products.” Other data shows that plastic bags make up 13.5% of all shoreline litter in California. Speaking plainly, plastic doesn’t occur in nature, humans create it, and some of it is ending up in our waters.
Currently there are campaigns which highlight the need for taking responsibility for packaging waste and go as far as calling out specific companies – via internet, social media and traditional press – to take action. Additionally, there are initiatives underway that make use of plastic and other marine debris to create art that educates. Even the National Oceanic & Atmospheric Administration (NOAA) has a Twitter handle and is getting the word out.
As more resources are put in place to identify sources, the effects on corporate reputation (and financial standing) will be swift, negative, and possibly catastrophic. The best defense is a good offense – designing for next life, recycling the right things the right way, collaborative partnerships to improve infrastructure, etc. Get people tweeting about what you are doing to prevent an environmental disaster versus how you’re going to clean up after the fact.
We know brand and reputation are important, yet fragile and vulnerable to our instant-information society. Understanding what influences, and more importantly, what puts them at risk, is key to harnessing that rapid-fire tweeting world and to creating a profitable, responsible corporation.
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