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Reputability LLP are thought leaders in the field of reputational risk and its root causes, behavioural risk and organisational risk. Our book 'Rethinking Reputational Risk' received excellent reviews: see www.rethinkingreputationalrisk.com We help business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Tuesday, 19 July 2011

"Roads to Ruin" is published

What causes organisations to face existential crises? And what turns crises into catastrophes?  "Roads to Ruin", a new report from the Cass Business School for Airmic, the risk managers' association, analyses the entrails of over 20 major crises of various shapes and sizes.  The report was previewed here last month.

The conclusions are stark.  As Anthony Hilton summarised it in today's London Evening Standard, the reasons for failure often emanate from the very top.  Inadequate board skill and poor leadership on ethos are a recurring cause of crises.  And adapting the title of an earlier blog, he wrote: "Too many boards live in a rose-tinted bubble". 

He also highlighted poor internal communication as a source of much of the problem, made worse by the insufficiently high status of risk professionals.  This issue was flagged here last year as regards the financial sector.  Since then, RBS' Chief Risk Officer has taken the road to becoming a bank CEO, fulfilling a prediction of problems that are developing with the arrival of CEO-calibre CROs.

Nick Edwards' interview for Reuters is here.  And Carly Chynoweth wrote a piece on the implications for NEDs in the Sunday Times.

An executive summary of the Report is still available free of charge here; where you will also find a link to buy a copy of the full report from Airmic.  Its well worth reading.

Anthony Fitzsimmons
www.reputability.co.uk

Friday, 15 July 2011

Police seige intensifies

The reputation of the Metropolitan Police continues to be under seige as Sir Paul Stephenson's former personal PR consultant was arrested yesterday.

The Daily Telegraph reports that the Met's Commissioner Sir Paul Stephenson, employed a former News of the World Executive Neil Wallis as his personal PR consultant from October 2009 to September 2010.  A member of both the newspaper editors' code of practice committee and of the Press Complaints Commission, Mr Wallis was arrested yesterday on suspicion of phone hacking.  Calls for Sir Paul's resignation have begun.

The reputation of the Met is being eroded at an alarming rate.  Things will continue to get worse until its leaders acknowledge the full extent of what is wrong and set out to fix the fundamentals.  PR won't fix anything.  It will only store up more trouble for the future

The Metropolitan Police Authority faces a challenge.  They need a police chief who is not only competent but also sufficiently free of baggage and independently minded to be able to recognise and deal with the Met's fundamental problems.  These urgently need fixing by someone who is determined to see and understand what they are.  The question is whether any career policeperson can have enough detachment.

Time for a very senior commander of intelligence and integrity to be snatched from the Military?  Some have considerable experience of security issues if not of policing.

Anthony Fitzsimmons
www.reputability.co.uk

Thursday, 7 July 2011

Police under Siege

It isn't just the News International that faces a whirlwind similar to that faced by BP.  London's Metropolitan Police faces one too.

The crumbling of the News of the World - or even its UK stablemates - may annoy some in the UK, but any gap will soon be filled by the market.  Indeed the Sun may soon start shining for NoW readers every Sunday.  But a collapse of confidence in the Metropolitan Police would be a calamity of a different order of magnitude.

Over the last few years, a succession of Metropolitan Police tactics have alienated increasingly large sections of the population. The use of "Stop and Search" powers alienated youths and visibly ethnic minorities. Use of  similar anti-terrorist powers has alinenated many muslims including some of the police force itself. The Met's reluctance to countenance the possibility of error - not to mention allegations of covering up - in response to the deaths of Charles de Menezes and Ian Tomlinson are just two examples of circumstances that have undermined trust with other sections of the UKs population.

The latest allegations are far more corrosive.  It is alleged that some policemen received large sums from the News of the World in exchange for inside information. There is also the possibility that something - whether more money, personal relationships, the desire for positive newspaper coverage, the scope for mutual blackmail or something else - led the Metropolitan Police to hold back from investigating the News of the World phone hacking allegations.  If true, this could easily cause trust in the police to plunge to depths not previously seen.  And to paraphrase Warren Buffet, you can lose trust in minutes but it takes years to build it.  Traditionally the UK's police were seen as trusted members of the community.  Without trust, traditional style policing won't work. 

Its no wonder that the Met has become obsessed with managing its reputation with the 'silent majority' that it relies on for support.  Brian Paddick, the well known former Deputy Commissioner of the Met, is quoted by the Financial Times as saying:
“The police tend to be obsessed with reputation management because British policing is based on the consent of the public and it is important to keep the trust and confidence of the public.”
Unfortunately, the Met is addressing the wrong problem.  Reputation management isn't the answer.  As Julian James, then trying to rebuild Lloyd's then battered reputation, perceptively put it:
"You soon discover that it can't be done by clever marketing or spin. You have to fix the fundamentals."
Fixing them doesn't mean fixing just the bribery allegations and the other historical grievances. It means fixing the causes: these probably include the culture, ethos and behaviour of the police and its leadership.

An imminent study of mainly private sector crises, will set out nearly twenty under-recognised but fundamental areas that can destroy both reputations and the organisations that own them.

From the outside, many - perhaps most - of the fundamentals highlighted in that report seem to need fixing at  the Met.  It will also have to exorcise the effect of what too many citizens see as a toxic track record.

The rehabilitation of the Metropolitan Police can't start too soon.

Anthony Fitzsimmons
www.reputability.co.uk