A new survey conducted by Forbes Insights on behalf of Deloitte Touche Tohmatsu Limited finds that more than three-quarters (76 percent) of board members believe their companies would respond effectively if a crisis struck tomorrow. But less than half of their companies have taken steps to be truly crisis ready.
Only 49 percent of respondents say their companies actively monitor to detect trouble ahead or have playbooks for likely crisis scenarios. Less than one-third (32 percent) report their companies engage in crisis simulations or training. And while 73 percent name reputation as a vulnerability, only 39 percent report having a plan to address it.
Deloitte’s new global survey report, A crisis of confidence, examines the gap between real and perceived crisis readiness in the eyes of board members and the large companies they direct. Respondents offer their insights and concerns about crisis risks and their companies’ level of crisis management maturity.
The report discusses:
· Board members’ confidence in their organizations’ crisis-related abilities
· Perceived vulnerabilities and companies’ efforts to address them
· The role of the board before, during, and immediately after a crisis – what to ask and do
· Practical steps to advance the journey from crisis awareness to crisis readiness
View the survey report and key findings infographic here.
]]>What is Digital?
In Hospitality Upgrade’s summer 2015 issue, R.P. Rama, VP and CTO/CIO of IHM Hotels, said, “The biggest impact arising from technology advancement that we have had to deal with can be attributed to the rise of millennials, centennials and the proliferation of digital technologies and channels. Given their deep adoption of mobile and digital technologies, millennials expect that we will interact with them in a manner of their choosing, via necessarily user-friendly applications.”
We live in an amazing world. Information is coming at us from many directions. The gives, gets and handoffs across the multiple channels are truly offering new opportunities to transform how we live and conduct business. We have an explosion of information available to us, and just need to figure out what to do with it and who needs it and when, in order to do something remarkable. Translated into hospitality speak, how do we deliver nuggets of information about guests to employees so they can continue to delight them as the guests go about their journeys? These positive interactions help increase “stickiness” and enhance brand affinity.
Technology transformation has permeated many aspects of our personal and professional lives, and has changed how we interact with one another and run our businesses. Think about it – in the last several decades we have been through several fundamental shifts in technology starting with mainframes, distributed computing and punch cards in the ‘70s, which gave way to minis, spreadsheets, word processors and floppies in the ‘80s. I still have a luggable that boots via diskettes – swap one to launch another program. Advances in computing as well as networking, and the growing popularity of the Internet and browsers made the ‘90s about collaboration and exploring connectivity opportunities – and email. The first decade of the 21st century was about online presence and engagement; as technologies became more sophisticated, websites evolved from static “here’s who we are” pages to more dynamic sales and engagement channels. This decade is about the exponential growth in digital, mobile, social, the explosion of data, and the harnessing of it via analytics. Multiple stakeholder groups within a hospitality company (e.g., IT, business, human capital and other stakeholders) can use cloud-based analytics engines to more effectively attract, acquire, engage and serve guests in a personal manner. Wearables and the Internet of Things (IoT) can help to further transform our digital engagement opportunities. Fascinating times.
Digital is Woven into Everyday Life
Technology has become an enabler for this digital era. Digital adoption is becoming widespread due to the explosion of connectivity, proliferation of data, ease of use, growth in computing power, and availability of distributed computing platforms for specific applications, as well as increased accessibility. As a result, digital is becoming ubiquitous. In so many instances, our personal lives are held together via a digital lifeline that connects our mobile phones, social interactions, banking, shopping, travel research and buying, and so much more.
In the business world, digital is causing disruption. In fact, many businesses are truly becoming transformed as they harness new capabilities and evolve and adapt to ever-changing business and operating models.
Trends and Disruptors
Digital is transforming multiple aspects of hospitality operations. It is impacting the delivery of guest experiences, transforming employee engagement and efficiency, influencing online presence in social channels, as well as influencing how guest data and Big Data are processed and applied at appropriate interaction touch points to support service delivery. The growth in mobile devices has also influenced what guests do with their phones as well as what value-added services hotel companies can provide to their guests.
In addition, disruptive innovations such as social channels are often forcing a re-think of customer engagement strategies. Companies should continually seek one-on-one interaction with their guests, as well as look for opportunities to monetize interactions and drive additional revenue growth. Businesses that learn to integrate and leverage social capabilities are typically able to better plan their sales pipeline and provide more authentic customer support. They will likely also be able to respond promptly to any spikes in conversation that focus on competitors or the industry in general.
IoT is also offering the opportunity to help track and deliver tailored experiences to guests by harnessing what is known and how one-size-fits-all experiences can be tailored for individuals. IoT is a good example of the intersection of technology and strategy. By embedding sensors and connectivity throughout our physical space, the IoT can create an opportunity to transform inanimate objects into a connected Web of ambient computing power – seeing, understanding and reacting to the world. It rewrites the traditional view of data collection and computing, and can give leaders an ability to deploy sensing capabilities and take actions based on real-time information that may come from well beyond their own walls.
Implications for the Hospitality Industry
Digital transformation is manifesting itself in multiple areas, but some of the important ones for hospitality include mobile, social, analytics and IoT.
Mobile: The growth of mobile is making new demands on hotel companies, especially in the case of their information technology assets. Deep adoption by millennials coupled with the growth of mobile usage in general increases the expectation that hotels will engage with their guests via this channel. Most guests also want applications that are engaging, intuitive and designed to take advantage of new mobile platform capabilities. Given the frequent updates and introduction of new mobile technologies and capabilities, hospitality companies should keep their mobile apps refreshed and continually enhanced. In terms of opportunities to leverage mobile, there are apps that offer mobile bookings, room service ordering and the fulfillment of guest requests. In the future, we are likely to see enhancements that take advantage of guest data and geolocation capabilities to help deliver targeted marketing and offers aimed at adding more revenue to the bottom line. However, this should not be an one-size-fits-all approach. Rather, the offers should be tailored, relevant and take the theoretical net worth of the guest into account prior to delivery.
Social: The growth of social media channels that are assisting the proliferation of user-generated content is pushing many hotel companies to rethink how to engage with their customers, many of whom use social media as a preferred medium to engage with customer service. Looking across multiple industries, not only those in travel, a 2013 study conducted by the MIT Sloan Management Review and Deloitte Consulting LLP found that 58 percent of companies surveyed have appointed an individual to oversee their organizations’ social business initiatives. Customer service is a given, and hotel companies typically need strategies for dealing with their guests who choose to interact via social media. Companies may have an opportunity to truly use social media to drive business. Social media typically falls within the realm of a marketing lead – and can be used for PR – but, it can span so much more and digital tools can drive branding, e-commerce, CRM, media and public relations.
Analytics: The hospitality industry is blessed in that it has access to a large amount of guest data. Many hotels know about their guests even before they have arrived on property. It is important to be able to take these insights and convert them into meaningful results. Analytics can be used to harness the awareness of customers. The application of Big Data helps hotels to create precisely targeted marketing campaigns, deliver them, measure success and learn from the outcomes. Next-best-course-of-action engines can analyze guests’ clickstream, location, social interaction platform, customer profile, transactions and voice-of-the-customer data to enhance and optimize their journeys and interactions at various touch points. “Where was I” reporting is often giving way to forward-looking, predictive “Where will I be” analytics and scenario-driven what-if analyses. These collectively enable hospitality companies to empower employees with insights they can use to deliver compelling experiences across touch points using customer profiles and preferences, social listening, location and contextual awareness and predictive analytics. Further, interactions across digital channels are able to be transformed as a result of these insights.
IoT: IoT is becoming a reality with the advent of connected devices, embedded intelligence and the ability to help deliver meaningful information to the embedded sensors that can be used to transform interactions. As hospitality companies consider how to employ IoT, it may behoove them to consider that the most compelling use cases will very likely require cross-organizational collaboration. Also, the desire to play with the next shiny object will likely be strong – therefore it is important to avoid distractions from exciting new technologies by starting with concrete business outcomes in mind. Usability is another important consideration, even if the solution is automated. Given the need to connect sensors, it is important to bear the bandwidth demands in mind. Lastly, standards for IoT will continue to evolve, but it is important to not wait – rather, hospitality companies should help shape standards.
What Does this Mean for the Hospitality Industry?
Digital capabilities are giving many hospitality companies the abilities to transform their business models, guest engagement and employee enablement and create opportunities to deliver rich and compelling experiences. Taking advantage of these typically requires investments not only in security and privacy to help maintain sanctity of sensitive personal information and personally identifiable information, but also to factor in the additional bandwidth needs. A judicious weighing of potential business benefits against investment requirements should occur prior to taking advantage of capabilities.
Amitava “Chats” Chatterjee is a director with Deloitte Digital, Deloitte Consulting LLP, based in McLean, Virginia.This article contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. As used in this article, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/ for more information View the original article on Hospitality Upgrade here.
]]>Kristian Park, partner and leader of the Contract Risk and Compliance practice of Deloitte LLP in the United Kingdom, discusses the escalation in third-party risk and the ways organizations should be mitigating it — but often aren’t
Q: Why is third-party risk escalating?
A: A few factors are in play. First, volume. During the recession, we saw many organizations push more of their business out to third parties in an effort to reduce internal costs across the extended enterprise. Higher volume, of course, can mean higher risk. Second: scrutiny. Regulators have become more focused on how companies are managing outsourcing and third-party risk in general, and the fines for violations have reached hundreds of millions of dollars. With those fines has come a third escalating factor: reputational impact. When millions of consumers are personally affected by a third-party system failure or security breach, or when a well-known company is heavily fined or repeatedly called out with regulatory MRAs (matters requiring attention), the reputation of the involved organizations can suffer. The free-flowing nature of information also plays a role here: decades ago, a disruption in a local country would likely have stayed local; today it can quickly become a global issue. As a result of the escalating risk — and the escalating fallout when risk becomes reality — boards are paying more attention and asking more questions. The fact that in most cases, even in leading global organizations, it’s rare for someone in the organization to have an overarching view of who the company is doing business with or the risks these third parties impose on the business is a tremendous concern. Today, like never before, boards are considering thirdparty risk a top strategic risk. However, that hasn’t yet translated into clear accountability for third-party risk oversight, either from a single owner or a function. The Chief Procurement Officer has frequently been asked to lead this role, but that can lead to skewed emphasis on supply, rather than a broader enterprise-wide view considering alliance relationships, distribution partners, and the like.
The impact
Q: What’s been the traditional approach to managing third-party risk and where is there room for improvement?
A: Third-party risk has typically been addressed in a siloed fashion, with individuals in the organization looking at specific risks, usually within the supply chain. For example, in the banking sector, the focus might be on the IT department and the data protection issues and risks of sharing data with third parties. In the consumer products sector, the focus might be on risks to product quality and safety, with an eye to both protecting end users and safeguarding the company’s reputation. While organizations have been right to be proactive in managing risks to certain functions or aspects of the business, many haven’t pulled back from this narrow view to examine the broader business exposure — the holistic view that’s essential to understanding overall risk exposure resulting from third parties and managing it enterprise-wide. It’s interesting to see how different levels of management within the organization have differing perspectives. For example, Chief Procurement Officers will often tell me third-party risk is being managed and is under control. Managers below them will likely say they’re not 100% sure, but they know that certain risk areas are covered. Leaders above, such as others in the C-suite and the board, are usually much less optimistic and perceive third-party risk as a serious problem that’s not being properly addressed.
The strategy
Q: What are leading companies doing to manage third-party risk?
A: Many companies are on a journey, and while some are further down the path toward robust third-party risk management, there are many that have not yet arrived. The first step is often the biggest stumbling block — getting visibility into who the company is doing business with. Once companies have some visibility, they start to think about how to manage the risk associated with these third parties they’ve identified, concentrating their efforts on those that pose the highest risk. It’s more of a proportional response rather than a holistic one. A thorough approach typically includes a framework and defined process for assessing third-party risk, such as a questionnaire that goes out to third parties and a means to score potential risks based on their responses. There would be strong governance in place to define next steps once a risk is identified, including guidance not only for remediating it but also deciding if it should be accepted and how to properly manage it if it is. There would be clear ownership of third-party risk, and people in the organization with a risk management background. We see organizations who have taken many of these steps, but what typically holds them back from fully implementing them enterprise-wide are technology limitations. As a result, we see even very large global companies trying to manage this with spreadsheets. It’s not that the technology solutions don’t exist; it’s the effort and cost required to deploy them that’s holding many companies back.
]]>Where do you see the opportunities for growth in your sector?
US THL companies performed very well in 2014 and they are expecting continued robust growth in 2015. US visitor exports—the measure of money spent by international tourists—are expected to increase four percent to $200 billion in 2015, thanks to improvement in the global economic environment and increasing income levels in emerging markets.¹
A part of what Millennials want is a customized experience. The hotels that are best able to provide a customized, differentiated experience to customers will be winners in 2015 and beyond. Hotels have to find the right combination of personalization, design, ambience and technology to build lasting loyalty with the Millennial customer. Where Millennials are concerned, consumer engagement is not something that begins at the hotel’s front door; it begins with online search and must be ongoing and evolving.
Millennials also want transparency and the sense that they are receiving “value for money”. Generally speaking, fast casual restaurants get this and offer what most effectively cater to younger diners—fresh and locally sourced fare and tech-friendly, communal settings with the meal prepared in a way that the customer can literally see. This is what Millennials seek and they are willing to pay more for a meal at a fast causal restaurant precisely because they sense that they are receiving incremental value.
Millennials also have a robust appetite for innovative technology. For them, free Wi-Fi in a hotel or restaurant is ”table-stakes” and no longer a novelty. They are always testing the technology readiness of THL players and seeking out new digital payment platforms. Additionally, Millennials have used technology to shape a “shared” economy, an emerging trend that will continue to loom large within the THL space in the years ahead. This trend is finding expression in such platforms as AirBnB and Uber. AirBnB, for example, is more than a cost-saving social media rental site–it has become a gateway to thousands of personalized, one-of-a-kind lodging experiences in destinations around the world.
Emerging platforms such as AirBnB and Uber are gradually becoming mainstream and challenging established players. In the race of traditional vs. alternative, the winners will be those who can create value for customers that they can experience and measure. Time will tell how this battle unfolds. In response to AirBnB, for example, we may see the emergence of a residential boutique segment that truly reflects the trappings of home (beyond a kitchen), as well as new sub-brands that emphasize a more personalized stay experience with greater proprietor and concierge involvement that appeal to Millennials especially.
These disruptive and new technologies in THL present a key question for existing and long-standing market participants – compete, lobby to regulate/shut down or collaborate? How these challenges and new entrants are handled will ultimately shape who will be the key “next generation’ market leaders.
With the confluence of global expansion, emerging and disruptive technologies, and a rapidly expanding Millennial population, it is clear that the next five years will be very different from the past five years and new “winners” and market leaders will emerge.
As important as growth is across the THL spectrum, it should not be pursued blindly. Yes, everyone must get the table stake attributes right—comfort, price, food taste, loyalty programs, among many other things. Yet, players across the THL spectrum must grow smartly, and not try to be all things to all people. In this regard, two key questions come to the forefront: What kind of brand engagement are they seeking—and with whom are they seeking it? Each consumer cohort is characterized by a unique set of preferences, even if they all want the basics.
But smart growth also means the highest standards of data privacy. Customers have different appetites in sharing personal information with companies; however, each customer wants to ensure that personal data find safe custody. The risk of cybersecurity breaches looms increasingly large, especially in consumer sensitive sectors. Whether THL companies’ legacy systems are good enough to catch up with innovative breaches is a question that needs deliberation.
Smart growth also demands a thorough and current understanding of the regulatory framework of each domestic and foreign market that a company serves. In the US alone, THL players must navigate an ever-changing labyrinth of federal and state regulations covering everything from food safety to pollution controls. As THL players expand globally and fall under the jurisdictions of foreign markets, that burden multiplies many fold. Global expansion also implicates additional US federal laws such as the Foreign Corrupt Practices Act, which governs relations between US companies and local government officials in foreign markets.
For its part, the gaming industry often experiences headwinds with the introduction of new regulations or changes to existing ones related to market entry. Macau, for instance, hosts the world’s largest gaming market with a notable presence of US gaming players. However, recent changes to Macau’s transit visa rules–accompanied by more stringent enforcements—are restricting visitors’ ability to visit as often and for as long as they like. Perhaps unsurprisingly, Macau’s gaming revenue was down 23 percent year-over-year in October, which is the fifth consecutive monthly decline.²
Finally, smart growth means situational awareness. Today’s geopolitical situation appears more fragile than ever before. From the civil unrest in Thailand and Hong Kong to the political disturbances in Ukraine and Egypt to the economic sanctions in Russia, geopolitical factors are likely to impact growth of THL companies in 2015. While looking for international growth avenues, especially in politically sensitive regions, THL players need to make sure that their risk management strategies are appropriate.
Any discussion of the next big thing must start with the generational shift that will drive all other emerging trends in the THL space. Millennials—those between 21 and 35—are now beginning to enter their prime earning years. The Millennial cohort will represent up to three quarters of the global workforce within ten years.³ To “win the Millennial”, any consumer-facing business must understand the needs and desires of this critical consumer demographic. The good news for THL industry participants is that Millennials love to travel, even more so than previous generations.
A part of what Millennials want is a customized experience. The hotels that are best able to provide a customized, differentiated experience to customers will be winners in 2015 and beyond. Hotels have to find the right combination of personalization, design, ambience and technology to build lasting loyalty with the Millennial customer. Where Millennials are concerned, consumer engagement is not something that begins at the hotel’s front door; it begins with online search and must be ongoing and evolving.Millennials also want transparency and the sense that they are receiving “value for money”. Generally speaking, fast casual restaurants get this and offer what most effectively cater to younger diners—fresh and locally sourced fare and tech-friendly, communal settings with the meal prepared in a way that the customer can literally see. This is what Millennials seek and they are willing to pay more for a meal at a fast causal restaurant precisely because they sense that they are receiving incremental value.Millennials also have a robust appetite for innovative technology. For them, free Wi-Fi in a hotel or restaurant is ”table-stakes” and no longer a novelty. They are always testing the technology readiness of THL players and seeking out new digital payment platforms. Additionally, Millennials have used technology to shape a “shared” economy, an emerging trend that will continue to loom large within the THL space in the years ahead. This trend is finding expression in such platforms as AirBnB and Uber. AirBnB, for example, is more than a cost-saving social media rental site–it has become a gateway to thousands of personalized, one-of-a-kind lodging experiences in destinations around the world. Emerging platforms such as AirBnB and Uber are gradually becoming mainstream and challenging established players. In the race of traditional vs. alternative, the winners will be those who can create value for customers that they can experience and measure. Time will tell how this battle unfolds. In response to AirBnB, for example, we may see the emergence of a residential boutique segment that truly reflects the trappings of home (beyond a kitchen), as well as new sub-brands that emphasize a more personalized stay experience with greater proprietor and concierge involvement that appeal to Millennials especially.These disruptive and new technologies in THL present a key question for existing and long-standing market participants – compete, lobby to regulate/shut down or collaborate? How these challenges and new entrants are handled will ultimately shape who will be the key “next generation’ market leaders.
With the confluence of global expansion, emerging and disruptive technologies, and a rapidly expanding Millennial population, it is clear that the next five years will be very different from the past five years and new “winners” and market leaders will emerge.
____________________________________________________________
1 Travel & Tourism Economic Impact 2014, United States, World Travel & Tourism Council, accessed November 11, 2014.
2 Monthly Gross Revenue from Games of Fortune, Macau Gaming Inspection and Co-ordination Bureau, accessed November 11, 2014.
3 Big demands and high expectations: The Deloitte Millennial Survey Executive Summary, Deloitte accessed December 14, 2014.
]]>As enterprises and government agencies increasingly adopt cloud, mobile, and social computing, information technology (IT) environments are becoming more difficult to defend. Increasingly, organizations need to accept that security breaches are inevitable. Security strategies need to go beyond defense to include detection, response, and recovery. All this gives rise to a need for new skills and approaches and specialized tools and services, including continuous monitoring and threat forensics powered by analytics.
Cyber security is increasingly becoming a concern among corporate leadership, including boards of directors. A biennial study of enterprise security governance practices by the Carnegie Mellon University CyLab found a sharp rise in board-level attention to the topic. Among companies surveyed in 2012, 48 percent have a board-level risk committee responsible for privacy and security, up from just 8 percent in 2008.3
]]>More than a century later, companies continue to face scrutiny of their supply chain practices, including workers’ rights, product safety and integrity, and environmental responsibility. Evidence of this scrutiny in recent years is visible through a number of high-profile global events. Brands have been exposed. Coalitions have formed. And more stringent laws have been passed.3
Yet many companies struggle to achieve supply chain transparency. A recent study conducted at Stanford’s Graduate School of Business revealed that while most respondent companies have social and environmental systems in place for internal operations, less than a third have similar structures to monitor the practices of their immediate and extended supplier network.4
The dispersed nature of today’s supply chains creates increasing levels of risk for multinational businesses, making transparency both critical and complex. Without effective visibility into their supply chains, executives potentially have a significant blind spot in their enterprise risk management structure, from which substantial legal, financial, and reputational exposure could emerge.
Supply chain transparency isn’t easily achieved; it requires a solid foundation and continuous improvement over time. This article presents a practical four-step approach that companies can take to begin the process of building a transparent supply chain in the current global environment.
In the past, considerable physical and temporal distance separated a supply chain’s upstream activities from the manufacturer and its downstream stakeholders. Now, the proliferation of technology, especially mobile devices, and the pervasive use of social media have brought upstream risks much closer to the eyes, ears, and voices of downstream stakeholders, including consumers, business customers, news media, regulatory agencies, and nongovernmental organizations.
At the same time, supply chain risks grow significantly as supply chains span more legal jurisdictions, different types of business practices, and widely varying cultural norms. In this context, transparency becomes the vital process of managing risks by accessing, learning from, and acting on supply chain information. By itself, transparency is an increasingly important capability for companies. But as part of a company’s broader attempts to build supply chain resilience—the ability to recover from and reduce the impact of key risk events5—transparency’s role is pivotal.
Even supply chain executives who understand the importance of transparency may struggle to prioritize activities and build a transparency process. For companies with traditional or non-traditional supply chains (see sidebar, “Risk and transparency in a non-traditional supply chain”), creating a high-level road map may help. A company can begin by identifying, prioritizing, and visualizing potential supply chain risks; then, it can use “transparency levers” to bridge information gaps; finally, it can move on to managing the insights gained from the process and monitoring the supply chain for additional insights going forward.
]]>In 2013, Deloitte conducted further analysis of board level risk oversight disclosures in proxy statements issued by S&P 200 companies. Similar to our efforts in 2010 and 2011, our analysis of risk-related disclosures in proxy statements was to provide a glimpse into risk oversight and management practices — at least to the extent to which these practices are being disclosed. We also sought to provide insight on how such practices are changing over time.
Our 2013 analysis provides evidence of a steady upward trend in risk-related disclosures. For example, 91% of companies disclosed that the full board is responsible for risk. Furthermore, risk-related disclosures at the management level increased, with high percentages of companies disclosing the establishment of a management-level risk committee.
Organizations strive to achieve and maintain excellence in risk governance and fully tell the story, are taking steps to protect and enhance shareholder value.
Download the full report to learn more about the findings of the 2013 proxy disclosure analysis and to view trends in risk oversight-related disclosures.
]]>Deloitte’s Travel, Hospitality, and Leisure practice is pleased to announce our new report, Rising above the Clouds: Charting a course for renewed airline consumer loyalty. In this report, we explore the state of loyalty in the airline sector.
Our findings suggest that an undifferentiated one-size-fits-all approach to loyalty improvement will seldom be fully successful because no two travel cohorts—and no two individual travelers—are identical in what matters to them in the air travel experience, airline loyalty programs, and the manner in which they prefer to engage and be engaged. Yet, despite this outlook of concern—or perhaps because of it—airlines have a unique opportunity to distinguish their brands in an effort to build a truly loyal consumer base.
Charting a course for renewed airline consumer loyalty
Specifically our research uncovered a number of findings that should give airlines pause:
Airline loyalty programs fail to engage
Loyalty program members are far from loyal and airline loyalty programs fall short in achieving their objectives—particularly among high-margin business and high-frequency travelers.
Loyalty programs matter more to some travelers than to others
Overall respondents ranked loyalty programs as only the 19th most important airline experience attribute (out of 26 attributes). However, high frequency business travelers ranked loyalty programs second, even higher than safety.
Passengers plan and book in different ways
Our research reveals significant differences in travelers’ booking/planning behaviors and engagement preferences. These differences underscore the need for differentiated, targeted approaches to building loyalty and customer engagement.
Airlines need champions
Put simply, the flying passenger has the potential to serve as an airline’s most effective marketing tool. Yet, our research shows that only 38 percent of survey respondents responded positively when asked whether they would serve as a brand ambassador.
Download the report and survey charts from the top of this page to learn more.
About the research study
Our research is based on an overall survey of over 2,500 respondents who took at least one flight over a twelve month period and two focus groups with business and leisure travelers. This research has given us deep insights into air travelers’ behaviors, attitudes, and engagement preferences.
]]>The oil and gas industry ranked reputational risk as eleventh on its list of concerns in 2010. After the Macondo well blowout in the Gulf that same year, which resulted in approximately $40 billion in damages, fines, and court awards against BP, the industry now considers reputational risk over the environment to be its number one priority.
Any contracting or service firm working on a high profile project is under the microscope for safety and construction best practices. Before 1980, there were seven major accounting firms in the U.S. One of these firms was driven out of business due to bad publicity coupled with lawsuits. The firm could have survived the suits, but most of its major clients dropped the firm after the public relations debacle. The financial crisis of 2008 severely damaged the reputation of a major insurance company; two icons of the banking and financial services industry were forced to liquidate/merge. All were a result of bad financial press, which emphasized business mistakes.
The speed of social media in spreading both fact and rumor makes it that much tougher for companies to manage the public relations fallout of a catastrophic event. Also, negative comments are stored digitally and often publically, leading to prolonged public relations effects. While social media makes it easier for corporations to identify and reach potential clients, it also increases the likelihood that an employee’s gaff will cause a major headache for the company, which in some cases leads to lawsuits. Problems can occur when a senior executive posts something inappropriate on his/her Twitter or Facebook account, or even just sends a poorly-worded email. Finally, the inappropriate use of client data for prospecting potential clients could entail additional liability for the firm, always with the potential for reputational damage.
Speaking of data mining, cyber attacks and system-hacking seriously damage the trust factor of the company. From personal information (leading to identity theft and the resulting requirement to notify the affected parties as soon as possible) to business models that rely on internet-based systems to generate income, these electronic invasions can become instant public relations debacles.
How do you protect your firm’s reputation? Solid risk management procedures, a top-down culture of safety and integrity, consistent hiring practices, and risk management oversight are critical factors. Insurance is one solution to mitigating the fallout from a bad “situation,” but an ounce of prevention is worth a ton of cure in the information age. The primary driver of protection to a firm’s reputation lies with management, staff, and the IT department.
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