Every company cares about its reputation. Even if it does not, it still has to maintain goodwill. A company with a bad reputation invites undue attention from the people, media, and regulators.
With unnecessary eyeballs come unnecessary obstructions. Regulators step in to make sure that the company is run properly. Share prices fall if there’s even a hint of a mishap in the company. The media starts putting the company on trial.
What happens when there is poor risk management and failure to react quickly to situations? The consequences aren’t just limited to the destruction caused by oversight; its effects spill over everywhere. Here are a few examples of the disastrous consequences when risk isn’t managed properly:
1. BP Deepwater Horizon oil spill
Ten years ago, an explosion aboard a BP-operated oil rig caused the spill of nearly 5 million barrels of oil in the Gulf of Mexico. The reason? Lack of proper risk management, shortcuts, failure to react to indicators, and insufficient training. Since the spill, BP has sold more than 75 billion dollars to cover regulatory fines, private claims, and legal bills. Not to mention the destruction of the environment in the Gulf of Mexico that will take a long time to heal.
2. Wells Fargo scandal
What happens when a company loses its reputation? Just ask Wells Fargo. It broke every rule in the book, searching for more revenue from fake customer accounts to unauthorized charges. It had to pay over $1 Billion in fine and billions more in private legal claims. The reputational damage permeated into other avenues leading to huge losses for the company.
3. Facebook data scandal
The last few overs have been rocky for Facebook. Ever since it emerged that it failed to protect the private data of millions of people in the Cambridge Analytical scandal, this led to regulators intricately scrutinizing Facebook resulting in the revelation that Cambridge Analytica meddled in the US elections by using the private data of Facebook users. Due to the loss of reputation, Facebook lost over $120 billion when its shares plunged.
But incidents that bring disrepute to the company can be managed. Pulse helps you substitute incident recovery with prevention because prevention is better than the cure. Here’s how Pulse helps you with prevention:
1. Preventing things before they happen
With Pulse, you can create checklists for your employees to ensure that they are following precautionary steps designed to prevent incidents. For example, before they enter the premises, an employee should fill a checklist that contains precautions for the coronavirus. The employee ticks the checklist just before entering the premises to ensure that he is wearing protective equipment and that he is not showing symptoms.
Information such as when the employees ticked the checklist, the picture that verifies that they took the step, how many employees filled our checklist, and how many didn’t be available to the necessary management person on their device.
2. Checklists for effective inspections
There are numerous health and safety inspections that are needed to be carried out in the company’s day-to-day working. You can create inspection checklists with Pulse. Then, designate the person, group, department, or any other variable to do the inspection. Add a deadline for the inspection. Ask for a picture or a video so that you have proof of the inspection. All the information related to the inspection will be available to the necessary managers. The report can be instantly shared with the right person allowing them to make things right in the failed areas.
3. Identify the weak spots and take steps to address them instantly.
With effective and seamless inspections, you can find the weak spots that have the potential to cause an accident and address them. After the inspection, the manager can start a task assigning the weak spots to the right person to be rectified quickly. With regular inspection and rectification, the chances of incidents happening decreases. Substitute incident recovery with incident prevention with Pulse.
A major incident can have disastrous consequences for the company. It is far more efficient and affordable for the company to work on preventing incidents rather than cleaning up afterward. A single incident can wipe out all the goodwill earned by the company during its lifetime. Sign up with Pulse to ensure that incidents that tarnish the reputation of the company don’t happen.
“Goodwill is the one and only asset that competition cannot undersell or destroy.” – Marshall Field