Last week Thomas Rudkin, Senior Associate at Farrer & Co., wrote that in the post-pandemic world private clients need to adopt a "proactive approach" to reputation; it is no longer sufficient to simply react, responding to risks, issues and challenges as they pass an individual's desk.
I agree wholeheartedly. But I go further today. I do not think it is enough to prepare. Families and individuals need to prepare for potential risks, of course — but they also need to know, preferably immediately, when those risks have come to pass. And too often that piece is missed.
How the pandemic may turn a whole generation against wealth
The coronavirus pandemic has brought the world and economy to its knees. Its impact certainly goes beyond the financial crisis of 2007-2008. Perhaps most devastating has been the painful loss of life in the UK and worldwide.
I have been thinking recently about the long-term impact this humanitarian disaster could have on public opinion, politics and legislation. One major trend that has characterised media coverage of the crisis over the last few months has been the perceived unfairness of the economic impact of the crisis: rightly or wrongly, many people feel that those at the bottom of society have lost their jobs at a time when they are most vulnerable — while business owners continue to flourish.
This narrative has been further inflamed by the perception that the Government has effectively bailed out wealthy business owners through the furlough scheme, tax holidays and the Covid Corporate Financing Facility (CCFF) for big businesses.
But I think this goes a lot deeper than short-term public anger. There is growing animosity and disgust towards wealth and business amongst millennials as a generation. I think this owes itself to the fact that millennials have now been hit by two economic crises at key points in their working life.
A millennial revolt?
The first meltdown, the financial crisis of 2007-2008, hit just as many millennials were entering the workplace. Having finished university, many saw large corporates close graduate schemes and slash wages at the same time as the Government was perceived to be bailing out the banks.
The second, the current coronavirus crisis, has hit just when many millennials are supposed to be reaching their peak earning potential. Again, many millennials now see entrepreneurs and wealthy business owners being bailed out by the Government.
It is not difficult to believe this has led to a radical and permanent shift in the attitudes of younger people, which may only reveal itself fully at the next election; we could see a 'millennial revolt' at the ballot box in 5 years, leading to a decade of anti-business, anti-enterprise and anti-wealth sentiment and policy.
...while the Internet increases risks
This is taking place at the same time as the Internet — and especially social media — has empowered people to air their opinions worldwide from their computers, tablets or phones. This trend has been widely analysed, but perhaps less attention has been devoted to the impact this has had on the news cycle.
In the past, ten people — in dislocated places across the country — airing their views about a business or individual would have little chance of raising to the level of national news. Now is it completely possible that a single tweet, Facebook update, or LinkedIn post can become a story in the trade, local or national media.
Twitter has enabled journalists to quickly and easily source stories from the public — and give voice to their opinions.
We are, therefore, in a position where we have the confluence of two trends that expose successful families to more risk than ever before: on one hand, a potentially generational change in perceptions of wealth; on the other, a media cycle which is able to give voice to those public perceptions more easily and quickly than ever before.
Reputation risk monitoring in this environment is key
These two trends underline the increasingly critical importance of families knowing what is being said about them around-the-clock on the Internet, whether that is on news websites, blogs or social media.
I'm saying that many families now, in many ways, need to go beyond taking a preparative approach to their reputation. When reputation is discussed, many families dismiss the idea of a proactive approach in favour of a reactive approach: "we will deal with a problem when it comes along". That is clearly dangerous because too often 'when the problem comes along' is already too late; at that stage, it is crisis management. And it usually gets very messy.
But even more dangerous, perhaps, are those individuals and families who think taking a proactive approach is the same as merely preparing in advance: they might prepare a statement, factsheet, or plan of action in case of when a crisis hits. This means the family feels more comfortable, prepared, and will usually handle the crisis with more clarity and emotional stability.
But, in many ways, they are not much better off than the other family: they still only react to the crisis when they are approached — it is at that point that they share their statement and start responding. Again, the horse has already bolted.
The best approach is to witness the crisis emerging before it has reached the point when it requires a response and, at that point, take steps to close down the risk or mitigate the issue before it becomes a full-blown crisis; see the undercurrents of the crisis starting to pull at the family, and take preventative action then.
Of course, this is rather difficult in a world where so much content is being generated on a daily, hourly and minute-by-minute basis. According to Twitter, more than 350 million tweets are posted every minute. There are 78 million new posts on Wordpress blogs per minute. And 294 billion emails sent every minute.
Nonetheless, it is critical: families need to find solutions to stay on top of this content. That is what true proactivity looks like.
Transmission Private recently launched its dedicated Reputation Risk Monitoring service. With unrivalled depth and reach, we watch print media, social media, blogs, public records, leaks, and everywhere else, both offline and online, for references and changes that could pose a risk — or opportunity — to our clients and their reputations.