Social Media Risk | The Risk Institute

Conversation surrounding governance and culture recently took center stage at The Ohio State University Fisher College of Business, as The Risk Institute explored the impacts of the two key aspects of business at its Annual Conference. The two-day conference brought together Risk Institute members, business leaders, experts and faculty thought leaders from Fisher for an in-depth examination of the risk management and strategic implications of governance and culture.

Phil Renaud and Jeni Britton Bauer of Jeni’s Splendid Ice Creams discuss maintaining culture through crisis.

Considering the various sides of governance and culture is critical to understanding how to leverage risk management to create value for an organization. The conference featured four keynote speakers, Gordon Bethune, former CEO of Continental Airlines; Cameron Mitchell, founder and CEO of Cameron Mitchell Restaurants; Randall Kroszner, former Governor of the Federal Reserve System; and David Gebler, author of best-selling book The 3 Power Values.

Bethune opened the conference and focused on his experience turning around Continental Airlines over a decade, which is detailed in his book, From Worst to First. He emphasized the importance of building accountability between employees and the organization saying, “What gets measured and rewarded, gets done.”

Mitchell is a self-described serial entrepreneur who understands that taking risks is necessary to be successful in business saying, “I may shoot myself in the foot and walk with a limp, but I’ll never shoot myself in the head and make a fatal mistake.”

Academic Director Isil Erel speaking at Annual Conference 2016.

During his time with the Federal Reserve System and as a professor of economics at the University of Chicago, Kroszner never imagined he would be helping guide America’s economy through the worst financial crisis since the Great Depression. He discussed the potential ramifications of the Fed keeping interests rates at historic lows since 2008 saying, “When your short-run policy becomes a long-run policy, you will always run into unintended consequences.”

Named one of America’s top Thought Leaders in Trustworthy Business Behavior, Gebler is an innovator of new approaches that integrate culture, ethics, values and performance. His talk detailed how to know if your organization’s culture is a risk factor utilizing the three power values— integrity, transparency and commitment.

In addition to the keynotes, the third-annual conference brought together business leaders and experts for a series of RISKx presentations and panel discussions on women in risk, governance and culture related to business. The culture discussion explored employees’ attitudes toward risk, mergers and acquisitions, maintaining culture through crisis, and emerging risks in the energy industry.

The Risk Institute’s Executive Education Series will resume November 15 with a discussion on Political Risk.

By Professor Bernadette A. Minton, Academic Director, The Risk Institute
Arthur E. Shepard Endowed Professor in Insurance

During the last decade, the rise of social media, which accelerated with the introduction of smartphone technology, has provided unprecedented opportunities for organizations to build influence, their brand, and reputations. The organic nature of social media allows enterprises to reach millions of consumers and influencers in ways they never could before.

Yet, this opportunity does not come without risks.

During a recent Risk Institute Executive Education session on Social Media and Risk Management, Prof. Lanier Holt of The Ohio State University’s School of Communication stressed the effect of social media in today’s media climate is that “Perception IS the Realty.” Customers, bloggers and others can use social media to quickly turn on a firm/brand, leaving in shambles a distant memory of its once vibrant self.

Thus, it is not surprising that, in the same session, Bill Deakin, Executive Director, North American Consumer Products, EY, noted that recent surveys consistently report that executives view social media as one of the leading risks facing their organizations.

An organization’s brand is a collaborative effort of most, if not all, areas of the firm – from marketing and sales to finance and operations. As such, the benefits and risks of social media rarely impact just one area of an organization. So, as Deakin stressed, a social media strategy must be an organization-wide responsibility.

By integrating enterprise risk management strategies for understanding, evaluating and managing these risks, organizations can capitalize on the opportunities inherent in social media, which include:

empowering consumers to comment anywhere and anytime on an organization and what it is doing and companies to provide real-time feedback to customers letting them know they are being heard.
providing organizations a venue to tell stories in engaging ways to a wider audience, helping to build reputation, customer affinity and sales.
allowing companies to analyze in real-time online conversations to assess the effectiveness of the firm’s products or initiatives.
providing firms a way to provide the information in real time to manage risk by getting ahead of negative events, not allowing others to tell their stories for them.

The power of social media is something that was unimaginable even 10 years ago. But, today it can empower an entrepreneurial startup with the same brand-building abilities as the world’s largest and most well-established company. When approached with an enterprise risk management perspective, organizations can create value by balancing the power of social media engagement with its associated risks. To find out more about The Risk Institute’s perspective on enterprise risk management, visit fisher.osu.edu/risk.

To find out more about The Risk Institute’s Executive Education Risk Series, or to register for the upcoming session on Demand Uncertainty on April 30, 2015, visit our webpage.