The Witches of Adams Hall

Summary

The collision between the Witches and the Followers deeply felt emotions and passions created a perfect storm that inflicted mortal damage to Om-Orange’s reputation. After all, the simplest definition of a brand is the emotional connection a customer feels to the company. Some of the other key points that were raised in this scenario include:

1. Speed Kills: Social networks, mobile access and other modern forms of communication have created the ability for information to be distributed almost instantaneously to just about everyone. The time it took the e-mail dialogues on TRUTH to be known around the globe and do substantial reputational damage was about a week.

2. Hackers Pose Multiple Threats: Cyber risks are primarily thought of as related to the destruction of corporate networks, theft of customer data or corporate espionage. But given how much of modern business is now digitally documented, the damage inflicted on a company through a hack-attack is limited only by the assailants motives and imagination. The Witches were successful not only in accessing the emails but also in creating a way to make them easy to read and share.

3. Reputational Risks Can Be Fatal: Even if it doesn’t destroy a company, damage can be done extremely quickly and have significant negative impact on a company’s sales or stock price. Case in point – Netflix, where an unpopular business decision caused a digital uproar that translated into a full retreat and punished stock price. The stronger the emotional connection a brand generates, the more successful the brand is; but the more susceptible the company becomes to brand damage. The degree of hypocrisy evidenced in Danny Merchant’s dialogues with his risk manager was fatal because of the extreme connection the Followers felt to Om-Orange.

4. Assume Nothing Is Secret: Is it really possible to create a secure communications environment? Even the U.S. government’s most secret cables and communications have been leaked. Having policies that govern your company’s complete set of communication channels should be as important a priority as any other type of corporate security. Email was a poor communication choice given the nature of the discussions between Danny Merchant and John Robinson.

5.Strong Brands are the Best Defense: As noted in point No. 1, even aggressive crisis management approaches may not be effective due to the short amount of time available to communicate a rebuttal. A strong brand often times can be leveraged to deflect moderate criticism by buying a company time to address issues and concerns. The disclosure that Apple was tracking mobile users didn’t last longer than a few days, in part due to the trust customers have for the Apple brand.

6. Procurement – The Next Frontier: It’s not just reputational risk that lies in wait for companies that don’t understand the makeup of their supply chains. In the case of Om-Orange, the company’s Southeast Asian manufacturing facilities created a reputational problem. But they just as easily could present a supply-chain problem. Insurance carriers are losing patience with company’s that haven’t fully vetted their supply chains.

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