Posts Tagged ‘Issue management’

The importance of assessing corporate risks before the crisis

posted by Peter Roberts

Home economics has undoubtedly taken on a new meaning in recent years with the launch of a legion of online ventures that are making money from what I’ll grandly label people’s ‘residential asset base’ – basically, rooms, driveways, garages, gardens – you name it.

Airbnb is such a site – it’s a private room rental service, which has, over the past week, generated a fair amount of coverage for the wrong reason. Last month, a blogger detailed the damage to her home, including holes through walls and burnt possessions, after she rented out her property via Airbnb. You can read more here. The site has since announced a $50,000 guarantee to its hosts for theft and vandalism.

What I find of interest from a crisis management perspective is the CEO’s admission that they got it so wrong. “We felt paralysed, and over the last four weeks, we have really screwed things up” said Brian Chesky. The corporate candour is laudable, but effective preparedness plans would have prevented  the reputational fallout.  “We weren’t prepared for the crisis and we dropped the ball. Now we’re dealing with the consequences” added Chesky.

Discerning businesses will regularly gauge the risks they face from both an internal and external perspective and draw up appropriate contingency plans. Airbnb has, rightly, now introduced a more robust customer relations service, including a dedicated hotline. Airbnb’s creditable admission should, I hope, serve as a wakeup call to those other organisations who have yet to grasp the significance of a full and frequent assessment of their  business.