Interview: reputation risks can be measured

By: KK / 01.02.10

Dr. Frank Herkenhoff

Another contribution to the subject of reputation: communicationcontrolling.com talked to another expert for reputation management. Dr. Frank Herkenhoff has engaged intensively with the subject of "risk management for public relations". The head of media relations at Deutsche Boerse AG developed a specific approach to measure corporate reputation risks caused by the mass media which shows that reputation risk scoring can be measured in the same way as established corporate risk management. The interview is available here.

communicationcontrolling.com: Dr. Herkenhoff, why is it so important for a company to measure its reputational risks?

Frank Herkenhoff: Because it allows companies to meet the "holistic risk management" approach and understand that the media system is a source of risk for businesses in modern societies. Since risk management involves processing and condensing a lot of information, measurement is coming to replace purely verbal paraphrasing. In addition, there are now a number of regulatory requirements which suggest it makes sense to add reputation to the list of business risks.

communicationcontrolling.com: Could you briefly present your specific approach to reputation risk measurement and management in this connection?

Frank Herkenhoff: When you talk about risks, you're basically talking about probabilities. Hence, on the basis of news factor research and framing theory, the method identifies the degree of probability of – neutrally speaking – corporate circumstances (e.g. sale strategies in Eastern Europe, human relations policy in call centers) becoming issues on the agenda of the media. The method does two things: gives specific pointers on how to reduce the probability, and says what you should do to engender a targeted media response. Not in theory or in an abstract way, mind you, but in the specific case.

communicationcontrolling.com: What do you see as being the reasons why a lot of companies – including big players – haven't yet extended their risk management to embrace corporate communications in general and reputation risks in particular?

Frank Herkenhoff: There are two main reasons: firstly, it has to do with the views and expectations of top management in terms of "communications" departments. Most of the people in management positions today did not have lectures or seminars on media management etc. as part of their training. In a best-case scenario, communications was viewed and taught as a sales-supporting "announcement function". The social function of media with all their secondary effects (e.g. construction of reality) wasn't taught. So what can you possibly expect from a communications department in terms of strategic corporate decision-making? Another reason has to do with the qualifications of most of the people working in corporate communications departments. A lot of the time, you still have the ex-journalist who keeps everyday business ticking over with his craft and doesn't think beyond tomorrow's headline. Who works on a purely tactical basis. And how can a journalist be expected to have management skills and methods, anyway? They weren't part of his training.

communicationcontrolling.com: What will the trend be in the future? Does your scoring method which you developed during your dissertation on "Risk Management for Public Relations" stand a chance of becoming established in corporate practice?

Frank Herkenhoff: Planning and strategic aspects will come more and more to the fore as the conditions and settings I've just described become less common, for example as a result of systematic training/education in communication management - and dedicated methodology expertise developed by communications and media research scientists will advance commensurately.

communicationcontrolling.com: In the current period of economic crisis and fears of recession, are you seeing an increasing demand on the part of other corporate departments – executive boards too, of course – for controlling activities that embrace communications? Do you have to do more to "justify" your work?

Frank Herkenhoff: It varies a lot from organization to organization. But controlling activities should always be in tandem with all communications work, i.e. integrated, and should not be dependent on the current economic situation.

communicationcontrolling.com: Many thanks for the interview.

About Dr. Frank Herkenhoff

Dr. Frank Herkenhoff heads the Media Relations department at Deutsche Boerse AG in Frankfurt/Main. Prior to that, he mainly worked as a consultant to the finance industry for a European communications consulting organization. Herkenhoff studied communications, psychology and business at the University of Leipzig. Dr. Frank Herkenhoff received the Young Talent Award of the German Media Relations Association (BdP) for his dissertation on "Risk Management for Public Relations" in 2007.

In an article some weeks ago, communicationcontrolling.com talked to Prof. Dr. Manfred Schwaiger, LMU and presented his approach to reputation management. The interview is available here.

Both Prof. Manfred Schwaiger and Dr. Frank Herkenhoff were speakers at the recent Munich symposium of the European Centre for Reputation Studies (ECRS) "Reputation Capital – Building and Maintaining Trust in the 21st Century". communicationcontrolling.com was present at the event. Our author Kristin Köhler's extensive report is available here.