3/2 PR

The speaker discusses their aversion to an advertisement encountered multiple times.
Initial reaction is negative, but repeated exposure leads to curiosity and intent to search for information.
Key concept: Review Influence
- The speaker emphasizes the importance of consumer reviews in influencing buying decisions.
- Search engine query for "Pros Hair Care" reveals negative reviews.

Negative summaries indicate that the product is viewed similarly or worse than generic grocery store shampoo.
Consumers report adverse effects, such as hair loss, highlighting the importance of perception in risk assessment.

The customized hair care company's extensive investment in advertising and product development may not translate to consumer satisfaction.
Risks arise if products fail to meet consumer expectations, highlighting the importance of review standards

Crucial factors for effective crisis management include:
- Deep organizational understanding.
- Assessment of the company's reputation and communication frameworks.
- Enhanced quantitative skills for data comparison related to industry performance.
- Strong communication skills among team members, especially between PR groups and management.

Challenges in small businesses often stem from poor communication regarding risk assessments and crisis management plans.
Inadequate knowledge transfer to newly hired employees can exacerbate crises.

Risks can be viewed as either threats (negative) or opportunities (positive).
Example: Milk supply risks in a coffee shop are mitigated by having alternative options like almond or oat milk, highlighting how risk management can create business opportunities.
Businesses often react to crises with short-term solutions rather than establishing proactive risk management strategies.

Risk Tolerance: The maximum acceptable risk for an organization regarding specific tasks.
Risk Appetite: The level of risk an organization willingly accepts to achieve its goals.
Illustrative Case: Panera's “Charged Lemonade” incident showcases financial risk evaluation transitioned into health-related concerns.
- Financial benefits versus potential consumer danger are weighed.

Decision-making involves assessing potential gains against possible losses.
Companies often err towards profit maximization rather than consumer safety.
Example mentioned: BP's cost-saving approach following a significant incident exemplifying risk assessment prioritizing financial outcomes.

Strategic Risks: Disruptions that hinder business goals.
Financial Risks: Risks relating to revenue streams, including significant losses.
Operational Risks: Internal risks involving employees and operational practices.
Compliance Risks: Adherence to legal and regulatory frameworks.
Technological Risks: Ensuring adequate technological infrastructure to meet operational needs.
Reputational Risks: The potential damage to a business's public image stemming from internal or external actions.

The speaker shares a story about Authentique, a once-successful boutique that suffered reputational damage due to political stances, resulting in a business closure.

Risk aversion types:
- Take No Action: Organizations may choose not to act upon risk if costs of prevention appear higher than potential fallout.
- Take Action: Organizations may implement safety practices or improve training to mitigate risks.
The case of Jared from Subway illustrates guilt by association in celebrity endorsements, which can significantly affect a brand's reputation.

The OODA Loop framework is discussed for effective crisis management: Observing, Orienting, Deciding, and Acting.
Timeliness in communication is vital to maintain trust and manage public perception before a crisis escalates.

Organizations may need to adapt their operations based on risk assessments, decisions observed in McDonald's shift from Styrofoam to paper products emphasize quick responsiveness to customer feedback.

CSR is recognized both as an area of opportunity for engaging consumers and potential risk if not aligned with organizational practices.
Examples discussed include brands like Dawn's environmental campaigns and the potential backlash from misalignment of CSR with company practices, highlighting the importance of maintaining a trustworthy image.

Understanding risk assessment and management is crucial for strategic decision-making in organizations.
Assigned task involves risk assessment of a chosen organization, focusing on operational risks for comprehensive understanding.