Tuesday, September 25, 2007

What Risk Zone does your brand occupy?

Bulky Package

In our daily lives we encounter risk in many forms. These risks involve crossing against a light, driving to the grocery store or mowing the lawn.

Much of it is minor stuff compared to risks we encounter in the course of running a business. How we face that risk has an impact on our brands. The business climate is a lot more complicated than it was even 10 years ago. A simple example is letterhead - where is it held, who controls it, how is it used?  If I can steal it, I can be a company without their knowledge.  It is much farther reaching then that!  What if I stole shipping documents with the brand on it?  I can then pretend to be part of the company and operate with minimal intervention both internally and externally (Customs or Police).  This is no different then stolen identity at a personal level.

Brand Risk Assessments takes into account all environments you do business in, production standards and all elements that could potentially expose your brand to risk. In a world tarnished by threats of terrorism, any risk exposure would harm your brand from the observing marketplace. Take for instance CTPAT, (Customs Trade Partnership Against Terrorism) - a U.S. / Canadian government business initiative to build cooperative relationships that strengthen overall supply chain and border security. When a company is CTPAT Certified they lessen the chance of their brand being compromised by parties who would do them harm. CTPAT is an exporter iinitiative that speeds up border crossings and further ensures increased security for each country. If a company is exposed due to a breach in security they stand to risk a great deal with regards to shipping to the U.S. or Canada and this reflects negatively on their corporate brand. If for instance a company who manufactures auto parts were to have a dirty bomb or any illegal cargo hidden among their shipment (even unknown to them) and their shipment is seized at the border, the ensuing media attention can unjustly harm their brand. CTPAT puts in place increased security at every touch point in the shipping process with the goal to easing risk for all parties involved. This is increased protection for your brand.

Peter Berry, OB1 Consulting - a risk assessment and CTPAT specialist lists additional benefits of CTPAT as:

• Reduces border inspections.
• Minimizes border clearance times allowing for predictable transit times 
 and transportation costs.
• Allows for movement across the border even during a red alert.
• Reduces compliance costs with customs requirements.
• Allows companies to compete for opportunities that require a security clearance.
• Provides access to the FAST lanes at the Canadian/US border.
• Allows for improved security in your work place.
• Allows for reductions in cargo theft.

The Oklahoma City bombing thrust the Ryder Trucks Brand Risk into the Hot Zone. Today you can be sure, more precautions are in place to lessen that risk. Naturally it is pretty much impossible to cover every possible scenario, but a Brand Risk Assessment does a good job due to the fact that its facilitators typically are experienced people from within the security industry. They look out for situations way off a layman's radar. Take for instance the case of a well known coffee manufacturer who had their brand packaging copied and used on packages containing cocaine. The manufacturer was tipped off to the scam when a long shoreman was injured off-loading goods when a 50lb. box of cocaine hit him in the head, sending him to emergency. He ended up on compensation due to the severe nature of the injury.  It was investigated and suspected that the load was supposed to be intercepted by a long shoreman and had nothing to do with the coffee company. They had no idea that drugs were in the load. It was supposed to be taken out by longshore or the driver. News of the incident set off alarms that something was amiss - law enforcement was dispatched immediately and the shipment seized. An investigation resulted which proved the brand was not involved but it does cause business disruption, a great deal of anxiety within the workers and costs due to law enforcement interaction to normal processes and the employees involved. Not a comfortable feeling when the federal government investigates your company for drug or weapons smuggling. What tipped them off? Their coffee isn't shipped in boxes. They are shipped in bags. The street value was approx. $700K CDN.  A lot of money to entice a bad guy and hardly worth the value hit to the brand had it been public that coffee company brand had been used to smuggle. It would have sent the brand into the Hot Zone.

Every day, your brand's risk potential relies on the integrity of your company's security practices. When it comes to your Brand Risk Assessment, you want your brand to reside in the Cool Zone. If it goes up to Warm or Hot - watch out, you're inviting disaster to dinner. And your brand is the main course!

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