Social Media Risk – A Taxing Case of Mistaken Identity

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Social Media Risk

 

Local business battles name confusion

SUMMARY:  Charlotte Blake’s small B&B Tax Service office is a lot less quiet than usual this time of year. On May 5, nine people were indicted in a fraud and identity theft case at a totally unrelated tax service across town — a business that had the same name as Blake’s office. Reports about the arrest led to a landslide of fear and misinformation from friends and customers that Blake said she’s still working to defuse.
 
Analysis by Firestorm Principal Guy Higgins

Charlotte Blake, who runs B&B Tax Service in Montgomery, Ala., with her husband, has been working to fix the fallout from a case of mistaken identity since several people were indicted for fraud at another business operating under the same name. To complicate the issue, a local TV station that reported on the story mistakenly filmed Blake’s business. Since the indictment, which occurred earlier this month, Blake said she’s had to have many conversations explaining that she wasn’t indicted.  Montgomery Advertiser (Ala.) 

The reported indictment of people working for B&B Tax Service created a very real problem for Ms. Blake and her husband – in fact, it created a problem that could have put her out of business.  This is not a rare occurrence.  Consider the recent media frenzy over Greg Smith’s op-ed piece in the New York Times in which he resigned from his position at Goldman-Sachs and accused the company of unethical business practices.

Ms. Blake had to spend time explaining to her clients that she was not indicted, and there was a cost in lost work time – an opportunity cost.  Goldman-Sachs actually lost $billions in market capitalization – losses actually experienced by their investors.

Today, with its 24-hour news cycle and an explosion of social media sites, we live in a world where hundreds of millions of pieces of information flow around cyberspace at the speed of light.  Much of it is accurate, but even an error rate of less than one percent means that tens or hundreds of thousands of messages are wrong to one degree or another.

If one percent of those erroneous messages cause harm, then there are between a hundred and a thousand messages damaging a company or a person every day.  There are about thirty million companies in the US, so the raw likelihood that any one company will be the subject of a damaging message in cyberspace is about one in thirty thousand, or 0.000033.  That doesn’t seem like much of a chance, but over a three-year period, that comes to one chance in 25 of being harmed, intentionally or inadvertently, by a wrong message.

The best time to think about how to handle wrong or erroneous messages is not after they are out there on the web.  As with most crises or emergencies, the best time to decide how to address the crisis or emergency is before it strikes.  Obviously, it is impossible to plan for every possibility.  It is well known that no plan will survive for long when it comes in contact with the real world.  It is, as has been variously attributed to numerous famous and successful people, the planning and not the plan that is important – the plan is only the “memorialization” of the planning.
 
There is a story about a corporate strategic planner who required that the corporation’s business-unit leaders develop significant analysis and scenario-based “what ifs” as part of their yearly planning process.  The most consistently successful business-unit leader complained that the plans were useless – yet he showed up to the planning meetings with the best data and scenario analysis and the most thoroughly considered possibilities.  When challenged about his assessment of the usefulness of the plans, he replied, “The plans are useless, but the planning is ‘preparation of the mind.’”

I think that this statement captures perfectly the importance of doing the planning – it prepares the mind.  The prepared mind is much better positioned to respond, dynamically, to the unfolding crisis or emergency.  The actual response may or may not be exactly what was planned, but it will be better because of the planning done.

While it may be a cliché, the statement, “Failing to plan is planning to fail” remains true.

 

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