The world of business is no longer immune to disinformation. What is this, what should leaders look out for, and how can they respond?
Fake news is not merely a rhetorical weapon used by politicians in smear campaigns and attempts at blame avoidance—the consequences of disinformation are expanding to the world of business and could hamper brand trust, reputation and even profit.
What is fake news and disinformation?
Fake news is news or information that incorporates misleading, embellished, or false information, despite being presented as the truth. Similarly, disinformation is information that intends to mislead or obscure truth in order to influence opinion.
While fake news has always existed, its recent mainstream prominence can be attributed to key political figures such as Donald Trump, who frequently incorporated the term into his emotive rhetoric and even claimed to have created the phrase. The term was coined Collins’ ‘Word of the Year’ in 2017 in light of this ‘ubiquitous presence.’ Considering this, we might assume that the implications of fake news and disinformation may only be applicable, and harmful, in a political context. However, there are some lesser known, detrimental implications for businesses that the C-suite should be aware of, as HotTopics has covered here.
The business impact
Public opinion is often steeped in a negativity bias that means negative reviews often resonate more than those that reflect a service or company positively.
A study from Harvard Business Review supported this, concluding that “negative reviewers are perceived as more intelligent, competent, and expert than positive reviewers, even when the content of the positive review was independently judged as being of higher quality.” Considering this, fake news and disinformation can tarnish the reputation of a business to a greater degree, in turn damaging credibility and trust.
By creating an uncertainty about brand credibility false information can cause unrest among key stakeholders, such as investors. This can lead to fluctuations and volatility in stock prices that can culminate in financial loss. Confidence has a direct correlation to profit in this way. Equally, a loss in brand trust can affect consumer behaviour in decision making processes. Fake news criticising the safety of a product, for example, means that some customers may refrain from purchasing products even when these allegations are unfounded.
An example that reflects the above conceptions is evident through Pepsi Co’s CEO, Indra Nooyi, who fell victim to a fake news campaign that accounted for a 4% fall in stock prices. Nooyi actually advised us to “mourn for those who supported the other side”, but this was circulated on social media platforms, like Twitter, as encouraging Trump supporters to “take their business elsewhere.” The hashtag “#PepsiBoycott” became viral, despite Nooyi’s congratulation of Trump in her interview.
Preventing the spread of disinformation ties in with the CIO and CISO’s responsibility to prevent threat agents and cyber attacks. The damage that fake news can cause equates to that of a cyber attack. Thus, collaboration between the CIO and CISO, and CTO would be beneficial to explore different proactive technology solutions that can prevent the spread of disinformation. Management of fake news is equally relevant to the CMO’s responsibility for controlling brand reputation, as well as the CEO’s overarching role to manage business strategy, credibility and ultimately profit. The impacts of disinformation infiltrate the responsibilities of a variety of C-suite roles, accentuating the need for a collaborative response strategy from the entire executive board.
Can anything be done to limit the negative impacts?
By identifying disinformation early and adopting a swift response, businesses can limit the chances of the information spreading virally. The less time the information is available to the consumer to view, the more minimal the impact to brand trust and reputation will likely be.
A key solution that is available, but unbeknownst to many business leaders, is reputational management tools that endeavour to help remove misleading or false content from online platforms. While some ethical concerns have been raised about the removal of unwanted opinion, companies that offer such a service work on a case by case basis and would be unable to remove information themselves. Instead, they create a case to the given media platform as to why the information is unfair, it then being at their discretion whether this is legitimate or not.
Fake news often neglects to account for context, as exemplified by the neglect to mention Nooyi’s congratulation of Trump in her interview. The problem with short, snappy hashtags is that they simplify situations in this way, and circulate virally, quickly. As well as removing unfair information, businesses should endeavour to create a crisis management plan that is grounded in transparency. Provision of timely and frequent corrections, and a fuller context- even providing links to the correct information, may help mitigate the reputational damage. Collaborating with fact-checking organisations can provide further legitimacy to these responses. Providing credible information encourages consumers to check their sources and adopt a degree of critical evaluation when reading about your business.
In a fast-paced digital era, spread of disinformation presents a serious challenge for businesses globally. With social media platforms rising in prominence, the spread of falsely curated narratives is easier than ever before and are circulated quicker. False narratives can, therefore, become viral and cause subsequent harm more imminently. Fake news and disinformation are real, and serious, threats that extend further than politics and should be taken seriously by all business leaders.
The C-suite should anticipate and prepare for the threats that these pose by implementing measures, such as reputational management tools, that can be enacted swiftly, with time being key to how wide-reaching the impact of disinformation is on reputation, trust and thus, profits.
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